Canadian PM Says Climate Friendly Goods Are Way of Future
Some U.S. states were willing to pay Volkswagen more than Canada was for a new Volkswagen electric vehicle factory, Canadian Prime Minister Justin Trudeau said during a speech at the Council on Foreign Relations in New York. But, Trudeau said, when Canada matched the national incentives offered by the Inflation Reduction Act, Ontario's other advantages were enough to land the major economic development win.
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Trudeau said one competitive advantage is that Canada's electricity grid is only 17% reliant on fossil fuels. "This is a place where the electricity grid is already clean. That’s what our customers want," he said companies are thinking. Canada offers child care, health care and dental care to its citizens, and has the highest proportion in the world of working-age adults with at least a two-year degree or vocational certificate, he said.
Ontario has "growing communities that keep growing because we’re welcoming immigrants from around the world at a time of labor shortage," he said. "And we have resources of lithium and crucial minerals," that because of good relationships with the populations that live around the deposits, "we’re going to be able to deliver into those supply chains in a resilient way, so you're not dependent on places around the world."
Trudeau, who spoke April 28, indirectly criticized the "foreign entity of concern" limits for critical minerals in the IRA.
"We can’t just push back or punish or single out bad actors," he said. "We can’t just say, for example, that we want our companies to restrict the amount of critical minerals they buy from China, specifically. Instead, simply commit to sourcing our critical minerals from places that ban forced labor, that have safety standards, that pay their workers a living wage, that have high environmental protections, that work in partnership with indigenous peoples."
Trudeau quoted President Joe Biden's motto of building an economy from the bottom up and the middle out, and echoed many of the administration's criticisms of globalization, even as he said Canada has been signing more trade deals and that it has privileged access to two-thirds of the world economy.
"Trade creates growth, we all know that," he said. But he also said that in the wake of the Great Recession in 2009, "the middle class was getting hollowed out and at the same time we had that promise of globalization, that the rising tide would circle the globe and lift all boats. Let’s be honest with ourselves: we weren’t being straight with ourselves about that either." Trudeau said that elites in democracies pushing for globalization "turned a blind eye to authoritarianism, worker exploitation and environmental degradation on the other side of the world."
As the Biden administration has, Trudeau specifically linked manufacturing towns' declines due to trade with stresses on democracy.
"We are at an inflection point," he said. "People are anxious about the changes that lie ahead."
While U.S. Trade Representative Katherine Tai has frequently criticized businesses for prioritizing low-cost imports over all other considerations (see 2304060043 and 2303020018), she usually doesn't explicitly say that the price of goods will be higher if they are made under higher environmental and labor standards. Trudeau acknowledged that choosing to prioritize the environment and fair treatment of workers will mean higher-priced goods.
"The lithium produced in Canada is going to be more expensive -- because we don’t use slave labor. Because we put forward environmental responsibility as something we actually expect to be abided by, because we count on working with indigenous peoples, paying fair living wages, expecting security and safety standards," he said. He asked rhetorically why people who say they value the environment buy goods that come from companies polluting in far away countries.
"The world needs to decide, and [we] are still in the process of deciding, whether or not we’re actually going to value the things we value throughout our supply chain."