Canadian automakers breathed a sight of relief Thursday after U.S. lawmakers scrapped part of a massive incentive package for electric vehicles that would have excluded those assembled in Canada from a proposed consumer tax credit.
The $7,500 US credit for “clean vehicles” — which include battery-electric, plug-in hybrid and hydrogen fuel cell — is part of $369 billion in proposed new spending on energy- and climate-related initiatives included in the Inflation Reduction Act.
U.S. senators Chuck Schumer and Joe Manchin, both Democrats, reached a deal late Wednesday to include the credit and a series of other tax and investment measures aimed at expanding the clean energy sector and spurring adoption of EVs in the bill, which hopes to revive an economy struggling to dig out from under 9.1 per cent inflation.
The deal was a surprise, coming less than two weeks after Manchin, a centrist Democrat whose vote is needed to get the bill through the evenly divided Senate, had said he would not support an extensive climate bill President Joe Biden was hoping to pass until inflation was under control.
The Senate is expected to vote on the bill next week before it goes to the Democratic-controlled House of Representatives.
U.S. Democratic senators Chuck Schumer, left, and Joe Manchin have agreed to do away with a restriction that would have limited a proposed electric vehicle tax credit to American-made electric vehicles. If it passes, it will now apply to cars made anywhere in North America. (J. Scott Applewhite/The Associated Press)
Canada lobbied hard to be included
Flavio Volpe, CEO of Canada’s Automotive Parts Manufacturers’ Association, said the importance of the proposed amendment could not be overstated and, coupled with the hundreds of millions of dollars the Canadian government is funnelling into EV and battery manufacturing, should give the EV sector the boost it needs.
“This couldn’t be a bigger vote of confidence in the North American auto sector,” he told CBC’s Katie Simpson. “All of these new investments in Canada now have an incredible runway to have this rebirth of Canada’s auto sector.”
Around 5.6 per cent of new car sales in the U.S. are electric and about 12.6 per cent are electric and plug-in hybrid. In Canada, it’s 5.8 and 7.7, respectively.
Volpe said the “Buy American” restriction in the original Build Back Better bill posed a worse threat to the Canadian auto industry than any of the trade restrictions the previous administration of Donald Trump had imposed.
Although Canadian consumers won’t directly benefit from the tax credit, the hope is that incentivizing EV consumers in the U.S. will spur manufacturers to make new investments in Canada and rev up related industries, such as critical mineral mining, to help meet growing demand on both sides of the border.
BREAKING<br><br>Trade War averted on the crazy proposed ???????? EV Tax Credit that illegally excluded ???????? made vehicles.<br><br>New Democrat Senate package with <a href=”https://twitter.com/Sen_JoeManchin?ref_src=twsrc%5Etfw”>@Sen_JoeManchin</a> support NOW says credit applies to vehicles “manufactured in North America”.<br><br>A lot of us spent A LOT of time on this. ???? <a href=”https://t.co/GMVUKFpf1i”>https://t.co/GMVUKFpf1i</a> <a href=”https://t.co/ze6h2jgr0w”>pic.twitter.com/ze6h2jgr0w</a>
It means “job security for anyone who exports cars and parts to the U.S.” from Canada, Volpe said, “which is 85 per cent of our exports.”
Volpe was part of the team of Canadian industry representatives, government officials and diplomats who lobbied Manchin and other U.S. lawmakers relentlessly to get Washington to include Canadian-assembled cars in the credit and to recognize how seamless the cross-border auto parts and manufacturing supply and production chains are.
“We’re one integrated market, especially in automotive. There is absolutely no border here,” he said.
Good news for workers, says minister
Canada’s ambassador to the U.S., Kirsten Hillman, was one of the people meeting with senators and lobbying on behalf of Ottawa over the last nine months. She was relieved to see that work seems to have paid off.
“The bottom line is the Canadian auto sector, the Canadian battery sector, our critical minerals sector are being treated on a level playing field with our American neighbours, so we’re thrilled about that,” she said.
Kirsten Hillman, Canada’s ambassador the U.S., said the EV tax credit has the potential to benefit not just Canadian auto manufacturers but also companies that produce batteries and mine critical minerals. (CBC)
International Trade Minister Mary Ng said the development is good news for workers and manufacturers.
