TORONTO, ON (December 14, 2021) – The Trillium Automobile Dealers Association has written to US Senate Leaders urging them to reject discriminatory tax credits for Canadian-assembled electric vehicles (EVs).
In a letter to Senate Majority Leader Chuck Schumer and Senate Minority Leader Mitch McConnell, the TADA says the proposed EV tax credits currently before the Senate will destroy the successful North American auto supply chain Canada and America have built since signing the Auto Pact in 1965.
The Build Back Better Act contains tax credits up to $12,500 for electric vehicles assembled in the United States. The Act has passed in the House of Representatives and is now before the Senate.
“The TADA believes EV tax credits should not discriminate against Canadian-assembled vehicles. Our integrated North American supply chain creates jobs on both sides of the border and should be protected,” said Frank Notte, Director of Government Relations. “We are hopeful the US Senate will reject these discriminatory EV tax credits and force amendments exempting Canadian-assembled vehicles.”
In a letter to Senate Leaders, Deputy Prime Minister Chrystia Freeland and International Trade Minister Mary Ng threatened retaliatory tariffs. They estimate the proposed tax credit for US assembled EVs would amount to a 34 percent tax on Canadian-assembled vehicles.
“Ontario new car dealers don’t want a trade war resulting in higher prices for new vehicles. We hope Senators will reject these discriminatory tax credits and help focus Congress and the President on the main goal – putting EVs on the road to reduce emissions. An EV assembled in Canada is just as good for the environment as an EV assembled in America,” said Notte.
Freeland and Ng’s letter note Canadian-assembled vehicles contain approximately 50 per cent U.S. content and Canada imports over $22 billion worth of automotive parts from the U.S. annually. These parts come from suppliers in numerous states, including Michigan, Ohio, West Virginia, Virginia, Indiana, Kentucky, Illinois and New York, among others.
The TADA’s letter cites recent examples of both Democratic and Republican administrations exempting Canada from harmful trade policies. In 2002, President Bush exempted Canadian-made steel from a 30 percent tariff. And in 2010, President Obama exempted Canada from “Buy American” provisions.
The TADA’s letter also states the important role Ontario’s mining sector can play as North America transitions to EVs. The letter says, “Ontario has deposits of minerals and metals required for EV batteries and parts including cobalt, graphite, lithium and nickel. By not discriminating against Canadian made products, we can secure our North American EV supply chain and decrease our dependence on less dependable trading partners.”
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