Stellantis has what it needs to make decision on Windsor battery plant: Champagne
The federal government has delivered a written offer to Stellantis and LG Energy Solutions, Industry Minister Francois-Philippe Champagne said Tuesday.
Champagne said that should be all the companies need to make a decision on the fate of their planned electric vehicle battery plant in Windsor, Ont.
The minister said the negotiations are progressing, and "I think we're getting to the end of it."
He would not say if this was a final offer, but he did say he expects an answer from Stellantis soon.
"You know, they have what they need, and therefore I think that should be very short now," he said.
A spokeswoman for Stellantis confirmed the offer had been received but would say no more beyond the fact it is "currently under financial and legal review."
Champagne would give no details on the size of the offer except to point out his government's repeated promise to respond as needed to the massive subsidies created in the United States under the Inflation Reduction Act.
"There should be no surprise," he said. "I mean, we said that in the fall economic statement, we would be levelling the playing field with the United States when it comes to the IRA."
He added that these are "generational opportunities."
"These large manufacturing facilities, most of them will be decided within the next six to twelve months in North America. So therefore, either you win now, or you're out of that industry for 50 years or until there's a new technology."
Canada and Ontario's deal with Volkswagen to build a battery plant in St. Thomas, Ont., is worth $1.2 billion in capital and up to $13 billion in production subsidies through to 2033.
The Stellantis plant is half the size, but is set to begin making batteries three years earlier, so it could get even more in subsidies.
Prime Minister Justin Trudeau characterized the offer as a prudent one in order to ensure that Canada is part of the transition to a net-zero economy.
"It's an offer that is both respectful of the taxpayer dollars that are going into it, but mostly it's one that is reasonable to create great jobs for the future, for generations to come," he said before the Liberals' weekly cabinet meeting in Ottawa.
All of this is because of the Inflation Reduction Act in the United States, which last August put forward enormous production tax credits for advanced manufacturing including EV batteries.
The tax credits are so generous they will cut the cost of producing a battery in half, and companies have made clear to Canada that it must match the IRA or be left out.
Those includes Stellantis and LG Energy Solutions, which announced in March 2022 that they would be building a 45 gigawatt electric vehicle battery plant in Windsor, aiming for the first batteries to come off the line in early 2024.
Canada and Ontario each agreed to provide $500 million toward the $5 billion capital price tag. But as a result of the IRA, the two companies asked to renegotiate their deal and Canada agreed.
The discussions went slowly.
In April, the companies wrote to Trudeau warning that they would have to make tough decisions if his government did not make good on its promise to come back to the table with more cash.
In mid-May, they stopped construction on the plant, ratcheting up the pressure on the federal government to get a new deal. Champagne and Finance Minister Chrystia Freeland both said they needed Ontario to contribute more, and that the companies needed to be "reasonable."
Ontario did not contribute to the production subsidies for Volkswagen, but it is spending several hundred million dollars on infrastructure including to roads and utilities around the planned factory site.
Champagne and Freeland both said Ontario would have to contribute to the subsidies for Stellantis, noting that the federal government has 13 provinces and territories to support and the benefits of the plants would largely be felt in Ontario.
Premier Doug Ford initially balked at that. But he later agreed to contribute additional dollars.
Ontario's economic development minister said Tuesday the federal government's offer contains a commitment from the province to pay up to one-third of the cost, and he hopes to hear good news from Stellantis and LG "very, very shortly."
"I hope it happens very quickly," Vic Fedeli said Tuesday.
"The people of Windsor are looking for answers and we want to have those answers as soon as possible."
Fedeli wouldn't say how much more money Ontario could be on the hook for with the promise to foot one-third of the new bill, but he said it will be worthwhile to spur an end-to-end EV production chain in the province.
"When we think of these plants, there's still many, many more plants to come -- all of the companies that need to feed the two battery plants that we have here," he said.
"Each of those not only are billion-dollar plants, they all add thousands of employees. So we're growing all of Ontario, and this is the investment that we're making to be the leader."
The deal with Volkswagen was tailored to mimic the IRA, so much so that if the U.S. reduces or eliminates its subsidies earlier than 2033 as planned, Canada's subsidies will be reduced by the same amount.
The IRA offer includes a full tax credit of $35 per kilowatt hour until 2030, and then smaller amounts until the credits disappear entirely in 2033.
This report by The Canadian Press was first published June 6, 2023.
-- With files from Allison Jones in Toronto.
IN DEPTH
Budget 2024 prioritizes housing while taxing highest earners, deficit projected at $39.8B
In an effort to level the playing field for young people, in the 2024 federal budget, the government is targeting Canada's highest earners with new taxes in order to help offset billions in new spending to enhance the country's housing supply and social supports.
'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.
'Democracy requires constant vigilance' Trudeau testifies at inquiry into foreign election interference in Canada
Prime Minister Justin Trudeau testified Wednesday before the national public inquiry into foreign interference in Canada's electoral processes, following a day of testimony from top cabinet ministers about allegations of meddling in the 2019 and 2021 federal elections. Recap all the prime minister had to say.
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.
