Canada ‘watching closely’ as Biden pressed to fix Inflation Reduction Act ‘glitches’

Prime Minister Justin Trudeau says Canada is “watching closely” as Europe presses for changes to the U.S. Inflation Reduction Act.

President Joe Biden last week acknowledged “glitches” in the law — the very components that brought Canada’s auto sector under its protectionist umbrella.

The bill, signed into law in August, expressly made electric vehicles built in Canada and Mexico eligible for U.S. tax incentives.

Biden says it was never his intent to exclude allies, even though the original version of his taxcredit scheme reserved the most generous incentives for EVs built in the U.S. with union labour.

Trudeau says Canada’s free trade agreement with Europe gives it a competitive advantage that the U.S. doesn’t have.

But he also says the three regions can have healthy competition while working together to maintain labour and environmental standards, use responsible supply chains and promote democratic values.