Federal and Ontario government subsidies that total $28.2-billion for two electric vehicle battery plants will take 20 years to break even, not five as the federal government has suggested, according to a new report by Parliamentary Budget Officer Yves Giroux.
Tuesday’s PBO report takes a closer look at two major announcements earlier this year aimed at securing Ontario manufacturing jobs in the EV sector. At an April news conference in St. Thomas, Ont., Prime Minister Justin Trudeau announced $13.2-billion in federal production subsidies for a new EV battery plant to be built by Volkswagen.
The Prime Minister’s Office and Innovation Minister François-Philippe Champagne said at the time that the full economic impact of the project will equal the value of the government subsidies in less than five years, stating that Ottawa would quickly break even on the deal.
Then in July, Ottawa and Ontario announced subsidies for a Stellantis-LG Energy Solutions EV battery manufacturing plant in Windsor worth up to $15-billion. The July announcement also updated the details of the Volkswagen deal, stating that the subsidies for both plants will be split in a way that will see Ottawa cover two-thirds of the cost, with Ontario paying the remaining third.
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