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Canada sides with Cali over emissions

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OTTAWA—Environment Minister Catherine McKenna signed a vehicle-emissions agreement with California yesterday that the state's governor and auto industry experts see as a signal that Canada is going to side with California in a U.S. dispute over emissions standards.

The agreement is aimed at harmonizing efforts to cut pollution from cars and pickup trucks, including emissions standards, accelerating the adoption of electric vehicles and collaborating to make fuels that are used burned more cleanly.

The agreement comes as U.S. President Donald Trump is preparing to roll back emissions standards set by former president Barack Obama.

Trump's plan would take away California's long-standing legal authority to go its own route on vehicle emissions.

California is pushing back hard against those changes, including in court, and Gov. Gavin Newsom indicated yesterday California has no intention of backing away from that fight.

The Obama standards would have required vehicles to become more fuel-efficient every year between 2017 and 2025, so that by the end of the period, cars and trucks would burn 50 per cent less gasoline and emit 50 percent less carbon dioxide.

Trump intends to freeze the standards at 2020 levels.

Canada has long harmonized its vehicle emissions standards with the United States, both an economic and environmental necessity born of the deep integration of the U.S. and Canadian auto industries.

When Trump said last year he intended to roll back the targets, Canada launched its own review of the emissions plan.

McKenna indicated Wednesday Canada isn't likely to announce its plans for vehicle emissions standards until after the White House makes its final decision on the matter.

She said the ideal result would be for the U.S. to continue with one national standard but acknowledged right now it looks as though there will be two-one national standard and one followed by California and at least 13 other states that have joined California's fight.

If that happens, Canada is leaning towards California.

“If there are two choices in the U.S. our focus is about how do we get meaningful cuts to climate pollution,” McKenna said.

Newsom and California Air Resources Board chair Mary Nichols perceive the agreement with Canada that way. The two joined a news conference call with McKenna yesterday, in which Newsom said the agreement “reinforces our efforts and reinforces our commitment and resolve” to push on with the Obama standards.

Nichols indicated the agreement will even help in the battle with Washington.

“The auto industry is looking for leadership here and having Canada signalling that it is in general alignment with us on these issues can only be helpful in this broader debate,” she said.

But Canadian auto-industry officials warn McKenna not to be so hasty. They say picking a side in this fight will undermine the work of negotiating the auto chapter in the new North American free-trade agreement.

Huw Williams, director of public affairs for the Canadian Automobile Dealers Association, said the agreement with California is “premature.”

“Canada should focus on one standard in the U.S. as opposed to looking like the 51st state,” he said.

Mark Nantais, president of the Canadian Vehicle Manufacturers Association, said the biggest environmental and economic benefit to Canada will be to align with a single national standard in the United States.

He said Canada should be pressuring California and the U.S. federal government to resume their talks to keep a single standard rather than throwing its eggs into California's basket.

“We have to ask ourselves why would want to support a bifurcated market or standard for vehicle emissions," he said. "We spent just two years negotiating the new NAFTA, which is really designed to reinforce the integrated economies.”

Nantais, whose association represents the Canadian arms of Fiat Chrysler, Ford and General Motors, said if the U.S. splits its standard and Canada picks a side, it could raise prices of vehicles here or limit available car models as companies simply refuse to produce cars that meet Canada's and California's demands.

McKenna and Newsom both stressed that together, the economies of Canada, California and the other 13 states represent at least half the auto market in North America, giving weight to their joint efforts.

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