A historic climate bill just passed by the U.S. Congress could have implications in entrenching Canada’s role in the shift toward clean transportation.
The legislation that passed last week established preferential tax treatment for electric vehicles assembled anywhere in North America.
That made-in-North-America approach generated some news headlines by bringing an amicable resolution to a months-long Canada-U.S. irritant.
Less noticed in the bill was a pot of money containing hundreds of millions of dollars to jump-start a new domestic industry in components for electric-vehicle batteries.
The ripple-effects could eventually be felt across the border, up into remote Canadian mining communities.
At issue is growing U.S. concern about becoming dependent on its great geopolitical rival, China, for the critical minerals powering future vehicles.
President Joe Biden invoked the U.S. Defense Production Act earlier this year allowing him to fund projects that would lessen dependence on U.S. rivals.
He’s now getting the funds to do it: $500 million US set aside in this incoming law, after another $600 million was tucked into a recent Ukraine assistance bill, atop an older multibillion-dollar loans program.
Those funds are now at Biden’s disposal to enact his stated plan to develop new suppliers for lithium, nickel, cobalt, graphite and manganese, as well as heat pumps.
An ‘opportunity’ for Canada
Could some of that money create new battery-component projects in Canada? Canadian officials are hopeful it will.
They point to a document recently posted on the White House website, from a binational panel: It explicitly mentions Canada being included as a domestic source under the U.S. Defense Production Act and says that creates potential co-operation opportunities on critical minerals.
“There is an opportunity the way [the bill is] structured — to take advantage of some of that,” Kirsten Hillman, Canada’s ambassador to Washington, told CBC News in an interview.
“This will spur domestic production [in the U.S.]. It also includes Canada as a domestic source. So we look forward to shared opportunities.”
The broader story of the new bill, which Biden will soon sign, is that it’s by far the most significant U.S. federal action ever against climate change.
It passed with relatively little media coverage last Friday, with the country’s politics distracted by the FBI search of former president Donald Trump’s home.
What’s in that big climate bill
But analysts who’ve studied the bill have predicted a major impact on carbon emissions through its more than $400 billion Cdn in tax credits and subsidies for a wide range of energy projects.
Those estimates project U.S. greenhouse-gas emissions will fall faster now to anywhere between 31 per cent and 42 per cent from 2005 levels, which would take the U.S. significantly closer to achieving its 2030 target under the Paris accord.
The so-called Inflation Reduction Act would remove one billion tons of greenhouse gasses from the atmosphere, says Princeton University’s Zero Lab — that’s equivalent to reducing two per cent of all current global emissions.
But there’s uncertainty in the projections: One reason the estimates vary so widely is it’s far from clear how quickly new energy projects will get started.
Here’s an example of that uncertainty: The much-discussed electric vehicle credit.
For almost a year, it was a festering irritant in Canada-U.S. relations. An earlier version of the bill, previously known as Build Back Better, allowed only U.S.-assembled vehicles to access certain tax credits.
What happened to that EV tax irritant?
That triggered threats of trade retaliation. Ottawa warned that the bill violated the new North American trade deal and would wipe out auto jobs and investment in Canada.
The head of Canada’s Automotive Parts Manufacturers Association, Flavio Volpe, called the friendlier language in the new, final, bill a relief for Canadian jobs: “It’s a bullet dodged,” he said.
“Probably more of a missile dodged.”
But wait. There’s an important caveat in the new, friendlier language. U.S. auto-makers are now calling the new credit practically useless, under current conditions.
For an electric car to qualify for the maximum $7,500 US in the new version of the credit, the car’s battery will increasingly need North American components: from 50 per cent of the battery in 2024, to 100 per cent in 2028.
The problem? North America doesn’t make that many battery components.
“[No vehicles] would qualify for the full credit when additional sourcing requirements go into effect. Zero,” said a letter from a U.S. auto industry lobby group.
An analysis for the non-partisan U.S. Congressional Budget Office projected that only a tiny percentage of vehicles will wind up receiving the tax credit.
In a 10-year fiscal forecast for the bill, the CBO estimated the U.S. treasury will wind up paying out just enough to deliver the full credit to slightly over 1 million vehicles over a decade.
The bottom line: Very few cars are expected to have enough North American components to qualify.
That’s where Canadian mining comes in.
A key architect of the final version of the bill, U.S. Sen. Joe Manchin, has repeatedly stated his skepticism about the original plan.
He said it made no sense to rush into the electric-vehicle age while America’s chief adversary still has a stranglehold on vital inputs.
But after Manchin visited Canada earlier this year, he opined that the two countries should be working more closely together on minerals.
