Ottawa is spending $500M toward electric vehicle battery plant in Windsor, Ont., MP’s tweet reveals

Federal and Ontario politicians have been tight-lipped about the amount of money the government is investing to secure a new electric vehicle (EV) battery manufacturing plant in Windsor, Ont., but a Toronto-area MP shared in a tweet that Ottawa’s contribution is $500 million.

During an announcement Wednesday for what is being called the “largest automotive investment in the history,” prominent politicians — including Ontario Premier Doug Ford and federal ministers of transport and innovation — would not disclose the financial incentives that the government had offered to secure the $4.9 -billion factory in Canada.

When asked for dollar amounts, Ford said, “I can’t divulge that. It would compromise some negotiations moving forward with other companies as well, but it’s a massive investment and its hundreds of millions of dollars.”

On Wednesday afternoon, MP for Toronto—Danforth Julie Dabrusin, who also attended the announcement in Windsor, said the federal government is contributing $500 million toward the project.

This tweet by Dabrusin was deleted Thursday. (Julie Dabrusin/Twitter)

“Today, on behalf of Minister [Jonathan Wilkinson]I joined Ministers [Francois-Philippe Champagne] and [Omar Alghabra] in Windsor to announce $500M in federal funding to support a historic investment by LGES and Stellantis for a total of $5B,” Dabrusin, who also serves as parliamentary secretary to the minister of natural resources, said on Twitter.

By mid-morning Thursday, the MP had deleted the tweet.

“This marks Canada’s largest-ever investment in the Canadian auto sector and will build electric vehicle (EV) batteries right here at home and create over 2,500 jobs,” said Dabrusin in a subsequent tweet.

The project is a joint-venture deal between automaker Stellantis and South Korean battery manufacturer LG Energy Solution, and is set to provide 2,500 new jobs to the region. It’s expected to be operational in 2024.

All levels of government have supported the project, including an incentive package from the City of Windsor that includes a land deal for the massive factory, said to be the size of 112 NHL hockey rinks.

A member of Champagne’s office speaking on background said the final investment figure from the federal government has not been finalized with the companies, which is why it has not been publicly confirmed.

The source said that in previous iterations of such deals, about a 10 per cent investment has been in the range.

Competition is high to secure an investment

On Wednesday afternoon, Innovation, Science and Industry Minister François-Philippe Champagne said on CBC’s Power and Politics he could also not release those details as the government is in final negotiations with the two companies in the highly competitive sector.

“With respect to the amount, we will be a strategic partner, we’re just in the final round of negotiation with the company, but I think you would appreciate, this is a highly competitive sector, so some of these terms are sensitive commercially ,” Champagne told CBC’s Vassy Kapelos.

The government was in competition with a number of states in the US and elsewhere in Europe to secure the factory, said Champagne.

WATCH | Champagne speaks on Power and Politics about the new plant:

Premier Ford: ‘This is the largest automotive investment in the history of our province’

Innovation, Science and Industry Minister François-Philippe Champagne joins Power & Politics to discuss news of a new electric vehicle battery facility coming to Windsor, Ontario. 9:21

Flavio Volpe, president of the Auto Parts Manufacturers Association, said government spending in the auto sector on other projects, like the millions recently announced for a Honda plant upgrade in Ontario, range between 10 and 20 per cent.

He said the governments are likely working to secure other investments and don’t want to show their cards too soon.

“They have to disclose, and so I think they will in due time. But I think people should probably have in their minds that it’s the same quantum as the Honda investment last week, which was around 10 per cent for each level of government, said Volpe.

Flavio Volpe, president of the Automotive Parts Manufacturers’ Association, says governments will likely disclose their investment toward the new battery plant soon. (Chris Ensing/CBC)

“Frankly, that is what you need to do to to bid for these major league franchises, and we’ve seen over the years that that number has gone up to as high as 50 per cent in other places.”

Volpe said Canada would not have to go so far as to support 50 per cent of an investment project, but that a 10 to 20 per cent investment can be profitable for the expenditure.

“What we’ve said to people in government for years is a 10 or 20 per cent investment by government lends a 25 year investment by companies,” said Volpe. “And the payback on the tax base from the personal taxes that the employees pay and with the corporate taxes, it’s usually about a four or five year payback, and that’s not a bad return.”

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