Parliamentary Budget Officer (PBO) Yves Giroux is further analyzing the federal government’s large subsidy deals made with both Volkswagen and Stellantis to incentivize the automakers to build electric-vehicle battery plants in Canada.
The PBO is requesting that the Department of Industry disclose to his office a copy of the agreement letter announced earlier this month between the federal and Ontario governments and Stellantis and LG Energy Solution, committing about $15 billion in subsidies for the companies to continue building an EV battery plant in southern Ontario.
Mr. Giroux sent a
letter to Industry Minister François-Philippe Champagne on July 17 requesting the information from his department, as first reported by Blacklock’s Reporter. The budget officer asked that Mr. Champagne’s department release the information by Aug. 1 at the latest.
“If access to the requested information cannot be granted by that date, a response must be provided by you or your deputy minister as soon as possible,” Mr. Giroux wrote.
Five days earlier, the PBO had sent another
letter to Mr. Champagne requesting the federal government’s funding contract with Stellantis and LG Energy Solution and also the government’s revised contract with Volkswagen, along with any other “pertinent policy documents.”
Mr. Giroux requested that these documents be sent to his office no later than July 26.
Battery Plants
The PBO published a
report in June on Ottawa’s subsidy deal with Volkswagen whereby the federal government estimated that it committed around $13.2 billion in subsidies and a $700 million grant to incentivize Volkswagen to build a new EV battery plant in St. Thomas, Ont., rather than in the United States.
However, Mr. Giroux
wrote in his report that Ottawa’s deal with Volkswagen would actually cost over $16 billion in total subsidies because of tax adjustments.
Ottawa and the Ontario government made their $15-billion deal with Stellantis and LG Energy Solution in early July, several months after the two companies had
halted construction on an EV battery plant in southern Ontario as they sought more government subsidies to compete with what was being offered in the U.S. through tax breaks due to the country’s new Inflation Reduction Act.
The PBO is yet to release a report on the deal with Stellantis, but Mr. Giroux sent a
letter to Finance Minister Chrystia Freeland on July 12 requesting her department’s “annual fiscal forecast of the production incentive for Stellantis, as well as the revised forecast for Volkswagen, including the amounts that are incremental to the fiscal framework.”
The PBO also requested that Ms. Freeland’s department send its “methodology and assumptions” used to outline its estimated fiscal forecast of the incentive subsidies, including the department’s “assumptions regarding production capacity and production levels of the facility.”
Mr. Giroux requested that the Finance Department send the documents by July 26.
