Federal and Ontario politicians have been tight-lipped about how much money the government is investing to secure a new electric vehicle (EV) battery manufacturing plant in Windsor, Ont., but a Toronto-area MP shared in a tweet that Ottawa’s contribution is $500 million.
In an announcement Wednesday for what is being called the “biggest auto investment in history,” prominent politicians – including Ontario Premier Doug Ford and the federal Ministers of Transportation and Innovation – did not did not disclose the financial incentives the government offered to secure the $4.9 billion plant in Canada.
When asked for dollar amounts, Ford said, “I can’t disclose that. It would also jeopardize some negotiations with other companies, but it’s a massive investment and its hundreds of millions of dollars.”
On Wednesday afternoon, Toronto—Danforth MP Julie Dabrusin, who also attended the announcement in Windsor, said the federal government was contributing $500 million to the project.
“Today, on behalf of Minister [Jonathan Wilkinson]I joined the ministers [Francois-Philippe Champagne] and [Omar Alghabra] in Windsor to announce $500 million in federal funding to support a historic investment by LGES and Stellantis for a total of $5 billion,” Dabrusin, who is also Parliamentary Secretary to the Minister of Natural Resources, tweeted.
By mid-morning Thursday, the deputy had deleted the tweet.
“This is Canada’s largest-ever investment in the Canadian automotive sector and will build electric vehicle (EV) batteries right here at home and create more than 2,500 jobs,” Dabrusin said in a statement. a subsequent tweet.
The project is a joint venture agreement between automaker Stellantis and South Korean battery maker LG Energy Solution, and is expected to create 2,500 new jobs in the region. It should be operational in 2024.
All levels of government have backed the project, including a City of Windsor incentive package that includes land for the massive factory, which would be the size of 112 NHL hockey rinks.
A member of Champagne’s office speaking in the background said the federal government’s final investment figure has not been finalized with the companies, so it has not been publicly confirmed.
The source said that in previous iterations of these deals, an investment of around 10% had been within range.
Competition is strong to secure an investment
On Wednesday afternoon, the Minister of Innovation, Science and Industry, François-Philippe Champagne, told CBC power and politics he also could not divulge those details as the government is in final negotiations with the two companies in the highly competitive sector.
“In terms of the amount, we’ll be a strategic partner, we’re just in the final round of negotiations with the company, but I think you’ll appreciate it, it’s a highly competitive industry, so some of those terms are commercially sensitive,” Champagne told CBC’s Vassy Kapelos.
The government was competing with a number of states in the United States and elsewhere in Europe to secure the plant, Champagne said.
Flavio Volpe, president of the Auto Parts Manufacturers Association, said government spending on autos for other projects, such as the recently announced millions for the Honda plant upgrade in Ontario, is between 10 and 20 %.
He said governments were likely scrambling to secure other investments and didn’t want to show their cards too soon.
“They have to disclose, and so I think they will in due course. But I think people should probably bear in mind that it’s the same amount as Honda’s investment last week, which was about 10% for each level of government,” Volpe said.
“Frankly, that’s what you have to do to bid for these major league franchises, and we’ve seen over the years that number go up to 50% in other places.”
Volpe said Canada wouldn’t have to go so far as to support 50% of an investment project, but 10-20% investment can pay off for spending.
“What we’ve been telling people in government for years is that a 10 or 20 percent investment by government lends a 25-year investment by business,” Volpe said. “And the refund on the tax base of personal taxes that employees pay and with corporate taxes, it’s usually a refund of about four or five years, and that’s not a bad return.”