OTTAWA — U.S. Ambassador David Cohen said Ottawa had a “hissy fit” over electric vehicle tax credits, a dispute that landed on his desk when he first arrived in Canada.
Biden’s envoy told tales about the now-resolved dispute during a talk Wednesday at the Wilson Center in Washington.
In December 2021, Deputy Prime Minister Chrystia Freeland was threatening to unleash retaliatory tariffs. The dispute deescalated after the introduction of Canada-friendly provisions into the Inflation Reduction Act.
But Cohen said Wednesday that there was no threat because Canada’s electric vehicle industry was just coming into existence.
The ambassador said his response to Canadians went something like this: “I’m struggling to understand how the inapplicability of a tax credit to a segment of your industry that currently produces no vehicles that are eligible to it is an existential threat to the entire Canadian economy.”
Freeland’s office responded to Cohen’s comment Wednesday night by pointing POLITICO to a quote from a speech she delivered in Washington last month. “You need us as much as we need you,” she said at the time of the EV dispute.
The ambassador’s comments come a day after Freeland traveled to Washington for the inaugural meeting of the Canada-U.S. Energy Transformation Task Force.
Cohen used his time on the Wilson Center stage to obliterate “some noise in Canada about alleged protectionist policies.”
Cohen said the real competition is against China and Russia and authoritarian regimes. The U.S. is also competing against Europe “to some extent,” he said. “I will argue any day of the week that that requires a close, collaborative relationship with Canada as a like-minded country.”
An international race to secure major clean energy investments has forced Washington and Ottawa to work closely to decarbonize and protect each country’s economies.
Tranches of U.S. government funding have been opened up to Canadian firms in order to get projects built. Under the Defense Protection Act, $250 million was made available by the Biden administration for American and Canadian companies that mine and process critical minerals. Awards will be announced “this spring or summer,” Cohen said.
International Trade Minister Mary Ng met with U.S. Trade Representative Katherine Tai on Tuesday in Washington and “expanded Buy America provisions” came up, according to a Canadian readout.
Cohen defended the Biden administration’s trade agenda, saying “any intonation that these programs and legislation are protectionist could not be further from the truth.”
Canadian concerns about protectionism are a common refrain, Cohen said. He referenced trade data, pointing out that of Canada’s top 25 exports to the U.S., only two — lumber and aluminum — are covered by Buy American federal procurement provisions.