Supports for passengers, farmers, artists: 7 bills from MPs and Senators to watch in 2024
When parliamentarians return to Ottawa in a few weeks to kick off the 2024 sitting, there are a few bills from MPs and senators that will be worth keeping an eye on, from a 'gutted' proposal to offer a carbon tax break to farmers, to an initiative aimed at improving Canada's DNA data bank.
Opinion
opinion Don Martin: Gusher of Liberal spending won't put out the fire in this dumpster
A Hail Mary rehash of the greatest hits from the Trudeau government’s three-week travelling pony-show, the 2024 federal budget takes aim at reversing the party’s popularity plunge in the under-40 set, writes political columnist Don Martin. But will it work before the next election?
opinion Don Martin: The doctor Trudeau dumped has a prescription for better health care
Political columnist Don Martin sat down with former federal health minister Jane Philpott, who's on a crusade to help fix Canada's broken health care system, and who declined to take any shots at the prime minister who dumped her from caucus.
opinion Don Martin: Trudeau's seeking shelter from the housing storm he helped create
While Justin Trudeau's recent housing announcements are generally drawing praise from experts, political columnist Don Martin argues there shouldn’t be any standing ovations for a prime minister who helped caused the problem in the first place.
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.
CTVNews.ca Top Stories
From outer space? Sask. farmers baffled after discovering strange wreckage in field
A family of fifth generation farmers from Ituna, Sask. are trying to find answers after discovering several strange objects lying on their land.
NEW Iconic Canadian song turns 50
Andy Kim's 'Rock Me Gently' is marking a major milestone, as it celebrates its 50th anniversary.
Oprah Winfrey: I set an unrealistic standard for dieting
Oprah Winfrey said on Thursday evening that she has long played a role in promoting unhealthy and unrealistic diets.
Prince Harry, Meghan arrive in Nigeria to champion the Invictus Games and meet with wounded soldiers
Prince Harry and his wife, Meghan, arrived in Nigeria on Friday to champion the Invictus Games, which he founded to aid the rehabilitation of wounded and sick servicemembers and veterans, among them Nigerian soldiers fighting a 14-year war against Islamic extremists.
Countries struggle to draft 'pandemic treaty' to avoid mistakes made during COVID
After the coronavirus pandemic triggered once-unthinkable lockdowns, upended economies and killed millions, leaders at the World Health Organization and worldwide vowed to do better in the future. Years later, countries are still struggling to come up with an agreed-upon plan for how the world might respond to the next global outbreak.
Toronto police called to Drake's Bridle Path mansion for another alleged intruder on Thursday
Toronto police say a man who allegedly attempted to access Drake’s Bridle Path property was taken to hospital on Thursday after an altercation with security guards.
Ontario family receives massive hospital bill as part of LTC law, refuses to pay
A southwestern Ontario woman has received an $8,400 bill from a hospital in Windsor, Ont., after she refused to put her mother in a nursing home she hated -- and she says she has no intention of paying it.
Flat tire on a highway? Here's why you shouldn't try to fix it
If you're cruising down a highway and realize you have a flat tire, you may want to think twice before stopping to fix it on the side of the road.
Broadcaster and commentator Rex Murphy dead at 77: National Post
The National Post is reporting that Rex Murphy, the pundit and columnist who hosted a national call-in radio show for decades, has died.
Local Spotlight
Wilfrid Laurier football player drafted despite only playing 27 games in his entire life
A Listowel, Ont. man, drafted by the Hamilton Tigercats last week, is also getting looks from the NFL, despite only playing 27 games of football in his life.
Toronto-area dessert shop featured by Keith Lee forced to move after zoning complaint
A small Ajax dessert shop that recently received a glowing review from celebrity food critic Keith Lee is being forced to move after a zoning complaint was made following the social media influencer’s visit last month.
'Oh Crap!' New exhibit at Canada Science and Technology Museum explores human waste
The Canada Science and Technology Museum is inviting visitors to explore their poop. A new exhibition opens at the Ottawa museum on Friday called, 'Oh Crap! Rethinking human waste.'
Regina police hope new biometric monitoring system will save lives in detention facility
The Regina Police Service says it is the first in Saskatchewan and possibly Canada to implement new technology in its detention facility that will offer real-time monitoring of detainees’ vital health metrics.
Vancouver and Edmonton's mayors bet on who will win Round 2 of the playoffs. Here's what's at stake
The stakes have been set for a bet between Vancouver and Edmonton's mayors on who will win Round 2 of the Stanley Cup playoffs.
'No other life taken': Mother leads ATV helmet drive to honour daughter's legacy
A grieving mother is hosting a helmet drive in the hopes of protecting children on Manitoba First Nations from a similar tragedy that killed her daughter.
Northern Ont. woman makes 'eggstraordinary' find
A chicken farmer near Mattawa made an 'eggstraordinary' find Friday morning when she discovered one of her hens laid an egg close to three times the size of an average large chicken egg.
P.E.I. lighthouse, N.B. river spotlighted in Canada Post series
A P.E.I. lighthouse and a New Brunswick river are being honoured in a Canada Post series.
'It looked so legit': Ontario man pays $7,700 for luxury villa found on Booking.com, but the listing was fake
An Ontario man says he paid more than $7,700 for a luxury villa he found on a popular travel website -- but the listing was fake.