Ontario Premier Doug Ford is responding to federal calls for the province to help fund commitments Canada made to automaker Stellantis by saying he is “disappointed” with how Ottawa has handled the issue.
Both levels of government are working hard to ensure Stellantis doesn’t pull out of its promise to jointly build a $5-billion electric vehicle battery plant with LG Energy Solution in Windsor, Ont., but it’s up to Ottawa to follow through on its promises, Ford said Wednesday.
“Hopefully, the federal government will step up and I’m always willing to work collaboratively with them, just like we have with all the other auto deals,” Ford said in the halls of the legislature.
“They have been a really good partner, actually. I don’t know what happened this time.”
Stellantis wrote last month to the federal government, saying Ottawa had confirmed in writing five times that it would match production incentives under the United States’ Inflation Reduction Act, but has not delivered on those commitments. Construction at the site has now stopped.
The company finalized the “special contribution agreement” with the federal government in February 2023, nearly a year after the plant was first announced.
Stellantis’ letter was dated one day before the amount of subsidies offered to Volkswagen for a battery plant in St. Thomas, Ont., was made public. Canada offered Volkswagen a $700-million capital contribution and up to $13 billion in production subsidies for the batteries it makes over the first decade, to match what the company would get in production tax credits under the Inflation Reduction Act.
Federal ministers are now saying they want Ontario to pay its “fair share” in order to make the Stellantis deal happen, but Ford said he doesn’t know what that means.
“It’s disappointing it’s come to this right now, but we believe in working with the federal government,” Ford said. “We can’t afford to lose Stellantis. But my question is, what is our fair share?”
Finance Minister and Deputy Prime Minister Chrystia Freeland said Wednesday that, from her perspective, Canada’s green industrial strategy, which adds up to more than $120 billion in federal investments over more than a decade, “needs to deliver for everyone in the country from coast to coast to coast.”
She said MPs from other provinces and other provincial governments are asking her what their provinces are going to get as they watch Ottawa pour billions into auto deals in Ontario.
“I take that concern very seriously,” she said. “And from my perspective, the way to ensure that the federal government’s industrial policy delivers for the whole country is to ensure that provinces that are getting the direct benefit pay their share, and that is what’s happening.”
Freeland would not explain why the federal government did not ask Ontario to pay part of the production subsidies for the Volkswagen deal, finalized in March.
Federal government officials have pointed reporters to the “hundreds of millions” Ford said the Ontario government was spending in infrastructure support for Volkswagen’s St. Thomas plant, including road and highway improvements and power grid expansions.
Ford said the province signed its own deal with Stellantis for a $500-million capital contribution — the same amount it committed to Volkswagen — and Ontario hasn’t been involved in the federal government’s production incentive discussions.
“I’m just disappointed right now, the fact that we weren’t involved, they never talked to us,” Ford said.
“But our goal is to protect the people and the jobs and we’ll do whatever it takes to protect those jobs.”
Stellantis has said the battery facility to supply plants in North America will employ about 2,500 people. Auto parts makers expect the total impact to be about 10,000 indirect jobs.
“Stellantis and LG Energy Solution simply ask that the Canadian government keep its commitments in relation to what was agreed last February and which led us to continue construction work of the gigafactory in Windsor,” the companies wrote in a statement Wednesday.
“This uncertainty is unfair to our Canadian employees, as well as towards Stellantis and LGES investments.”
Canada is not the only government Stellantis is in tense negotiations with at the moment.
The company, which includes the long-standing British Vauxhall brand of vehicles, told the United Kingdom this week the Brexit deal the U.K. has with Europe over electric vehicle exports will make it too expensive to export the electric vans it is to start manufacturing at its U.K. site this year.
It said the U.K. must negotiate a new deal with Europe or it risks losing electric vehicle investments.
This report by The Canadian Press was first published May 17, 2023.
