Ford, Freeland spar over who pays for Stellantis battery plant (2023)

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OTTAWA – Queen’s Park and Ottawa are at a standoff over funding for a multi-billion battery plant in Windsor, Ont., with the 2,500 jobs hanging in the balance as the company threatens to walk away if a deal can’t be reached.

Stellantis and its partner LG announced the battery plant in January 2022, pledging to create 2,500 new jobs in the community with the $5-billion plant. Details were kept secret at the time, but the company appears to have received $1 billion, split between the federal and provincial governments, to build the plant.

Stellantis is the parent company of Chrysler, Jeep and Fiat and has a significant presence in Windsor, with a major assembly plant already in place.

Earlier this week, however, the company announced it was putting construction of the battery plant on hold. Since it first agreed to construct the plant, U.S. President Joe Biden’s administration passed the inflation reduction act, which gives large subsidies not just for the construction of green facilities like battery plants, but ongoing subsidies to help with their operations.

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Ottawa matched Biden’s subsidies in its deal with Volkswagen, which could give the company $13 billion for production costs, on top of more than $1 billion for construction of its battery plant in St. Thomas, Ont.

Finance Minister Chrystia Freeland said Wednesday they support getting more battery manufacturers in Canada and construction on the Stellantis/LG project will get back on track.

“I am really optimistic and really confident that we’re gonna get this across the line,” she said.

But she said other players in the deal have to be willing to come to the table as well and Ontario has a lot to benefit.

“I’m going to be sure that we are careful with how we spend our money, that we are getting fair value for the federal dollars that are invested and the other partners, in this case Stellantis and the province of Ontario, are making a fair contribution,” she said.

Ontario Premier Doug Ford said he is disappointed to hear Freeland suggest Ontario isn’t contributing. He said they’re giving the same support for Stellantis that they did for Volkswagen and it’s up to Freeland to handle production subsidies.

“We did put in our fair share, exactly what we did with Volkswagen. It’s disappointing it’s come to this right now, but we believe in working with the federal government,” he said. “My question to the feds, what is our fair share?”

In a letter Stellantis and LG’s CEO sent to Prime Minister Justin Trudeau in April, the companies urged Trudeau to finalize agreements they had made with the company to provide ongoing support similar to what Volkswagen received.

It's disappointing it's come to this right now, but we believe in working with the federal government.

Ontario Premier Doug Ford

“We appreciate that your government has provided us with five separate written documents confirming your commitment to match the production incentives under the U.S. Inflation Reduction Act,” they wrote.

The letter indicated there was a “mutually satisfactory special contribution agreement” waiting for the government’s signature. The two companies said in the letter that not signing that deal was delaying the project.

“The continued delay in executing this agreement is bringing significant risk to the project,” the letter reads.

Freeland didn’t answer why Ontario was being asked to contribute more to this deal than they had with Volkswagen, but said there was a broader question of regional fairness.

“What we always do is have the contribution of the federal government and the provinces and one of the reasons for that is regional fairness,” she said. “That’s what I’ve heard from MPs at finance committee, MPs from other provinces. That is what I am hearing from premiers of other provinces and that is entirely reasonable.”

Ford said the province and the feds are talking about the deal, but didn’t get into specifics. He said they will find a way to keep the deal in place.

“Our goal is to protect the people and the jobs in Windsor will do whatever it takes to protect those jobs.”

Twitter: RyanTumilty
Email: rtumilty@postmedia.com