Ottawa matches U.S. with up to $13-billion in subsidies to land Volkswagen EV battery plant – by Adam Radwanski (Globe and Mail – April 21, 2023)

The federal government will provide Volkswagen with up to $13-billion in production subsidies for the new electric-vehicle battery plant it plans to build in St. Thomas, Ont. – nearly double the estimated $7-billion cost of construction.

Ottawa’s backing, which also includes about $700-million in additional support for nearer-term capital costs, is by far the most generous subsidy that Canada has ever provided to an automaker for locating a factory here.

The arrangement will be formally announced at an event in St. Thomas on Friday, but was confirmed by a federal official on Thursday. The Globe is not identifying the source, because they were not authorized to discuss the matter publicly.

The federal funding is meant to match the subsidy Volkswagen would have received through United States President Joe Biden’s Inflation Reduction Act, had it decided to build the factory in the U.S. instead. And it includes a provision that if the U.S. stops offering the subsidies, Canada will stop as well.

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