Mar 23, 2023
Biden visiting at 'critical moment' for auto sector: Canada auto leaders
U.S. president Joe Biden is very fond of Canada: Former U.S. ambassador to Canada
Leaders in Canada’s auto sector will be listening closely to what U.S. President Joe Biden has to say about Canada-U.S. collaboration in the electric vehicle-manufacturing boom as he visits Ottawa for the first time during his presidency.
“This is a real critical moment,” Flavio Volpe, president of Automotive Parts Manufacturers’ Association (APMA) of Canada, said in a phone interview with BNNBloomberg.ca earlier this month.
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“I'm going to be listening for what the president says, what the prime minister says, about a Canada-U.S. partnership in intelligent, zero-emission transportation,” Volpe said.
'NEW ERA' FOR CANADA-U.S. RELATIONSHIP
Volpe said he’s seen a shift in the relationship between the two countries in recent years as the U.S. has leaned towards more protectionist policies that favour domestic production for goods, including automobiles.
Canada-made cars were nearly excluded from proposed U.S. tax credits for electric vehicles before last-minute changes were made to the American legislation last summer.
With about 80 per cent of Canada-made cars sold to the U.S., exclusion from the country's auto market “would have wiped us out,” Volpe said. The incident illustrated why Canadian auto leaders are on their toes when it comes to U.S. auto policy.
Volpe said leaders must be diligent in making the case for Canada’s involvement in U.S. industrial development, to avoid falling behind as the larger nation aims to cement its role in manufacturing zero-emissions vehicles.
“The relationship is at the beginning, I think, of a new era where future leaders will have to be more relentless,” he said. That calls for a “mature outlook” from Canada, he said, keeping in mind the comparative scale of both countries’ economies.
“We have to acknowledge that if we can't convince them to coordinate with us, we may have to join them, or we will lose our share.”
Drew Dilkens, mayor of auto manufacturing border city Windsor, Ont., agreed that Canada should take a realistic eye to its ability to match Biden’s spate of green incentives.
“There’s just no way Canada as a nation could offer the magnitude of subsidies that the U.S. government is offering,” he said.
“I think what we really need to hear from President Biden is that Canada is part of the solution and is a valued partner in the goal of renewing our entire auto sector.”
AUTO INDUSTRY TIES
Both Canada and the U.S. have hosted recent announcements from major global automakers aiming to bring some of their electric vehicle manufacturing to the continent.
Last week, Volkswagen officially named St. Thomas, Ont., as the site of a future EV battery facility, after announcing another automobile factory in South Carolina. Stellantis last year announced plans for a battery plant in Windsor, and others are planned across the river in Detroit.
Dilkens said the transition to EV production is bringing about a major retooling of auto plants on both sides of the Canada-U.S. border.
“It’s really is a game changer for our local economy and for our entire region,” he said. “From a Windsor-Detroit perspective, or a U.S.-Canada perspective, we really need to think about this as one economic zone, Detroit-Windsor, and forget about the border that's there. We have to maximize all of the collective potential.”
That means being on guard for protectionist rhetoric from the U.S., which Dilkens said can flare up easily.
He referenced the ‘Freedom Convoy’ blockade that shut down trade at the crucial Ambassador Bridge connecting Windsor to Detroit last winter – a political crisis that immediately prompted a U.S. lawmaker to tout the benefits of domestic production.
Dilkens said he doesn’t think the border shutdown did permanent damage to the century-old manufacturing relationship with the U.S., but he said it shows that “it doesn't take much for that narrative to flare up,” and said the strength partnership should be emphasized during the Biden visit.
Lana Payne, who represents nearly 40,000 autoworkers as national president of Unifor, said the union “will be paying keen attention to how closely aligned President Biden and Prime Minister Trudeau are in their visions for a strong and collaborative Canada-US EV value chain.”
In an emailed statement to BNNBloomberg.ca, Payne said she wants Biden and Trudeau reiterate commitments to ensuring high-paying union jobs and high labour standards across North America, including in Mexico, are baked into their EV growth plans.
“All eyes are set squarely on the auto sector, and how this transition toward a clean economy will affect jobs, skills and incomes. Governments must get this transition right if they want to inspire confidence in their plans to reach net zero,” she said.
CRITICAL MINERAL SUPPLY
Auto leaders also hope the two leaders will discuss Canada’s supply of the critical minerals necessary to produce electric vehicle batteries.
Provinces and territories, including Newfoundland and Labrador, Yukon and Ontario all pointed to critical mineral supplies when asked by BNNBloomberg.ca about their ideal discussion priorities for the Biden visit.
A spokesperson for Ontario Premier Doug Ford highlighted critical minerals and electric vehicle manufacturing in a statement that called for pushback against Biden’s “Buy American” stance.
“Whether it’s manufacturing the vehicles of the future or mining the critical minerals that will fuel the global electric vehicle supply chain, one thing has always been clear – North America is stronger when it is united. Buy American should be Buy North American,” Caitlin Clark said in an email.
Volpe said Canada should have a solid plan for control and use of its mineral supply, and he expects it will be a topic of conversation during Biden’s visit.
Both leaders referenced trade and the fight against climate change in official statements ahead of Biden’s scheduled visit on March 23 and 24.
Prime Minister Justin Trudeau’s office made specific reference to critical minerals and building stronger economies for a net-zero world, while the White House’s statement noted supply chain resilience and the clean energy transition as priorities for the visit.