Stellantis, governments reach deal on Windsor battery plant construction

Automaker Stellantis has reached an agreement with the federal and Ontario governments on the construction of a planned electric vehicle battery plant in Windsor.

Stellantis and LG Energy Solution said Wednesday the construction of their plant, called NextStar Energy, would resume immediately after they reached a "binding" financing deal with the governments of Canada and Ontario.

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Unifor, which represents unionized workers at Stellantis, said in a statement Wednesday that it welcomes the agreement to resume the plant's construction.

"We knew the high stakes. We knew these commitments had to be kept because the alternative would have been unthinkable for so many workers," Unifor National president Lana Payne said.

"I know what resonated with all parties was the persistent message from our union that thousands upon thousands of workers' livelihoods were hanging in the balance throughout this dispute."

Payne also thanked Prime Minister Justin Trudeau, Ontario Premier Doug Ford and the company "for reaching this important conclusion and taking the necessary action to secure the Stellantis production footprint in Canada."

In a statement, Deputy Prime Minister Chrystia Freeland and Minister of Innovation, Science and Industry Francois-Philippe Champagne also confirmed that an agreement had been reached.

"This agreement is good for workers and it is good for Canada. It will create and secure thousands of jobs — both in the auto sector and in related industries across Canada — and will further solidify Canada's place as a leader in the global electric vehicle supply chain," the statement read. "We look forward to sharing further details with Canadians."

Stellantis and LG Energy Solution began building the $5-billion battery plant last year but stopped construction in May to negotiate for government funding in order to match what the United States would offer through its Inflation Reduction Act.

The act includes production subsidies for clean technology, including EV batteries. It led to a deal between Canada and Volkswagen that will provide up to $13 billion for the company's first overseas "gigafactory" in St. Thomas, Ont.

The feds, as well as some provincial governments such as Ontario and Quebec, have pledged billions of dollars to companies like General Motors, Volkswagen and Stellantis to attract business and secure Canada's EV battery supply chain.

Stellantis had called on the Canadian government to "keep its commitments," with the original deal seeing Ontario and Canada contribute $500 million each toward the capital costs of the new plant.

Ontario Economic Development Minister Vic Fedeli told The Canadian Press that Wednesday's deal "mirrors" the benefits that Stellantis and LG would have received in the U.S.

"We've heard that Stellantis expects, if they were in the United States, over the course of time, they would receive $15 billion in tax breaks, so that would be expected in Canada," Fedeli said, adding that this would be roughly over 10 years and depend on start dates, as well as production levels.

Windsor Mayor Drew Dilkens also told The Canadian Press that had the deal not happened, it would have had "a very negative impact on the future of our region."

"The last seven weeks has certainly been a roller-coaster ride for people in the community as we've waited for news on whether this deal could be secured," he said.

In May, Ford confirmed that more money would be put on the table.

"This is all about saving jobs and giving people the quality of life they deserve in southwestern Ontario."

In June, Champagne said the federal government had delivered a written offer to Stellantis and LG, saying that negotiations are progressing.

"I think we're getting to the end of it," he said.

The head of General Motors Canada recently told CTV's Question Period that she would like to see the provincial and federal governments offer more consistent incentives to people hoping to purchase EVs in order to compete with the U.S.

With files from The Canadian Press