Ontario Offering More Money to Stellantis, Ford Says

Ontario Premier Doug Ford speaks during a press conference at the Stellantis Automotive Research and Development Centre in Windsor, Ont. on May 2, 2022. The Canadian Press/ Geoff Robins

Ontario is offering more money in a bid to keep automaker Stellantis from pulling out of building an electric vehicle battery plant in Windsor, Ont., Premier Doug Ford said Friday.

Stellantis and LG Energy Solution announced last year that they were building the $5-billion plant, but have in recent days stopped construction and warned they were implementing contingency plans because the federal government hasn’t lived up to an agreement.

The CEOs of the two companies wrote last month to Prime Minister Justin Trudeau, saying Ottawa had confirmed in writing five times that it would match production incentives under the United States’ Inflation Reduction Act, but has not delivered on those commitments.

But the federal government has been pressuring Ontario to pitch in as well, saying the province also has to pay its “fair share.”

Ford has said he is disappointed with how the federal government has handled the issue since the province didn’t make those production subsidy commitments, but said he is working with officials in Ottawa.

“I will confirm we’re putting more money on the table,” he said after an unrelated announcement in St. Catharines, Ont.

“This is all about saving jobs and giving people the quality of life they deserve in southwestern Ontario.”

Stellantis has said the battery facility to supply plants in North America will employ about 2,500 people. Auto parts makers expect the total impact to be about 10,000 indirect jobs.

The deal Ontario previously signed with Stellantis committed the province to a $500-million capital contribution, which is the same amount it promised to Volkswagen to build an electric vehicle battery plant in St. Thomas, Ont.

Canada offered Volkswagen a $700-million capital contribution and up to $13 billion in production subsidies for the batteries it makes over the first decade, to match what the company would get in production tax credits under the Inflation Reduction Act.

Stellantis and LG sent the letter to Trudeau around the same time the terms of the Volkswagen deal were made public.

Finance Minister and Deputy Prime Minister Chrystia Freeland has said that MPs from other provinces and other provincial governments have been asking what their provinces are going to get as they watch Ottawa pour billions into auto deals in Ontario, so provinces that benefit from the federal government’s $120-billion-plus green industrial strategy should “pay their share.”