This new bill appears designed to do just that, through the tax credits for North American vehicles, and the cash for critical-minerals projects.
If U.S. mining companies want access to some of that money, they can submit proposals to the American government.
Quebec mining project
One company eyeing U.S. public funds happens to have an important investment in Quebec.
Keith Phillips, president of North Carolina-headquartered Piedmont Lithium, said he’s not yet clear on what conditions the U.S. government will set and what projects it’s looking to fund.
More details about the administration of the bill will be revealed in regulations to be drafted in the coming months.
“I’m not sure anyone’s entirely clear on what the priorities are,” Phillips said in an interview.
His company is a minority investor in a Quebec lithium mine that’s now forecast to begin producing next year.
The next goal is to build a plant in Quebec for value-added processing with the majority partner, Australia’s Sayona Mining.
The project is in its infancy and there’s no site picked out yet.
Phillips said a similar plant would cost $600 million US to build in the U.S. and he said public money is a lifeline for projects that banks have little history of supporting.
“Of course it would be a priority,” he said of figuring out the potential for U.S. federal loans.
“If government assistance could be involved, it’s very helpful.”
Building a North American battery industry
The Canadian government also recently budgeted $4 billion to develop the country’s critical minerals sector.
Yet North America is starting way behind.
Canada, for instance, has a minute share of the world’s discovered deposits of lithium, cobalt and manganese.
Brian Kingston, head of the Canadian Vehicle Manufacturers’ Association, said he’s relieved by some of the changes in the U.S. bill.
But he’s still concerned — that auto-makers can’t meet the zero-emissions sales targets set by Ottawa without major improvements, in charging capacity, energy infrastructure and sales incentives.
As for a North American battery supply chain, he said: “[It] won’t emerge overnight.”
Ontario reports 72 new COVID-19 deaths as wastewater signals climb once again – CBC.ca
Ontario is reporting 72 new deaths linked to COVID-19, as wastewater signals are once again on the rise after trending downward for months, according to the latest report from Public Health Ontario.
New data released Thursday from the Ontario Ministry of Health shows the number of people in hospital with the virus climbed from 1,141 this time last week to 1,265 this week.
The number of people in intensive care with COVID-19 also rose slightly from 129 to 133. Of those, 57 patients require a ventilator to breathe, about the same as last week’s total of 58.
Test positivity on Thursday dropped slightly to 12.5 per cent, down from 13.1 per cent last Thursday.
Meanwhile, the latest report from Public Health Ontario, which is updated every Friday, shows the level of the novel coronavirus seen in Ontario’s wastewater began creeping upward around the first week of September and is estimated to have been climbing since.
That’s after a period of plateau and slow decline following a peak in early July.
Wastewater signals have increased in most parts of the province, including in the Greater Toronto Area, with the Central East and West regions seeing the steepest climbs. Central East includes Haliburton Kawartha and Pine Ridge; Peterborough; and Simcoe Muskoka, while Central West includes Brant County; Haldimand-Norfolk; Hamilton and Niagara Region.
The news comes as Ontario opened Omicron-targeted COVID-19 vaccine bookings to all adults Monday.
Last week, Chief Medical Officer of Health Dr. Kieran Moore noted vaccine uptake among Ontario’s youngest age group was lower than expected.
“We have work to do to continue our (official) message,” he told The Canadian Press at the time. “It will accelerate as we head into indoors and head into the fall as we perceive the risk of transmission will increase.”
The most recent wave of the illness to hit Ontario — which started on June 19 and peaked in early August — is being fuelled largely by Omicron variant BA. 5.
Earlier this month, members of Ontario’s since-dissolved science advisory table said they would have advised against the province’s decision to scrap COVID-19 isolation requirements had they been consulted on the move.
On Aug. 31, the province scrapped the mandatory five-day isolation period for those who test positive for COVID-19.
Canada’s economic activity creeps up, unexpectedly – Al Jazeera English
The economy grew 0.1 percent in July, compared with a forecast for a 0.1 percent decline, but inflation persists.
Canada’s economic activity unexpectedly edged up in July, data shows, while gross domestic product (GDP) in August was most likely flat, with the surprise gain seen unlikely to change much for the central bank.
The Canadian economy grew 0.1 percent in July, compared with analysts’ forecast for a 0.1 percent decline, Statistics Canada data showed on Thursday. Growth in goods-producing industries more than offset the first decrease in services-producing industries since January.
“The economy fared better than anticipated this summer, but the showing still wasn’t much to write home about,” Royce Mendes, head of macro strategy at Desjardins Group, said in a note.
