‘The right thing to do’: Area politicians fire back after report suggests St. Thomas battery plant not such a great investment

Politicians fire back over EV battery plant report A new report projects a higher cost to the Federal Government for the VW battery plant in St. Thomas. CTV's Bryan Bicknell with the story.

Politicians in the region were firing back Thursday after a report from the federal parliamentary budget officer led some to suggest that taxpayer investment in the future Volkswagen EV battery cell plant in St. Thomas may not pay off.

St. Thomas Mayor Joe Preston remains unfazed by the revelations and the backlash that followed.

“I take the positive side and say yes is the answer, this is the right thing to do for our region of southern Ontario, and certainly for the city of St. Thomas,” said Preston.

On Wednesday, parliamentary budget officer Yves Giroux released a report saying it would cost at least $16.3 billion to build the plant.

That’s $2.8 billion more than the federal government originally announced.

The overage is largely because of the tax adjustment related to the U.S. Inflation Reduction Act, with Canada competing directly with the U.S. to land the battery cell gigafactory.

The plant will eventually employ 3,000 people after it opens in 2027, with some saying it will position this region at the forefront of the next wave of the automotive industry.

While attending an event in Sarnia, Ont., Labour Minister Monte McNaughton told CTV News that manufacturing is coming back strong in the region.

“When the Talbotville Ford plant closed, I remember growing up in Glencoe playing minor hockey, half of my hockey team’s parents worked at that plant,” he recalled. “It was a devastating day when those jobs were lost, thousands of jobs. So the manufacturing comeback is on here in southwestern Ontario, and I’m excited about what Volkswagen’s going to offer.”

But in the grand scheme of things, the extra $2.8 billion over ten years many not be significant.

Fanshawe College politics professor Matt Farrell said politicians are less concerned about the accounting liability than they are the political liability.

"Do you want to be the one that lets those jobs go somewhere else?” he questioned. “And this is especially salient in communities in southwestern Ontario where they’ve seen those jobs go south, they’ve seen them go overseas. Do you want to be that politician that’s seen as not standing up for jobs in those communities?”

In the meantime, Preston pointed out that construction is already well underway on the massive, 13-million square-foot facility. He said stopping it now could potentially put tens of thousands of spinoff industry jobs at risk.

“The jobs being created across Ontario from a mining and Ring of Fire point of view supplying this plant. So it was well suggested at that time from Volkswagen and the province of Ontario, maybe 30-thousand more jobs,” said Preston.

Preston added that he believes the return on investment will be rapid.