Industry minister defends Canada's $13B Volkswagen battery plant subsidy plans
Industry Minister Francois-Philippe Champagne says the federal government's plans to provide approximately $13 billion in subsidies over the next decade, in order to see Volkswagen build its first overseas battery manufacturing plant in southwestern Ontario is "a very good investment."
Bloomberg News first reported the "unprecedented" contract, based on an interview with the minister.
Speaking to reporters on Parliament Hill on Thursday, Champagne confirmed that the plant—slated to be larger than 390 football fields— will and cost $7 billion to build. The minister said that once Volkswagen begins producing and selling batteries, then Canada's production support will come into play in the years ahead.
The contract Canada has inked will include both an initial capital investment of $700 million and then up to $13 billion in ongoing production subsidies, comparable to what Volkswagen would receive had it taken its business to the U.S.
"The payback is five years. That's a very good investment. Talk to any banker, he would say 'if you get your money in five years, for a plan that's going to be there for 100 years, that's a pretty good deal for Canadians,'" Champagne said, going on to call it a "generational opportunity" and a "game changer."
In mid-March, the German automaker said its subsidiary PowerCo had plans to establish an electric vehicle (EV) battery manufacturing "gigafactory" facility in St. Thomas, Ont., south of London.
With production planned to start in 2027, the EV battery plant is expected to employ thousands of workers once fully operational, though Champagne pointed Thursday to the trickle-down job creation expected in southern Ontario as a result of the European car manufacturer setting up shop.
"Canada and Ontario are perfect partners for scaling up our battery business and green economy jobs, as we share the same values of sustainability, responsibility and cooperation," said chairman of PowerCo's supervisory board, in the March statement detailing the deal.
At the time and until now, the federal and provincial governments have remained tight-lipped about how much governments agreed to spend to secure the plant. Ontario has yet to release how much it plans to contribute towards this plant, or what form provincial funding may take. Any provincial contributions would be on top of what Ottawa has put on the table.
Touting the deal as an indication of Canada's growing green economy and ability to attract international investment, the move comes amid pressure for this country to remain competitive against the United States' Inflation Reduction Act (IRA) which is offering billions in clean energy and net-zero industries south of the border.
Champagne said Thursday that the contract will see Canada's subsidies continue so long as the IRA is in place. This comes after what the minister has said took months of deal-making that started with a phone call and a series of meetings where he and his officials made Canada's case.
Asked what this move may mean for other clean technology companies Canada is also courting, the minister said the federal government expects to be "very selective" and "targeted" with further investments.
Speaking to CTV News Channel's Power Play host Vassy Kapelos the day plans for the plant were revealed, the minister said that Canada didn't win "on the money" and pushed other factors in the deal-making, but declined to offer details despite repeated questions, suggesting the information was “commercially sensitive.”
Reacting to the reported developments on Thursday, NDP MP and auto critic Brian Masse said as more details emerge, the federal government needs to ensure workers and communities benefit in the long-run, not just Volkswagen's CEO and shareholders.
"To fight the climate crisis and secure Canada’s economic future, Canada needs to be a leader in producing electric vehicles with good-paying union jobs as a requirement for any contracts," said Masse in a statement.
When the initial pledge was made public, Conservative Leader Pierre Poilievre questioned "how much of Canadians' money" would be going to a "foreign corporation."
A further announcement about the plan is scheduled to take place in St. Thomas on Friday, with Prime Minister Justin Trudeau, Ontario Premier Doug Ford, and other top officials expected to be in attendance.
Flavio Volpe, president of the Automotive Parts Manufacturers' Association, told CTV News he's anxious to see the figures announced, but this plant is shaping up to be the largest electric battery manufacturing facility in North America.
Asked what he thought of the amount of money the federal government appears ready to spend, Volpe said this scale of investment in the auto industry has been seen before, pointing to the 2010 $13 billion bailout of General Motors and Chrysler.
"That was to shore up companies that would have disappeared and probably taken the rest of the industry with them," Volpe said, noting that now equivalent funding is going towards something that he estimates would result in between $100 billion and $200 billion worth of economic activity over the next 10 years.
He called it more than a return on investment. "This is like acquiring a big-league franchise," he said.
With files from CTV News' Kevin Gallagher, CTV News London, and CTV News Toronto
IN DEPTH
Trudeau, key election players to testify at foreign interference hearings. What you need to know
The public hearings portion of the federal inquiry into foreign interference in Canadian elections and democratic institutions are picking back up this week. Here's what you need to know.
'One of the greatest': Former prime minister Brian Mulroney commemorated at state funeral
Prominent Canadians, political leaders, and family members remembered former prime minister and Progressive Conservative titan Brian Mulroney as an ambitious and compassionate nation-builder at his state funeral on Saturday.
Who is supporting, opposing new online harms bill?
Now that Prime Minister Justin Trudeau's sweeping online harms legislation is before Parliament, allowing key stakeholders, major platforms, and Canadians with direct personal experience with abuse to dig in and see what's being proposed, reaction is streaming in. CTVNews.ca has rounded up reaction, and here's how Bill C-63 is going over.
As Poilievre sides with Smith on trans restrictions, former Conservative candidate says he's 'playing with fire'
Siding with Alberta Premier Danielle Smith on her proposed restrictions on transgender youth, Conservative Leader Pierre Poilievre confirmed Wednesday that he is against trans and non-binary minors using puberty blockers.