The slight gain in July and likely lack of growth in August suggest third-quarter annualised GDP growth of about 1 percent, well below the Bank of Canada’s most recent forecast of 2.0 percent, analysts said.
“After a solid first half of the year, momentum appears to be slowing as multi-decade-high inflation and rapidly rising interest rates weigh on the economy,” Benjamin Reitzes, Canadian rates and macro strategist at BMO Economics, said in a note.
The Bank of Canada raised rates by 75 basis points to 3.25 percent earlier this month to fight inflation, which began to cool slightly in July, but is still running at levels not seen in nearly 40 years.
The July GDP data showed oil sands extraction drove growth, jumping 5.1 percent on higher output, with crop production also helping, up 7.2 percent mainly on volumes of wheat and other grains.
Demand for Canadian wheat has increased since Russia’s February 24 invasion of Ukraine, which Moscow calls a special military operation, helping push up export volumes.
But Canada’s retail trade sector contracted sharply in July, falling to its lowest level since December 2021, pushed down by a 7.1 percent decline in output at petrol stations, Statscan said, though that likely reversed in August.
Accommodation and food services also contracted in July, driven by less activity at bars and restaurants.
Hot inflation meant the Bank of Canada was likely to increase interest rates at its next decision in late October, but then the game may change, economists said.
“The deceleration in economic momentum is why we see the Bank of Canada only hiking rates once more in October,” Mendes said. Money markets are betting on a rise in October, with one more in December or January to bring the central bank’s policy rate to 4.00 percent.
Canada matching more donations for Pakistan flood aid, will raise cap to $5M – CTV News
The federal government will extend its matching of donations to help people dealing with catastrophic flooding in Pakistan in hopes the crisis doesn’t fall off the public radar.
“I felt that it wasn’t getting the (media) coverage that a crisis like this deserves,” International Development Minister Harjit Sajjan said in a Thursday interview.
Severe monsoon rains this summer have affected more than 33 million people, many of whom have needed emergency food, water, sanitation and health services.
More than one-third of Pakistan was underwater, including much of its agricultural land, which experts believe will spark a food shortage.
Sajjan said he saw devastating scenes on a visit to the country earlier this month.
“When I was flying over affected areas, you literally could not see the end,” he said.
“Countries that have had the least to do with contributing to climate change are actually now the most greatly affected by it.”
On Sept. 13, Prime Minister Justin Trudeau announced the federal government would match up to $3 million in donations made to the Humanitarian Coalition and its dozen member charities.
That matching campaign was due to end on Wednesday.
Sajjan said it will be extended, and the amount is now capped at $5 million.
Ottawa previously committed $30 million of its own spending.
Sajjan said the idea has been to respond to the immediate, interim and long-term needs of the country, to make sure the right amount of aid dollars reach the correct places.
“What we’re doing is funding in chunks, to make sure we’re assessing the needs in a timely basis so the resources can be there,” he said.
“Now we that we have a little bit of breathing space, we are looking at the midterm need assessment.”
Canada will likely fund climate mitigation work in the country once it has recovered, to lower the impact of future floods, Sajjan said.
He noted that Canada helped fund the early-warning system that officials told him was key to saving lives this summer.
That came after massive 2010 floods in Pakistan.
Within a year, the former Harper government pledged $71.8 million for relief efforts, including $46.8 million from donations Ottawa had matched.
When asked why Canada is only matching slightly more than one-tenth that amount, the Humanitarian Coalition said the funding is in line with cost-matching in past crises such as the 2021 earthquake in Haiti.
“To be sure, the match amount is modest, but it does fit within a recent range,” wrote spokeswoman Marg Buchanan.
She said the amounts are based on what humanitarian groups predict people will donate, “influenced by timing, waning media interest and other dominant stories.”
NDP development critic Heather McPherson argued the Liberals have been slow to put up the funding promised for other humanitarian initiatives.
She pointed to unspent funds in Ukraine and for reproductive health elsewhere.
“Their announcements are starting to be a little slim; I don’t think people are feeling very reassured,” McPherson said.
The Conservatives have called on the government to allow cost-matching for more organizations responding to disasters, including the flooding in Pakistan.
“It is easier (for Ottawa) to say that it is going to match a contribution to this big player, as opposed to saying it is going to match donations to all of the organizations that are doing this work,” Garnett Genuis told the Commons this week.
“Organizations tell me that they get calls from previous donors who say they were going to donate to what they were doing, but they actually want to donate to another organization that is getting matched.”
This report by The Canadian Press was first published Sept. 29, 2022.
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