MNI: Canada Minister Memo: Tell GM Car Future Going Electric

Canada's industry minister was advised before meeting General Motors executives in late January to stress the country's auto market will shift to electric vehicles and the government will protect its "sovereign interests" after the company cut local production, a memo obtained by MNI shows.

"While Canada remains committed to an integrated North American automotive market, measures must be taken to protect Canada's automotive industry from existing vulnerability. Canada will prioritize Canada's sovereign interests, shaped by a vision for the future that recognizes that the vehicle of the future is both electrified and connected," according to the report's key messages section. 

The four-page staff memo obtained Monday by MNI through a freedom of information request laid out discussion points for Melanie Joly's meeting with GM North American President Duncan Aldred. Much of the document related to U.S. tariffs on Canadian autos and steel and GM's investment plans for Canada. (See: MNI: Canada Needs Bigger Push Than Commodity Boom-Ex-Ministers)

"We remain committed to working together to secure your long-term operations in Canada," the memo said. 

Joly spokesperson Gabrielle Landry told MNI Wednesday via email "the new auto strategy charts a path toward reduced reliance on the U.S. market and gas-powered vehicles, while better aligning Canada with the global automotive industry and opening the door to new international partnerships that bring benefits to Canada." GM press officers didn't respond to a request for comment. 

POTENTIAL CHINA JOINT VENTURES

After the meeting Joly told CBC she demanded GM repay the government for money given to boost Canadian production following two rounds of cutbacks. Canada in January also said it will allow 49,000 Chinese electric vehicles annually into the market at the most-favored-nation tariff rate of 6.1%.

"Within five years, it is expected that more than 50% of these vehicles will have an import price of less than (CAD)35,000," the memo said. New cars cost an average CAD65,000 according to AutoTrader. Canada's EVs sales shifted around over the last few years as government incentives changed. 

"By granting access to a fixed number of Chinese EVs, we are establishing clear limits to minimize impact on existing market dynamics, while providing Canadians with more low cost EV options, as well as opening the door to new investment in the Canadian automotive sector," the memo said. 

Officials also noted GM has some EV production, noting the success of "the three-way light-vehicle partnership between GM, SAIC Motor Corp., and Liuzhou Wuling Automobile Industry Co."

Joly's spokesperson also told MNI that "over the longer term, the government is seeking to leverage market access to encourage deeper investment in Canada, including the possibility of joint ventures with Canadian companies that would support domestic manufacturing and supply chains. Any potential Chinese JV will be assessed in a way that protects Canada’s interests." 

U.S. President Donald Trump has threatened 100% tariffs on Canada if Prime Minister Mark Carney seeks free trade with China, and ahead of USMCA talks other administration officials have complained about Canada's ties with the world's second-largest economy.

Memo excerpt: