Volkswagen and Stellantis Battery Plants Both Go Ahead

Things have calmed down significantly on the Hill now that Parliament has entered its summer recess. With that said, there was some big news this week regarding battery manufacturing in Ontario.

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The Stellatis/LG battery manufacturing plant will go ahead as planned, and the Ontario government will be paying for a third of the incentives offered to them. Additionally, Ontario will be footing the bill for one third of the incentives offered to Volkswagen to construct their new battery manufacturing plant in the province.

Back in April, Volkswagen announced that it had selected the small town of St.Thomas, Ontario to be the location for its new battery manufacturing facility, which plans to service most of the North American market for that company. The news was a major win for both the Trudeau and Ford governments, and that remains the case in polling, despite the more recent revelation that the plant will cost Canadian taxpayers approximately $13 billion in incentives offered to the German auto giant.

Following this news, Stellantis, who is in the process of constructing a battery manufacturing facility, also in Ontario, ordered a stop to construction, demanding additional support from Canada’s governments. This week, it got what it asked for, with Ontario and the Federal government agreeing to offer a total of $15 billion in incentives over a ten year period. On top of that announcement, the Ontario government also announced that it would be contributing a portion of the incentives offered by the Federal government to Volkswagen.

Despite the costs, both plants are being touted as huge wins by both levels of government, in a rare show of cooperation. The Federal government has pointed to both plants as harbingers of the greening economy, while Ontario’s government can point to the jobs and productivity benefits which fit nicely into the Ford administration’s focus on the Ontario economy.

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