The Canadian government will be providing subsidies for years to a Volkswagen battery factory being built in Canada that’s expected to last much longer.
“Some of this is contingent as to how long it will take to build and so on, but there will be this period of six or seven years or so where support will be provided by government. The facility is expected to last many years beyond that,” he said.
The heavily-subsidized factory is being built in St. Thomas, Ontario, and scheduled to be constructed by 2027.
Only 5 percent of cars being driven in Canada are electric, as reported by Blacklock’s Reporter. The subsidy for Volkswagen was almost three times the annual value of all federal subsidies provided to all corporations in Canada, an average of $5.5 billion per year according to Industry Canada.
When Industry Minister Francois-Philippe Champagne announced roughly $13.7 billion in federal subsidies on April 20, he said the factory “is going to be there for 100 years.”
“Talk to any banker. He would say if you get your money in five years for a plant that’s going to be there for 100 years that’s a pretty good deal,” said Champagne.
Again on April 21, the minister said, “The company is planning to be here for a hundred years.”
The federal government has refused to release the contract with Volkswagen to the public, and has not provided details on how the government expects it will be paid back within five years.
Kennedy testified before the committee that the government felt it had to subsidize the electric battery plant to anchor the automotive industry.
“The entire automotive supply chain and industry are rapidly moving to battery electric vehicles. If Canada is not able to successfully make that transition, not just the handful of companies that make the cars will arguably disappear but the entire cluster will disappear which is hundreds of thousands of jobs,” he said.
“A central argument in favour of supporting a firm such as Volkswagen in establishing a battery facility would be something like this: Canada has a significant automotive cluster anchored by a relatively small handful of firms and those firms, it’s true, employ a lot of people,” testified the deputy minister.
“If you think of the traditional shopping mall with hundreds of stores in it, in the old days it was traditionally anchored by three or four large department stores. The argument is not just you’re going to put this plant here and it’s going to create ‘x’ jobs,” said Kennedy. “The argument is this is an entire industry.”
