Stellantis has what it needs to make decision on Windsor battery plant: Champagne
The federal government has delivered a written offer to Stellantis and LG Energy Solutions, Industry Minister Francois-Philippe Champagne said Tuesday.
Champagne said that should be all the companies need to make a decision on the fate of their planned electric vehicle battery plant in Windsor, Ont.
The minister said the negotiations are progressing, and "I think we're getting to the end of it."
He would not say if this was a final offer, but he did say he expects an answer from Stellantis soon.
"You know, they have what they need, and therefore I think that should be very short now," he said.
A spokeswoman for Stellantis confirmed the offer had been received but would say no more beyond the fact it is "currently under financial and legal review."
Champagne would give no details on the size of the offer except to point out his government's repeated promise to respond as needed to the massive subsidies created in the United States under the Inflation Reduction Act.
"There should be no surprise," he said. "I mean, we said that in the fall economic statement, we would be levelling the playing field with the United States when it comes to the IRA."
He added that these are "generational opportunities."
"These large manufacturing facilities, most of them will be decided within the next six to twelve months in North America. So therefore, either you win now, or you're out of that industry for 50 years or until there's a new technology."
Canada and Ontario's deal with Volkswagen to build a battery plant in St. Thomas, Ont., is worth $1.2 billion in capital and up to $13 billion in production subsidies through to 2033.
The Stellantis plant is half the size, but is set to begin making batteries three years earlier, so it could get even more in subsidies.
Prime Minister Justin Trudeau characterized the offer as a prudent one in order to ensure that Canada is part of the transition to a net-zero economy.
"It's an offer that is both respectful of the taxpayer dollars that are going into it, but mostly it's one that is reasonable to create great jobs for the future, for generations to come," he said before the Liberals' weekly cabinet meeting in Ottawa.
All of this is because of the Inflation Reduction Act in the United States, which last August put forward enormous production tax credits for advanced manufacturing including EV batteries.
The tax credits are so generous they will cut the cost of producing a battery in half, and companies have made clear to Canada that it must match the IRA or be left out.
Those includes Stellantis and LG Energy Solutions, which announced in March 2022 that they would be building a 45 gigawatt electric vehicle battery plant in Windsor, aiming for the first batteries to come off the line in early 2024.
Canada and Ontario each agreed to provide $500 million toward the $5 billion capital price tag. But as a result of the IRA, the two companies asked to renegotiate their deal and Canada agreed.
The discussions went slowly.
In April, the companies wrote to Trudeau warning that they would have to make tough decisions if his government did not make good on its promise to come back to the table with more cash.
In mid-May, they stopped construction on the plant, ratcheting up the pressure on the federal government to get a new deal. Champagne and Finance Minister Chrystia Freeland both said they needed Ontario to contribute more, and that the companies needed to be "reasonable."
Ontario did not contribute to the production subsidies for Volkswagen, but it is spending several hundred million dollars on infrastructure including to roads and utilities around the planned factory site.
Champagne and Freeland both said Ontario would have to contribute to the subsidies for Stellantis, noting that the federal government has 13 provinces and territories to support and the benefits of the plants would largely be felt in Ontario.
Premier Doug Ford initially balked at that. But he later agreed to contribute additional dollars.
Ontario's economic development minister said Tuesday the federal government's offer contains a commitment from the province to pay up to one-third of the cost, and he hopes to hear good news from Stellantis and LG "very, very shortly."
"I hope it happens very quickly," Vic Fedeli said Tuesday.
"The people of Windsor are looking for answers and we want to have those answers as soon as possible."
Fedeli wouldn't say how much more money Ontario could be on the hook for with the promise to foot one-third of the new bill, but he said it will be worthwhile to spur an end-to-end EV production chain in the province.
"When we think of these plants, there's still many, many more plants to come -- all of the companies that need to feed the two battery plants that we have here," he said.
"Each of those not only are billion-dollar plants, they all add thousands of employees. So we're growing all of Ontario, and this is the investment that we're making to be the leader."
The deal with Volkswagen was tailored to mimic the IRA, so much so that if the U.S. reduces or eliminates its subsidies earlier than 2033 as planned, Canada's subsidies will be reduced by the same amount.
The IRA offer includes a full tax credit of $35 per kilowatt hour until 2030, and then smaller amounts until the credits disappear entirely in 2033.
This report by The Canadian Press was first published June 6, 2023.
-- With files from Allison Jones in Toronto.
IN DEPTH
Jagmeet Singh pulls NDP out of deal with Trudeau Liberals, takes aim at Poilievre Conservatives
NDP Leader Jagmeet Singh has pulled his party out of the supply-and-confidence agreement that had been helping keep Prime Minister Justin Trudeau's minority Liberals in power.
'Not the result we wanted': Trudeau responds after surprise Conservative byelection win in Liberal stronghold
Conservative candidate Don Stewart winning the closely-watched Toronto-St. Paul's federal byelection, and delivering a stunning upset to Justin Trudeau's candidate Leslie Church in the long-time Liberal riding, has sent political shockwaves through both parties.
