Mr Manchin confirmed on Sunday that he will vote against the bill
Build Back Better (Build back better), which plans to spend around $ 1,750 billion.
The bill included tax credits of up to $ 12,500 for the purchase of an electric vehicle built in a unionized plant in the United States, which would have been a disaster for the Canadian auto industry.
This program has been on the agenda of numerous meetings between federal ministers and American officials. Even Justin Trudeau has been involved in these discussions over the past few weeks.
While members of Mr. Trudeau’s cabinet breathed a sigh of relief at Joe Manchin’s announcement, they refused to say so. They fear that this respite will only be temporary.
For Mr. Manchin, the expenses provided for in the bill were too high. Also, since Toyota is a major employer in his state of West Virginia, he was not too keen on the idea of electric vehicle tax credits.
He said now is not the time to spend so heavily, especially because of inflation, government debt, geopolitical turmoil and the new wave of COVID-19.
More room for Ottawa
Canada had threatened Congress to adopt retaliatory measures and suspend certain clauses of the North American Free Trade Agreement (CUSMA) if the tax credits were passed.
In a letter to U.S. Senate leaders, Deputy Prime Minister Chrystia Freeland and Commerce Minister Mary Ng pointed out that the proposed U.S. aid amounted to a 34% tariff on electric vehicles built in Canada and violated CUSMA.
Joe Manchin’s decision will save Canada precious time ahead of the midterm elections, which could allow Republicans to regain control of the Senate and House of Representatives.