Canada’s federal government and Ontario said they would together provide up to C$15 billion ($11.3 billion) in performance incentives for a Stellantis-LG Energy Solution, electric-vehicle battery plant being built in Windsor.
“Today’s announcement will protect and create thousands of good-paying jobs for workers, including unionized jobs, as we establish an end-to-end electric vehicle supply chain to strengthen the clean economy,” the federal and provincial governments said in a joint news statement.
The agreement between our governments also extends to the project by Volkswagen Group and its subsidiary PowerCo SE to establish Volkswagen’s first overseas electric vehicle battery cell manufacturing plant in St. Thomas, Ontario. Volkswagen could receive up to $13 billion in performance incentives.
In its 2023 Budget, the federal government unveiled transformative investments in jobs and growth as part of a $120 billion clean economy plan.
Canada’s automotive sector supports over 500,000 workers, including nearly 100,000 auto plant workers in Ontario. The sector contributes $16 billion annually to Canada’s gross domestic product and is one of the country’s largest export industries.
The final agreement with Stellantis includes a number of conditions:
The governments will only provide a performance incentive for batteries that Stellantis produces and sells, in line with the conditions in the agreement for the Volkswagen battery cell manufacturing plant;
Stellantis will uphold its existing commitments in Canada and Ontario, including a production mandate at its plant in Brampton, Ontario;
The company will invest more in Canada and Ontario, including for the establishment of an research and development facility in Windsor, Ontario;
The operating expenses provided will only be available for as long as the U.S. Inflation Reduction Act incentives remain in effect;
The federal government has agreed to provide Stellantis with a performance incentive on a per unit production basis of up to US$45 per kWh (US$35 per kWh for battery cells and US$10 per kWh for battery modules). Canada’s performance incentive is subject to an overall cap of C$15 billion, of which one-third is to be paid by the Ontario government.