“As the bill moves through Congress, we will continue to advocate for the importance of maintaining these integrated supply chains and growing a greener and more prosperous future for North America,” she said.
The proposed legislation includes a separate $4,500 credit for used EVs and a $10 billion investment tax credit to build clean-technology manufacturing facilities.
To be eligible for the consumer tax credits, vehicles must be priced at $55,000 or lower for new cars and $80,000 or less for pickup trucks, SUVs and vans.
They must also contain batteries that have a certain percentage of material sourced from countries that the U.S. considers free trade partners. That could be good news for Canadian mining companies supplying those critical minerals.
To qualify for the credit, U.S. consumers have to earn no more than $150,000 if they’re filing for the tax credit individually or $300,000 for joint filers. For used cars, the eligibility limit is $75,000 and $150,000, respectively.
WATCH | International Trade Minister Mary Ng relieved at EV news:
Canadian politicians welcome U.S. electric vehicle tax credit
1 day ago
Duration 6:13
Canadian politicians are celebrating after U.S. lawmakers backed a ‘buy North American’ amendment to proposed legislation which would give Americans a tax credit for purchasing electric vehicles.
Will require ramp-up in battery production
AnalystSam Fiorani of Pennsylvania-based AutoForecast Solutions stressed that most EV incentives to date have benefited the manufacturers, not the buyers, and that’s not likely to change since such incentives are meant to inspire companies to develop new products.
“Until a couple of years ago, [GM] sold their Chevy Bolts with a $7,500 incentive. After the incentive went away, the price of the Volt dropped by $7,000 almost immediately,” he said. “So all that incentive was going to General Motors, not to the end user.
“We can expect that to continue.“
Nevertheless, the price cap should help get more entry-level EVs into more hands eventually, Fiorani said, although it will take time to get more cheaper models on the market.
“It’s going to take a long time to build up the infrastructure to provide batteries, batteries being the most expensive part of the whole vehicle,” he said.
Refined tellurium, shown at the Rio Tinto Kennecott refinery in Magna, Utah, is used in the production of solar panels. It is one of the so-called critical minerals that are in high demand as countries around the world invest in green technologies and cleaner energy sources. (Rick Bowmer/The Associated Press)
Shortages of minerals and semiconductors, the critical materials needed to produce batteries and other EV components, have driven up prices and incentivized manufacturers to direct resources to higher-end vehicles, says Scotiabank analyst Rebekah Young.
Canada could eventually help meet some of the demand for critical minerals such as cobalt and lithium but will need to step up its extraction capacity, she said.
“To meet global EV demand, we’re going to see some of these mineral requirements increase by sevenfold at least,” she said. “We have the reserves, not necessarily the production capacity.”
She said Canada and the U.S. are both still catching up to other parts of the world.
“In China, I think EVs are within 10 per cent price parity of an [internal combustion] engine, but they’re much smaller vehicles and they’ve got many more players and many more models,” Young said. “We’re still biased toward big vehicles, [with] lots of material inputs.”
Geothermal mud pots near the shore of the Salton Sea in Niland, Calif., where Controlled Thermal Resources is mining for lithium, a critical component of rechargeable batteries. (Marcio Jose Sanchez/The Associated Press)
Unionized-plant requirement dropped
Under the amendment, the credit will no longer be limited to manufacturers with sales of 200,000 EVs or fewer, which will benefit large companies such as Tesla, GM and Toyota, which have sold more than that.
The vehicles won’t have to be assembled in unionized plants as originally proposed, a provision unions on both sides of the border were hoping would survive.
“Protecting and enhancing workers’ rights throughout this transition is not just an option for governments and lawmakers; it is essential to ensuring a just transition,” said Lana Payne, secretary-treasurer of Unifor, which represents Canadian autoworkers, in a news release.
Workers install a battery onto the chassis of a Ford Focus electric vehicle at the Michigan Assembly Plant in Wayne, Mich. The original bill would have required vehicles to come from unionized plants in order to qualify for the credits. (Rebecca Cook/Reuters)
Unifor praised the lifting of the U.S. assembly requirement and said it was the result of aggressive lobbying by unions, industry and government.
“The reality is that auto manufacturing in Canada and the United States is deeply integrated, and our production volumes are tied to the much larger sales market in the U.S.,” said Unifor Auto Council chairperson John D’Agnolo.
