Justin Trudeau and Doug Ford Reach Tentative Deal Worth Billions More to Save Stellantis EV Battery Plant
Justin Trudeau and Doug Ford have reportedly reached a tentative agreement with Stellantis to save the Windsor battery factory, a deal that could be worth over $13 billion in subsidies. Sources indicate that the French parent company of Chrysler, Jeep, and Fiat may receive even more Canadian tax dollars than Volkswagen, as the German automaker is receiving subsidies to build a similar electric vehicle (EV) “gigafactory” in St. Thomas.
The agreement aims to prevent Stellantis from relocating its EV facilities to the United States, a move that could have significant implications for the future of Stellantis’s Brampton auto assembly plant. The company’s board of directors met in Paris to discuss the situation.
Confidential sources in Ottawa and Queen’s Park revealed that Premier Doug Ford assured his federal counterparts that the Ontario government would step up to ensure the preservation of Stellantis’s EV facilities. Ford’s personal rapport with Deputy Prime Minister Chrystia Freeland is said to have played a crucial role in clearing the intergovernmental logjam, enabling the parties to reach a timely arrangement ahead of the Stellantis board meeting.
However, top federal and provincial officials insist that details are still being finalized, and there is still some work to be done before the deal is confirmed. Stellantis previously halted construction of its Windsor project, a joint venture with LG Energy Solution, following reports that the company was considering relocating to the United States due to generous subsidies offered by President Joe Biden’s Inflation Reduction Act.
The agreement is expected to involve significant contributions from the Ontario government, with sources indicating that the province is prepared to offer billions in subsidies to Stellantis. It is likely that Ontario will pay a substantial portion of the production incentives, potentially between one-quarter and one-third, while the federal government will cover the remaining costs.
While Stellantis’s production volume in Windsor is lower than Volkswagen’s planned output in St. Thomas, the French automaker could receive even greater subsidies. This is due to the earlier start date for manufacturing battery modules, which triggers subsidies sooner than Volkswagen’s timeline.
The negotiations between the parties are still ongoing, with federal and provincial officials working to finalize the details of the agreement. The potential deal highlights the personal relationship and rapport between Premier Doug Ford and Deputy Prime Minister Chrystia Freeland, which has played a crucial role in overcoming intergovernmental obstacles. The officials involved remain confident that a deal will be reached, but it is important to note that further discussions and negotiations are required to finalize the terms and secure the future of the Windsor battery factory.