TREND LINE What Nanos' tracking tells us about Canadians' mood, party preference heading into 2024
Heading into a new year, Canadians aren't feeling overly optimistic about the direction the country is heading, with the number of voters indicating negative views about the federal government's performance at the highest in a decade, national tracking from Nanos Research shows.
Opinion
opinion Don Martin: Poilievre has the field to himself as he races across the country to big crowds
It came to pass on Thursday evening that the confidentially predictable failure of the Official Opposition non-confidence motion went down with 204 Liberal, BQ and NDP nays to 116 Conservative yeas. But forcing Canada into a federal election campaign was never the point.
opinion Don Martin: How a beer break may have doomed the carbon tax hike
When the Liberal government chopped a planned beer excise tax hike to two per cent from 4.5 per cent and froze future increases until after the next election, says political columnist Don Martin, it almost guaranteed a similar carbon tax move in the offing.
opinion Don Martin: Pierre Poilievre's road to apparent victory will soon start to get rougher
Pierre Poilievre and his Conservatives appear to be on cruise control to a rendezvous with the leader's prime ministerial ambition, but in his latest column for CTVNews.ca, Don Martin questions whether the Conservative leader may be peaking too soon.
opinion Don Martin: The Trudeau lessons from Brian Mulroney's legacy start with walking away
Justin Trudeau should pay very close attention to the legacy treatment afforded former prime minister Brian Mulroney, who died on Thursday at age 84, writes columnist Don Martin.
opinion Don Martin: ArriveCan debacle may be even worse than we know from auditor's report
It's been 22 years since a former auditor general blasted the Chretien government after it 'broke just about every rule in the book' in handing out private sector contracts in the sponsorship scandal. In his column for CTVNews.ca, Don Martin says the book has been broken anew with everything that went on behind the scenes of the 'dreaded' ArriveCan app.
CTVNews.ca Top Stories
Grandparent scam: London, Ont., senior beats fraudsters not once, but twice
It was a typical Tuesday for Mabel Beharrell, 84, until she got the call that would turn her world upside down. Her teenaged grandson was in trouble and needed her help.
Deaths of 4 people on Sask. farm confirmed as murder-suicide
The deaths of four people on a farm near the Saskatchewan village of Neudorf have been confirmed a murder-suicide.
CRA no longer requiring 'bare trust' reporting in 2023 tax return
The Canada Revenue Agency announced Thursday it will not require 'bare trust' reporting from Canadians that it introduced for the 2024 tax season, just four days before the April 2 deadline.
Full parole granted to man convicted in notorious 'McDonald's murders' in Cape Breton
The Parole Board of Canada has granted full parole to one of three men convicted in the brutal murders of three McDonald's restaurant workers in Cape Breton more than 30 years ago.
Incident on Calgary's Reconciliation Bridge comes to safe resolution
Nearly 20 hours after a man climbed and remained perched on top of the Reconciliation Bridge in downtown Calgary, the situation came to a peaceful resolution.
Sunshine list: These were the Ontario public sector's highest earners in 2023
Ontario released its annual sunshine list Thursday afternoon, noting that the largest year-over-year increases were in hospitals, municipalities, and post-secondary sectors.
George Washington family secrets revealed by DNA from unmarked 19th century graves
Genetic analysis has shed light on a long-standing mystery surrounding the fates of U.S. President George Washington's younger brother Samuel and his kin.
'We won't forget': How some Muslims view Poilievre's stance on Israel-Hamas war
A spokesman for a regional Muslim advocacy group says Conservative Leader Pierre Poilievre's stance on the Israel-Hamas war could complicate his party's relationship with Muslim Canadians.
Why some Christians are angry about Trump's 'God Bless the USA' Bible
Former U.S. President Donald Trump is officially selling a copy of the Bible themed to Lee Greenwood’s famous song, 'God Bless the USA.' But the concept of a Bible covered in the American flag has raised concern among religious circles.
Local Spotlight
Conservation officers seize 9-foot python from Chilliwack home
B.C. conservation officers recently seized a nine-foot-long Burmese python from a home in Chilliwack.
N.B. man wins $64 million from Lotto 6/49
A New Brunswicker will go to bed Thursday night much richer than he was Wednesday after collecting on a winning lottery ticket he let sit on his bedroom dresser for nearly a year.
Ontario auto-insurance changes could leave some vulnerable, says expert
The Ontario government is introducing changes to auto-insurance, but some experts say the move is ill-advised.
Tipping is off the table at this Toronto restaurant
A Toronto restaurant introduced a surprising new rule that reduced the cost of a meal and raised the salaries of staff.
A tiny critter who could: Elusive Newfoundland Marten makes improbable comeback
Newfoundland’s unique version of the Pine Marten has grown out of its threatened designation.
Ontario man loses $12K to deepfake scam involving Prime Minister Justin Trudeau
A Toronto man is out $12,000 after falling victim to a deepfake cryptocurrency scam that appeared to involve Prime Minister Justin Trudeau.
Record-setting pop tab collection for Ontario boy
It started small with a little pop tab collection to simply raise some money for charity and help someone — but it didn’t take long for word to get out that 10-year-old Jace Weber from Mildmay, Ont. was quickly building up a large supply of aluminum pop tabs.
'I was just like, holy cow!': Saskatoon dumpster divers reclaim wasted valuables
There’s a group of people in Saskatoon that proudly call themselves dumpster divers, and they’re turning the city’s trash into treasure.
Ontario to balance budget ahead of 2026 election, citing delay due to 'economic uncertainty'
Ontario is facing a larger than anticipated deficit but the Doug Ford government still plans to balance its books before the next provincial election.