Stellants Battery Factory | Ontario is putting more money on the table

Automaker Stellantis and LG Energy Solution announced with great fanfare last year the construction of a $5 billion plant in Windsor. But the two companies recently suspended work on the site and said they were implementing contingency plans because the federal government had failed to honor the funding agreement.

In a letter to Prime Minister Justin Trudeau last month, the CEOs of the two companies argued that the Canadian government had confirmed in writing five times that it would match US production incentives under the Energy Cuts Act. did not fulfill its obligations.

The federal government, for its part, has pressured Ontario to do its “fair share” in this project.

Mr. Ford said he was disappointed with the way Ottawa handled this file, because his government had not made any commitments in terms of subsidizing production. However, he said he is working with officials in Ottawa to resolve the impasse.

And on Friday, after a separate announcement in St. Catherine’s, Mr. Ford confirmed that his government was putting “more money on the table.”

“It’s about saving jobs and giving people the quality of life they deserve in southwestern Ontario,” he said.

Stellantis says the battery plant, which is intended to supply automakers in North America, will employ about 2,500 workers in Windsor. Auto parts makers expect the total impact to be about 10,000 indirect jobs.

The agreement Ontario previously signed with Stellantis committed the province to a capital contribution of $500 million, the same amount it pledged to Volkswagen to build its electric vehicle battery plant in St Thomas, south London.

Ottawa has offered Volkswagen a capital contribution of 700 million, but also up to 13 billion in “production subsidies” for the batteries it will make during the first decade, in order to offer what the German automaker would get in production tax breaks through inflation. Reduction law in the United States.

Stellantis and LG wrote to Prime Minister Trudeau around the same time the terms of the agreement with Volkswagen were announced.

Finance Minister Chrystia Freeland said federal MPs from other provinces and provincial governments who saw Ottawa pour billions into Ontario asked what their provinces would get. So Secretary Freeland believes that counties that benefit from the federal Green Manufacturing and Manufacturing Facilities Program, worth more than $120 billion, should “pay their share” in the projects.