The head of a major Canada-U.S. Business group says she sees the spark in a deal allowing Canadian companies to qualify for President Joe Biden’s controversial electric vehicle tax credit.

“You know, I saw some leeway in the language and rhetoric that we saw coming from the president as well as key members of Congress,” said Scotty Greenwood, a former US diplomat in Canada who is now CEO. of Canadian-American Business. Advice.

Greenwood told CBC The House in an interview aired over the weekend, Biden was not ready to negotiate with Prime Minister Justin Trudeau at the North American Leaders’ Summit in Washington while his $ 2 trillion Build Back Better bill was still on hold. under consideration in Congress.

But she said she saw an opening in the President’s tongue during a brief press conference with Trudeau on Thursday in the Oval Office – enough openness to suggest a compromise can be reached.

“So whether it’s an exemption for North American vehicles made by unions or something like that, that allows the president to continue to reach out to his base – unionized workers – or to a other technical detail, I think there is a way to get through it, ”she said.

US President Joe Biden delivers remarks after visiting General Motors’ Factory ZERO electric vehicle assembly plant in Detroit, Michigan, United States, November 17, 2021. (Jonathan Ernst / Reuters)

Biden’s bill, which passed the House of Representatives on Friday and now heads to the Senate, would give buyers of electric vehicles made in the United States by unionized workers a tax credit of up to $ 12,500.

Canada is fiercely opposed to the plan, insisting it undermines the country’s auto industry and violates the new North American free trade agreement.

Some members of the Trudeau cabinet have already warned of possible retaliation.

International Trade Minister Mary Ng was in Washington for the summit. In a separate interview with The House, she deflected questions about how Canada might retaliate and whether the Trudeau government would impose counter-tariffs – as it did when former President Donald Trump imposed tariffs on manufactured steel and aluminum in Canada in 2018.

“I think it’s premature at this particular point,” Ng said, adding that Biden and other Democrats are absolutely clear on Canada’s position that this tax credit needs to be changed. “And we will not stop until we find a solution acceptable to Canada.”

No Washington movement yet

Trudeau, Ng and other ministers at the summit repeatedly stressed the deep integration of the North American auto industry. They also pointed out that Canada is the main source of many raw materials needed to make batteries, such as cobalt and nickel.

But in the face of all these arguments about the importance of protecting these supply chains, US officials seem unresponsive.

“I will just say that there has been a very in-depth discussion on supply chains, integration, cooperation,” Assistant Secretary of State Brian Nichols said Friday during a briefing with reporters from Canada. , the United States and Mexico.

“The President and Prime Minister have discussed Canada’s concerns and we look forward to working with them on a full range of issues. Obviously, we have differences of opinion on these issues, but we have an excellent relationship. . and we’re going to solve any problems that we have, and we’re going to use the treaty and trade frameworks that we have to do that. “

“He can’t back down”

There is also a political reality to be recognized south of the border.

Polls suggest more Americans now disapprove of Biden’s performance. Automaker states such as Michigan and Ohio are key pivotal states as Americans head to midterm elections for the House of Representatives and Senate next year.

A protectionist president, promising and offering more jobs in the manufacturing sector, would be less of a drag on Democrats running for re-election in 2022.

“He cannot renege on his commitments to unionized workers,” said Greenwood The House. “That’s why I think there might be a compromise that has to do with North America [EVs] as long as you keep your faith in unions. “

Canada’s biggest concern is how to deal with the growing protectionist movement south of the border. This move is now embraced by both Democrats and Republicans, although Biden’s preference for buying incentives like tax credits falls far short of the punitive tariffs used repeatedly by Trump during his tenure.

Greenwood acknowledges that protectionism is on the rise around the world, but rejects the idea that the policies of the Biden and Trump administrations are the same.

Former US President Donald Trump used a national security exemption to impose tariffs on Canadian exporters. (Dustin Chambers / Reuters)

“I don’t think President Biden would use a national security exemption… to try to leverage a negotiation,” she said. “He’s more respectful. He’s more fact-based.”

Facts are stubborn things. But they can also be used to meet a goal.

Right now, the reality is that Canada considers the electric vehicle tax credit to be harmful to the auto industry in this country. Canada sees it as a threat to the thousands of jobs on both sides of the border as Canada and the United States work on a common goal of reducing greenhouse gas emissions.

Ng said Canada will continue to push for an exemption at the White House and Capitol Hill, and at every other opportunity that she and other cabinet ministers have with their American counterparts.

“I think we have left Washington where it is very clear how important this issue is to Canadian workers and to Canadian manufacturers.”