Canada is fighting for a place at the table as the world turns to electric vehicles

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This article was published 17/11/2021 (1092 days ago), so information in it may no longer be current.

OTTAWA—Canada is looking beyond the U.S. to woo European companies to join forces to build supply chains for a greener auto industry as a new protectionist push south of the border threatens the Canadian auto sector.

In the week before Prime Minister Justin Trudeau went to Washington in a fraught effort to argue the U.S. should aim to build North American-wide supply chains, and not just promote American industry, Industry Minister François-Philippe Champagne went on his own whirlwind world tour.

Champagne travelled to the U.S., Mexico, Germany, Belgium and France, where he met with major automotive and industrial manufacturers as well as government counterparts to market Canada as a pivotal player in the future of electric battery manufacturing — and key to meeting their climate action commitments.

Champagne met with business leaders in the chemical, battery and electric vehicle sectors at Evonik Industries, Bosch, Mercedes, Eberspächer, Stihl, Porsche, Siemens, Max Aicher North America, Puritos, Roquette, Total, Stellantis, Alstom and Thales, as well as with European lawmakers.

“I think we have a once-in-a-lifetime generational opportunity to go towards electrification,” Champagne said in an interview, saying he’s out to build a new electric vehicle “ecosystem” over the next 30 to 50 years.

Canada has been trying to position itself in that market for a number of years, but the effort has gained new momentum since countries signed on to tougher climate action plans that include strict zero-emissions vehicle sales mandates by 2030 or 2035.

And as U.S. President Joe Biden tries to elbow the competition aside and give a boost to unionized American manufacturers, Canada and Mexico are pushing back.

Proposed rebates that rise to $12,500 for U.S. consumers who buy EVs that are built in American plants by unionized labour breach the continental free trade pact, Canada and Mexico say, and ultimately could hurt workers in all three countries.

Ahead of Thursday’s meeting with Trudeau, Biden called the Canada-U.S. relationship the “easiest” one he has to juggle.

But Biden offered no hint that he or Democrats in Congress would back off the EV rebates or any other aspect of his “Buy American” agenda, which would also restrict non-American bidders from getting in on $1.2 trillion (U.S.) in “build back better” infrastructure investments.

And whether it was intentional or not, the message from the U.S. president couldn’t have been clearer: on the day Trudeau travelled to Washington to make the case for Canada on Capitol Hill, Biden travelled to Detroit to open a new General Motors electrical vehicle plant.

“We’re going to make sure that the jobs of the future end up here in Michigan, not halfway around the world,” Biden pledged after zooming around in a new Hummer EV.

“Here in Detroit, we’re going to set a new pace for electric vehicles,” he said. “This is not hyperbole. It’s a fact.”

But if the goal is to build an efficient, resilient industry, Champagne says Canada offers distinct advantages to the U.S. and Europe: lots of renewable energy, stable electricity supplies, critical minerals that are key to producing batteries and semiconductors, like-minded labour and environmental standards, and an already integrated auto manufacturing industry that is making the transition to EVs.

Canada and the U.S. face certain realities even if they try to go it alone, he said, noting that most of the chemical industry that makes cathodes necessary in the battery manufacturing process is based in Europe.

So Champagne’s pitch points out that the big mining companies are already based in Canada, and that Canada has the only North American plant for refining cobalt, which is used to make batteries.

In Washington, his message was simple. “If you want to meet the climate objective of Glasgow, what we need to do is to innovate more together, build more together and sell more together to the rest of the world,” he said. “So it’s in both parties’ best interest to work together, because we have made both commitments that we want to achieve.”

Champagne’s trip to Europe was to sell the package.

“Sometimes I feel like I’m a matchmaker,” he said. “I’m talking to the mining company. I’m talking to the chemical company, which will do the cathodes, I’m talking to the battery assembly manufacturers, and I’m talking also to the (car manufacturers) … because all of them have skin in the game in order to build the ecosystem.”

Flavio Volpe, head of the Automotive Parts Manufacturers’ Association, says Champagne is “hot on the trail of several battery investments” and is pitching Canada hard.

But Volpe said Canada’s ambitions could be thwarted by the immediate threat of the proposed tax rebates to favour American cars that he says would certainly lure auto manufacturers south.

The Star, he noted, has reported on the uncertain future of the 3,163-employee Chrysler plant in Brampton.

“It’s a critical issue,” Volpe said.

Canada and Mexico may hope to persuade the U.S. to expand the proposed tax rebates to include North American-made EVs, but if Biden or Congress won’t budge, Volpe says Canada must launch a formal challenge.

Champagne, however, is an optimist who believes the Americans will realize the upside in pursuing a North American strategy.

And he would not call his hustling of European manufacturers an attempt to put Canada’s EV eggs in other baskets. Rather, he says, “we want to deal among trusted partners.”

He dares to predict the effort will soon produce results, both short and long term.

“I’m bullish that some of this (investment) will decide to come to Canada,” he said, “But you have to be in their face, always, as Canada.”

Tonda MacCharles is an Ottawa-based reporter covering federal politics for the Star. Follow her on Twitter: @tondamacc