'We will go with the majority': Liberals slammed by opposition over proposal to delay next election
The federal Liberal government learned Friday it might have to retreat on a proposal within its electoral reform legislation to delay the next vote by one week, after all opposition parties came out to say they can't support it.
Budget 2024 prioritizes housing while taxing highest earners, deficit projected at $39.8B
In an effort to level the playing field for young people, in the 2024 federal budget, the government is targeting Canada's highest earners with new taxes in order to help offset billions in new spending to enhance the country's housing supply and social supports.
'One of the greatest': Former prime minister Brian Mulroney commemorated at state funeral
Prominent Canadians, political leaders, and family members remembered former prime minister and Progressive Conservative titan Brian Mulroney as an ambitious and compassionate nation-builder at his state funeral on Saturday.
Opinion
opinion Don Martin: Gusher of Liberal spending won't put out the fire in this dumpster
A Hail Mary rehash of the greatest hits from the Trudeau government’s three-week travelling pony-show, the 2024 federal budget takes aim at reversing the party’s popularity plunge in the under-40 set, writes political columnist Don Martin. But will it work before the next election?
opinion Don Martin: The doctor Trudeau dumped has a prescription for better health care
Political columnist Don Martin sat down with former federal health minister Jane Philpott, who's on a crusade to help fix Canada's broken health care system, and who declined to take any shots at the prime minister who dumped her from caucus.
opinion Don Martin: Trudeau's seeking shelter from the housing storm he helped create
While Justin Trudeau's recent housing announcements are generally drawing praise from experts, political columnist Don Martin argues there shouldn’t be any standing ovations for a prime minister who helped caused the problem in the first place.
opinion Don Martin: Poilievre has the field to himself as he races across the country to big crowds
It came to pass on Thursday evening that the confidentially predictable failure of the Official Opposition non-confidence motion went down with 204 Liberal, BQ and NDP nays to 116 Conservative yeas. But forcing Canada into a federal election campaign was never the point.
opinion Don Martin: How a beer break may have doomed the carbon tax hike
When the Liberal government chopped a planned beer excise tax hike to two per cent from 4.5 per cent and froze future increases until after the next election, says political columnist Don Martin, it almost guaranteed a similar carbon tax move in the offing.
CTVNews.ca ÐÇ¿Õ´«Ã½
BREAKING
Three men were injured after a man armed with a knife entered a Montreal-area Islamic cultural centre Friday afternoon.
A 15-year-old boy who was the subject of an emergency alert in New Brunswick has been arrested.
Police have arrested an 18-year-old woman who allegedly stole a Porche and then ran over its owner in an incident that was captured on video.
Since she was a young girl growing up in Vancouver, Ginny Lam says her mom Yat Hei Law made it very clear she favoured her son William, because he was her male heir.
The parents of a teenager who died after allegedly consuming the poisonous products of a Mississauga man are now suing him, as well as several doctors involved in her care.
11-year-old boy dies after subway surfing in NYC
An 11-year-old boy died Monday after subway surfing in New York City. He's the fourth person to die from subway surfing in the city this year.
The search for a missing six-year-old boy in Shamattawa is continuing Friday as RCMP hope recent tips can help lead to a happy conclusion.
Recall issued for 38,000 GM vehicles in Canada over software safety glitch
Transport Canada has issued a recall for 38,000 General Motors (GM) vehicles for safety risks related to a software glitch, the agency reported in a notice on Wednesday.
Top Hezbollah commander among 12 killed in Israeli strike on Beirut
Israel killed a top Hezbollah commander and other senior figures in the Lebanese movement in an airstrike on Beirut on Friday, vowing to press on with a new military campaign until it is able to secure the area around the Lebanese border.
Local Spotlight
Getting a photograph of a rainbow? Common. Getting a photo of a lightning strike? Rare. Getting a photo of both at the same time? Extremely rare, but it happened to a Manitoba photographer this week.
They say a dog is a man’s best friend. In the case of Darren Cropper, from Bonfield, Ont., his three-year-old Siberian husky and golden retriever mix named Bear literally saved his life.
A growing group of brides and wedding photographers from across the province say they have been taken for tens of thousands of dollars by a Barrie, Ont. wedding photographer.
Paleontologists from the Royal B.C. Museum have uncovered "a trove of extraordinary fossils" high in the mountains of northern B.C., the museum announced Thursday.
The search for a missing ancient 28-year-old chocolate donkey ended with a tragic discovery Wednesday.
The Royal Canadian Mounted Police is celebrating an important milestone in the organization's history: 50 years since the first women joined the force.
It's been a whirlwind of joyful events for a northern Ontario couple who just welcomed a baby into their family and won the $70 million Lotto Max jackpot last month.
A Good Samaritan in New Brunswick has replaced a man's stolen bottle cart so he can continue to collect cans and bottles in his Moncton neighbourhood.
David Krumholtz, known for roles like Bernard the Elf in The Santa Clause and physicist Isidor Rabi in Oppenheimer, has spent the latter part of his summer filming horror flick Altar in Winnipeg. He says Winnipeg is the most movie-savvy town he's ever been in.