RE:Trudeau is making an old Soviet USSR Mistake! ≡
Toronto Star logo
Prime Minister Justin Trudeau and Premier Doug Ford during a news conference to announce the construction of an electric vehicle battery production plant by Volkswagen Group’s battery company PowerCo SE in St. Thomas on April 21, 2023.
caption icon
STAR EXCLUSIVE
Justin Trudeau and Doug Ford reach tentative deal worth billions more to save Stellantis EV battery plant
By Robert Benzie Queen's Park Bureau Chief Tonda MacCharles Ottawa Bureau Chief
Wed., May 31, 2023
Prime Minister Justin Trudeau and Premier Doug Ford have reached a tentative deal with Stellantis to save its Windsor battery factory that could be worth more than $13 billion in subsidies, the Star has learned.
That means the French parent company of Chrysler, Jeep and Fiat might receive even more Canadian tax dollars than Germany’s Volkswagen is getting to build a similar electric-vehicle “gigafactory” in St. Thomas, near London.
But the dramatic move should also secure the future of Stellantis’s Brampton auto assembly plant and comes as the company’s board of directors met Wednesday in Paris.
ARTICLE CONTINUED BELOW
Sources in Ottawa and at Queen’s Park, speaking confidentially in order to discuss the negotiations, said Ford assured his federal counterparts Tuesday night that the Ontario government would “step up” to ensure Stellantis doesn’t relocate the EV facilities to the U.S.
Insiders say the premier’s assurance — and his personal rapport with Deputy Prime Minister Chrystia Freeland — cleared the intergovernmental logjam so an arrangement could be reached in time for the Stellantis board meeting.
After the Star published this story Wednesday afternoon, top federal and provincial officials insisted details are still being hammered out and “it’s premature” because there’s “a bit more work to do.”
Stellantis halted construction
The auto giant halted construction May 15 of its massive Windsor project, a $5-billion joint venture with Korea-based LG Energy Solution, which is to employ 2,500 workers when it opens next year.
That was three days after the Star revealed the company could be lured stateside by U.S. President Joe Biden’s generous subsidies in the Inflation Reduction Act.
ARTICLE CONTINUED BELOW
While Industry Minister Franois-Philippe Champagne said he spoke with Ford and Freeland on Wednesday morning, he was coy when pressed about the negotiations.
“I would say everyone should take a deep breath. Things are going well,” Champagne told reporters in Ottawa.
“We will get to a deal. I’m very confident. We’re getting closer to the end of the negotiation. That’s why I say discussions are progressing.”
When asked about the pending agreement, Stellantis Canada spokesperson LouAnn Gosselin said: “We are not commenting at this time.”
Ontario to pay “a big chunk”
One senior federal government official confided that Ontario had moved significantly and was now prepared to contribute billions to the final offer.
Officials at Queen’s Park declined to comment, but Ford, who will be in the Windsor area Thursday on unrelated business, has previously confirmed he would increase the $500-million subsidy the province had already given Stellantis.
Insiders said the premier was on a high-stakes conference call with top federal and provincial officials on Tuesday night where the timing and the amounts of funding from each level of government were discussed in detail.
As part of a significant concession, Ontario will pay “a big chunk” of the production incentives to Stellantis. It could be between one-quarter and one-third with Ottawa footing the rest of the tab.
That’s in contrast to the province’s $500-million share of subsidies to Volkswagen, which will employ 3,000 workers when its $7-billion plant opens in 2027. That provincial money, like the initial Stellantis payout, was to build infrastructure such as roads and sewers.
VW could receive between $8 billion and $13.2 billion in federal cash depending upon the number of batteries it makes.
Even though Stellantis will make 400,000 EV batteries annually in Windsor — compared to the German automaker’s one million per year in St. Thomas — the French firm, which also owns Alfa Romeo, Citron, Maserati and Peugeot, could receive even greater subsidies.
That’s because it will begin manufacturing battery modules three years earlier, which triggers the subsidies sooner.
Champagne noted the federal government’s 2022 fall economic statement said “that we would level the playing field with the battery manufacturers” so that Canada would be competitive with the U.S. for companies to locate their EV factories here.
But Ottawa has also been clear, he added, that “we will be targeted, we will be selective, and we will be very specific (about) who were engaging with. We engaged with Volkswagen. We’re engaging with Stellantis, and … at the end, there will be a few number of companies with whom we can do that.”
Asked whether Stellantis would get a subsidy as great or greater than VW even though it’s slated to be a smaller plant, Champagne would only say: “that’s all part of the negotiation. As you would appreciate I’m not going to necessarily go into the details right now, but it’s good for workers to know, for people in southwestern Ontario, for people in Windsor and Brampton, to say those are normal negotiations.”
Freeland has said “regional fairness” is an important consideration in Ottawa’s insistence that Ontario kick in more money to the Stellantis initiative.
That’s because, an official explained, while Ontario is the heart of Canada’s auto sector, the federal government intends to make more major clean energy investments over the next number of years across Canada.
The federal Liberals want to make clear that provinces that stand to benefit the most from those investments are also expected to kick in money to get the projects going.
Ford-Freeland friendship helped get deal
Flavio Volpe, head of the Canadian Automotive Parts Manufacturers’ Association, said the apparent deal is a reminder that “a lot of what goes into the Ottawa-Queen’s Park relationship is the personal relationship built on the trust between the deputy prime minister and the premier.”
“That was forged during the pandemic and it’s no surprise that when it matters, the feds rely on Chrystia Freeland to work this out,” said Volpe.
“But it’s a tough spot for someone who also holds the job of the finance minister to work out this commercial deal in the same vein as the child-care and health-care accords (with the province),” he said.
“My instinct is only Freeland can credibly do a handshake deal with Doug Ford, the details of which can be worked out after.”
Biden’s legislation, which pays automakers between $2,700 and $4,500 (U.S.) for each EV battery manufactured in the U.S., has jolted the landscape, forcing Canadians to match the subsidies or risk factories moving south.
Read more about: doug ford, ottawa
SHARE:
REPORT AN ERROR
JOURNALISTIC STANDARDS
ABOUT
THE STAR
MORE POLITICS
Stellantis says it awaits ‘official answer’ from Ottawa following report of tentative deal to save EV plant
Ford government cancels ‘clueless’ plan to allow housing on farmland after backlash
Martin Regg Cohn: David Johnston isn’t the only casualty of opposition attacks
Justin Trudeau confidante Dominic LeBlanc to study if there’s a path back for Han Dong
David Johnston defies House of Commons, refuses to quit probe into foreign interference
Canada closing in on deal to get Stellantis battery plant back on track: Industry Minister Franois-Philippe Champagne
About
Contact Us
Feedback
© Copyright Toronto Star Newspapers Ltd. 1996 - 2023
Privacy Policy
Terms and Conditions