Canada closing in on deal to get Stellantis battery plant back on track: Champagne
A deal to save a $5-billion electric vehicle battery plant in Windsor is inching closer, Industry Minister Francois-Philippe Champagne said Wednesday.
"I would say everyone should take a deep breath, things are going well, the negotiations are progressing," Champagne said following a Liberal caucus meeting in Ottawa.
"We're getting closer to the end of the negotiation."
The federal government, Ontario, Stellantis and LG Energy Solution have been in heavy negotiations for a few weeks after the companies paused construction on their planned factory in a dispute over federal subsidies.
The negotiations have been stuck between what Canada thinks is fair and affordable and what the company believes it is due. It has threatened to move the plant out of Windsor if it doesn't get what it says it was promised by the federal government in a "special contribution agreement" in February.
Champagne said the company has to be "reasonable."
The companies announced the plan for the battery facility in March 2022 with a $1-billion capital contribution from the federal and provincial governments.
But the companies went back for more government support after the United States announced new production tax credits for EV battery makers as part of the Inflation Reduction Agreement.
That legislation compelled Canada to sign an agreement with Volkswagen to subsidize batteries made at a planned new plant in St. Thomas, Ont., that could be worth up to $13 billion over a decade.
Champagne said he made a similar offer to Stellantis, but negotiations continue about how the formula would apply to the Stellantis plant, which is half the size of Volkswagen's but will start producing batteries three years earlier.
The subsidies are directly proportionate to the tax credits on offer under the IRA, which start at a tax credit of $35 per kilowatt hour from now until 2030, when they begin to be phased out. By 2033, they will be eliminated.
The Volkswagen deal includes a clause that ensures Canada's subsidies keep pace with the U.S. tax credits, and if the IRA is reduced or eliminated earlier than planned, Canada's subsidies will go down an equal amount.
The Stellantis plant is have an annual production capacity of 45 gigawatt hours, which could make enough batteries for more than 400,000 vehicles a year, with the first production happening as early as 2024.
Volkswagen's plant, with twice the production capacity, could produce enough for nearly a million vehicles annually, with initial production starting in 2027.
Neither company's plant is likely to make the maximum number of batteries in its first year.
In Canada, the production timelines would make Stellantis eligible for the full equivalent subsidy for nearly seven years, while Volkswagen would be getting it for just three or four.
Both plants are mainly intended to supply batteries to the companies' own EVs. For Volkswagen, those won't be made in Canada, as it has no auto plants in the country and no intention to build any.
Stellantis is retooling its auto manufacturing sites in both Windsor and Brampton, Ont., to be able to make electric vehicles. Champagne said stronger commitments, particularly for the Brampton plant, are part of the ongoing talks with the company right now.
"That's all part of the negotiation," he said.
Canada also insisted that the Ontario government put additional funds on the table, which Premier Doug Ford initially balked at but later committed to doing.
Champagne said he spoke with Ontario Premier Doug Ford both Tuesday and Wednesday.
“For me, this is an ongoing discussion," Champagne said. "We talk every day. And we're going to get to a deal. I'm very confident on that."
This report by The Canadian Press was first published May 31, 2023.
CTVNews.ca Top Stories
Quebec nurse had to clean up after husband's death in Montreal hospital
On a night she should have been mourning, a nurse from Quebec's Laurentians region says she was forced to clean up her husband after he died at a hospital in Montreal.
Northern Ont. lawyer who abandoned clients in child protection cases disbarred
A North Bay, Ont., lawyer who abandoned 15 clients – many of them child protection cases – has lost his licence to practise law.
Bank of Canada officials split on when to start cutting interest rates
Members of the Bank of Canada's governing council were split on how long the central bank should wait before it starts cutting interest rates when they met earlier this month.
Maple Leafs fall to Bruins in Game 3, trail series 2-1
Brad Marchand scored twice, including the winner in the third period, and added an assist as the Boston Bruins downed the Toronto Maple Leafs 4-2 to take a 2-1 lead in their first-round playoff series Wednesday
Cuban government apologizes to Montreal-area family after delivering wrong body
Cuba's foreign affairs minister has apologized to a Montreal-area family after they were sent the wrong body following the death of a loved one.
'It was instant karma': Viral video captures failed theft attempt in Nanaimo, B.C.
Mounties in Nanaimo, B.C., say two late-night revellers are lucky their allegedly drunken antics weren't reported to police after security cameras captured the men trying to steal a heavy sign from a downtown business.
What is changing about Canada's capital gains tax and how does it impact me?
The federal government's proposed change to capital gains taxation is expected to increase taxes on investments and mainly affect wealthy Canadians and businesses. Here's what you need to know about the move.
New Indigenous loan guarantee program a 'really big deal,' Freeland says at Toronto conference
Canada's Deputy Prime Minister Chrystia Freeland was among the 1,700 delegates attending the two-day First Nations Major Projects Coalition (FNMPC) conference that concluded Tuesday in Toronto.
'Life was not fair to him': Daughter of N.B. man exonerated of murder remembers him as a kind soul
The daughter of a New Brunswick man recently exonerated from murder, is remembering her father as somebody who, despite a wrongful conviction, never became bitter or angry.