Unifor welcomes a revised US Senate proposal that aims to open up tax credits to Canadian-built BEVs. This news “lifts a cloud of uncertainty hanging over Canadian factories,” says <a href=”https://twitter.com/Lanampayne?ref_src=twsrc%5Etfw”>@Lanampayne</a> <a href=”https://twitter.com/hashtag/canlab?src=hash&ref_src=twsrc%5Etfw”>#canlab</a><a href=”https://t.co/EWPYfvPHQ1″>https://t.co/EWPYfvPHQ1</a> <a href=”https://t.co/81zc7Rw9wR”>pic.twitter.com/81zc7Rw9wR</a>
Louise Blais, who also participated in the negotiations to include Canada in the credit during her time as Canada’s consul-general in Atlanta, Ga., called it a “huge win” and said it wasn’t a given the lobbying efforts would succeed.
But she cautioned that Canadian manufacturers and governments have to take a look at some of the other incentives that will flow to energy and climate-related projects and industries if the bill passes, which could lure some manufacturers south.
The proposed legislation includes $20 billion in loans to build new clean vehicle manufacturing facilities and $30 billion for additional production tax credits to accelerate U.S. manufacturing of solar panels, wind turbines, batteries and critical minerals processing as well as $2 billion in cash grants to retool existing auto manufacturing facilities.
“There’s a lot of provisions in there that will really further incentivize manufacturers to manufacture clean technology like solar panels and others in the United States,” said Blais, who is now a senior adviser with the Business Council of Canada and divides her time between Atlanta and Quebec.
“So, we really need to take a close look at this in Canada and make sure that we do not lose our competitiveness in some of these sectors as a result of this.”
WATCH | Canadian manufacturers welcome news of EV tax credit:
U.S. electric vehicle tax credit brings relief to Canadian auto industry
2 hours ago
Duration 2:06
A new U.S. climate deal has brought relief to Canada’s auto sector, with the agreement changing the terms of an electric vehicle tax credit to include vehicles built in Canada.
MONTREAL – The employers association at the Port of Montreal has issued the dockworkers’ union a “final, comprehensive offer,” threatening to lock out workers at 9 p.m. Sunday if a deal isn’t reached.
The Maritime Employers Association says its new offer includes a three per cent salary increase per year for four years and a 3.5 per cent increase for the two subsequent years. It says the offer would bring the total average compensation package of a longshore worker at the Port of Montreal to more than $200,000 per year at the end of the contract.
“The MEA agrees to this significant compensation increase in view of the availability required from its employees,” it wrote Thursday evening in a news release.
The association added that it is asking longshore workers to provide at least one hour’s notice when they will be absent from a shift — instead of one minute — to help reduce management issues “which have a major effect on daily operations.”
Syndicat des débardeurs du port de Montréal, which represents nearly 1,200 longshore workers, launched a partial unlimited strike on Oct. 31, which has paralyzed two terminals that represent 40 per cent of the port’s total container handling capacity.
A complete strike on overtime, affecting the whole port, began on Oct. 10.
The union has said it will accept the same increases that were granted to its counterparts in Halifax or Vancouver — 20 per cent over four years. It is also concerned with scheduling and work-life balance. Workers have been without a collective agreement since Dec. 31, 2023.
Only essential services and activities unrelated to longshoring will continue at the port after 9 p.m. Sunday in the event of a lockout, the employer said.
The ongoing dispute has had major impacts at Canada’s second-biggest port, which moves some $400 million in goods every day.
On Thursday, Montreal port authority CEO Julie Gascon reiterated her call for federal intervention to end the dispute, which has left all container handling capacity at international terminals at “a standstill.”
“I believe that the best agreements are negotiated at the table,” she said in a news release. “But let’s face it, there are no negotiations, and the government must act by offering both sides a path to true industrial peace.”
Federal Labour Minister Steven MacKinnon issued a statement Thursday, prior to the lockout notice, in which he criticized the slow pace of talks at the ports in Montreal and British Columbia, where more than 700 unionized port workers have been locked out since Nov. 4.
“Both sets of talks are progressing at an insufficient pace, indicating a concerning absence of urgency from the parties involved,” he wrote on the X social media platform.
This report by The Canadian Press was first published Nov. 8, 2024.
