Ontario Construction Report staff writer
A deal with Stellantis and LG Energy Solutions to resume construction on the NextStar electric vehicle (EV) battery plant in Windsor could be worth up to $15 billion in tax breaks, according to the provincial minister of economic development.
Vic Fedeli says the province would provide up to $5 billion in tax breaks based on production over a 10-year term. An additoinal $10-billion in tax breaks would come from the federal government.
“Today, our governments are pleased to announce that we have finalized an agreement with Stellantis-LG Energy Solutions (LGES) to create and secure thousands of good-paying auto jobs and tens of thousands of indirect jobs across Canada,” said
“The agreement between our governments also extends to the project by Volkswagen Group and its subsidiary PowerCo SE to establish Volkswagen’s first overseas electric vehicle battery cell manufacturing plant in St. Thomas, Ontario. Volkswagen could receive up to $13 billion in performance incentives.
In its 2023 Budget, the federal government unveiled transformative investments in jobs and growth as part of a $120 billion clean economy plan.
The final agreement with Stellantis includes a number of conditions:
- The governments will only provide a performance incentive for batteries that Stellantis produces and sells, in line with the conditions in the agreement for the Volkswagen battery cell manufacturing plant;
- Stellantis will uphold its existing commitments in Canada and Ontario, including a production mandate at its plant in Brampton, Ontario;
- The company will invest more in Canada and Ontario, including for the establishment of a research and development facility in Windsor, Ontario;
- The operating expenses provided will only be available for as long as the U.S. Inflation Reduction Actincentives remain in effect;
- The federal government has agreed to provide Stellantis with a performance incentive on a per unit production basis of up to US$45 per kWh (US$35 per kWh for battery cells and US$10 per kWh for battery modules). Canada’s performance incentive is subject to an overall cap of C$15 billion, of which one-third is to be paid by the Ontario government.