Trudeau warns companies not to expect same handout as VW — via drivingdotca autonews
Earlier this month in Washington, Trudeau’s finance minister, Chrystia Freeland, warned that democracies cannot get into a “race to the bottom” on corporate subsidies or they’ll erode their tax bases, harming their ability to pay for social programs.Article content
Despite the money his government rolled out for Volkswagen — and the roughly $80 billion in long-term investment tax credits it promised in its latest budget for a variety of industries — Trudeau argued he’s still guarding against a subsidy war. Volkswagen, he said, almost certainly left money on the table when it chose Canada over certain U.S. states for its first EV battery plant in North America.
“I don’t know what other jurisdictions offered, but I’m fairly confident that they were willing to go further than we were able to go” with financial incentives, he said. Canada’s clean electricity grid, its labour force, and its public health care system were also factors that helped persuade Volkswagen to build the plant in St. Thomas, he said.
The prime minister said Canada can’t afford to fully match the U.S. subsidies available under last year’s Inflation Reduction Act. “If we were to try and match dollar-for-dollar the equivalent of the IRA, we’d lose our triple-A credit rating, quite rightly,” he said. “So we do have to be thoughtful and strategic about this.”
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