RE:$13b to VW Industry Minister Francois-Philippe Champagne says the federal government's plans to provide approximately $13 billion in subsidies over the next decade, in order to see Volkswagen build its first overseas battery manufacturing plant in southwestern Ontario is "a very good investment."
Bloomberg News first reported the "unprecedented" contract, based on an interview with the minister.
Speaking to reporters on Parliament Hill on Thursday, Champagne confirmed that the plant—slated to be larger than 390 football fields— will and cost $7 billion to build. The minister said that once Volkswagen begins producing and selling batteries, then Canada's production support will come into play in the years ahead.
The contract Canada has inked will include both an initial capital investment of $700 million and then up to $13 billion in ongoing production subsidies, comparable to what Volkswagen would receive had it taken its business to the U.S.
Champagne said Thursday that the contract will see Canada's subsidies continue so long as the IRA is in place. This comes after what the minister has said took months of deal-making that started with a phone call and a series of meetings where he and his officials made Canada's case.
Asked what this move may mean for other clean technology companies Canada is also courting, the minister said the federal government expects to be "very selective" and "targeted" with further investments.