VANCOUVER – Employers and the union representing supervisors embroiled in a labour dispute that triggered a lockout at British Columbia‘s ports will attempt to reach a deal when talks restart this weekend.
A spokesman from the office of federal Labour Minister Steven MacKinnon has confirmed the minister spoke with leaders at both the BC Maritime Employers Association and International Longshore and Warehouse Union Local 514, but did not invoke any section of the Canadian Labour Code that would force them back to talks.
A statement from the ministry says MacKinnon instead “asked them to return to the negotiation table,” and talks are now scheduled to start on Saturday with the help of federal mediators.
A meeting notice obtained by The Canadian Press shows talks beginning in Vancouver at 5 p.m. and extendable into Sunday and Monday, if necessary.
The lockout at B.C. ports by employers began on Monday after what their association describes as “strike activity” from the union. The result was a paralysis of container cargo traffic at terminals across Canada’s west coast.
In the meantime, the union says it has filed a complaint against the employers for allegedly bargaining in bad faith, a charge that employers call a “meritless claim.”
The two sides have been without a deal since March 2023, and the employers say its final offer presented last week in the last round of talks remains on the table.
The proposed agreement includes a 19.2 per cent wage increase over a four-year term along with an average lump sum payment of $21,000 per qualified worker.
The union has said one of its key concerns is the advent of port automation in cargo operations, and workers want assurances on staffing levels regardless of what technology is being used at the port.
The disruption is happening while two container terminals are shut down in Montreal in a separate labour dispute.
It leaves container cargo traffic disrupted at Canada’s two biggest ports, Vancouver and Montreal, both operating as major Canadian trade gateways on the Pacific and Atlantic oceans.
This is one of several work disruptions at the Port of Vancouver, where a 13-day strike stopped cargo last year, while labour strife in the rail and grain-handling sectors led to further disruptions earlier this year.
This report by The Canadian Press was first published Nov. 8, 2024.
VANCOUVER – Judicial recounts in British Columbia‘s provincial election should wrap up today, confirming whether Premier David Eby’s New Democrats hang onto their one-seat majority almost three weeks after the vote.
Most attention will be on the closest race of Surrey-Guildford, where the NDP were ahead by a mere 27 votes, a margin narrow enough to trigger a hand recount of more than 19,000 ballots that’s being overseen by a B.C. Supreme Court judge.
Elections BC spokesman Andrew Watson says the recounts are on track to conclude today, but certification won’t happen until next week following an appeal period.
While recounts aren’t uncommon in B.C. elections, result changes because of them are rare, with only one race overturned in the province in at least the past 20 years.
That was when Independent Vicki Huntington went from trailing by two votes in Delta South to winning by 32 in a 2009 judicial recount.
Recounts can be requested after the initial count in an election for a variety of reasons, while judicial recounts are usually triggered after the so-called “final count” when the margin is less than 1/500th of the number of votes cast.
There have already been two full hand recounts this election, in Surrey City Centre and Juan de Fuca-Malahat, and both only resulted in a few votes changing sides.
A partial recount of votes that went through one tabulator in Kelowna Centre saw the margin change by four votes, while a full judicial recount is currently underway in the same riding, narrowly won by the B.C. Conservatives.
The number of votes changing hands in recounts has generally shrunk in B.C. in recent years.
Judicial recounts in West Vancouver-Sea to Sky in 2020 and Coquitlam-Maillardville in 2013 saw margins change by 19 and six votes respectively.
In 2005, there were a record eight recounts after the initial tally, changing margins by an average of 62 votes, while one judicial recount changed the margin in Vancouver-Burrard by seven.
The Election Act says the deadline to appeal results after judicial recounts must be filed with the court within two days after they are declared, but Watson says that due to Remembrance Day on Monday, that period ends at 4 p.m. Tuesday.
When an appeal is filed, it must be heard no later than 10 days after the registrar receives the notice of appeal.
A partial recount is also taking place in Prince George-Mackenzie to tally votes from an uncounted ballot box that contained about 861 votes.
The Prince George recount won’t change the outcome because the B.C. Conservative candidate there won by more than 5,000 votes.
If neither Surrey-Guildford nor Kelowna Centre change hands, the NDP will have 47 seats and the Conservatives 44, while the Greens have two seats in the 93-riding legislature.
This report by The Canadian Press was first published Nov. 8, 2024.
