How Canada’s auto industry is ‘on the ballot’ in today’s U.S. presidential election

NextStar Energy is continuing to hire an initial group of highly specialized employees for the Windsor operation, which is expected to eventually employ 2,500 people and spur a supply chain that could lead to thousands of additional jobs. (Submitted by Stellantis)

That includes the Advanced Manufacturing Production Credit, a tax incentive that allows manufacturers to claim up to $45 per kilowatt hour (kWh) of battery cell and module production.

Canada was forced to adopt this incentive after LG Energy Solution and Stellantis halted construction of its $5-billion battery plant in Windsor and demanded similar credits.

The government renegotiated a deal that could now see up to $15 billion in taxpayer-funded credits for the facility while securing 2,500 direct jobs.

It’s a direct example of how an anchor project for the country’s automotive industry can potentially be wooed to the United States.

Windsor battery plant keeps Canada ‘inside of the tent’

The facility recently announced it’s now producing modules, which is what holds the cells inside a battery. Experts say the timing couldn’t be better.

“It’s important for us to make the argument that Canada’s inside of the tent,” said Volpe.

He sees both Trump and Harris competing over who will better protect the U.S. from China, and says it’s a key moment for Canada to demonstrate its value in the integrated vehicle supply chain.

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Volpe said the Windsor-based battery plant is a valuable part of the argument for Canada to be included in the United States’s automotive future. This is true whether Trump or Harris are leading the way. 

“If you’re not producing before that, you’re going to have to make more extensive arguments that ‘we’re going to be up and ready before they can build an alternative.’ This one is going.”

Anderson said programs like the IRA push automakers to build vehicles that aren’t popular in the U.S. as companies announce layoffs due to underwhelming demand.

“Certainly voters in Michigan are confronted immediately with the fact that the Democratic candidate has pushed policies that would force people to buy vehicles that by and large Americans are reluctant to purchase,” said Anderson. 

The policies he’s referring to are environmental standards that limit emissions on vehicles, something Trump has promised to get rid of while in office.

“I can’t recall a time where it was that divisive and that in your face for workers in the auto industry.”

U.S. taking a shift away from free trade

Another key piece of the campaign when it comes to the automotive industry is the candidates’ attitudes toward the Canada-U.S.-Mexico Agreement (CUSMA). 

“We’ve taken a clear turn,” said Jonathon Hanson, a University of Michigan lecturer and political scientist.

Hanson said the IRA is an example of the U.S. pushing toward protectionism by subsidizing plants to build in the country and that the Biden administration has held on to tariffs that Trump’s administration initially imposed. 

There’s been a big shift away from the notion of free trade that anchored policy decisions in the 1980s and ’90s, Hanson said. 

“The overall political climate has changed toward one where I think free trade does not carry the power that it used to. There is more of a nationalistic, buy American component to policymaking on both sides of the aisle in America.”

Harris voted against CUSMA as a senator in 2020 and would lead a review of the deal in 2026 if she’s elected as president.

Brian Masse has been on the front lines of the shifting automotive industry as the long-serving NDP MP for Windsor West. 

Masse said he’s been working with other MPs to highlight Canada’s role in the automotive industry to American counterparts. 

“It’s really difficult because you have to grab their attention, and often they don’t know the deft and value of what’s taking place,” said Masse. 

“They’re more concerned obviously with politics on the southern border for example than the northern border, but their prosperity is really tied to us, too.”

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Publish date : 2024-11-04 20:12:00

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