Unifor, Canada’s largest private sector union, is pleased that Ottawa and Queen’s Park have reached a deal with Stellantis to resume construction of its Windsor electric vehicle battery plant.
Construction on the $5-billion lithium-ion battery project came to a halt in mid-May after Stellantis claimed it wanted American-style incentives, such as tax credits, for its project and was reconsidering its investment in southwestern Ontario.
The plant is a joint venture between Stellantis and LG Energy Solution.
Last year, the feds and province originally pledged $500 million each toward building costs.
This week, both levels of government have reached an “auto pact” with Stellantis-LG according to a news release from Premier Doug Ford’s office, providing up to $15 million in funds, dubbed “performance incentives,” for certain conditions and benefits to Ontario and Canada.
"We knew the high stakes,” said Unifor National President Lana Payne in a July 5 statement thanking Prime Minister Justin Trudeau and Ford.
“We knew these commitments had to be kept because the alternative would have been unthinkable for so many workers. I know what resonated with all parties was the persistent message from our union that thousands upon thousands of workers' livelihoods were hanging in the balance throughout this dispute.”
Want to read more stories about business in the North? Subscribe to our newsletter.
Apparently, the same deal extends to the Volkswagen Group and its plans to establish a battery plant in St. Thomas. The European car maker is eligible to receive up to $13 million in “performance incentives.”
Conceivably, these battery plants will be supplied by critical minerals mined and processed in Northern Ontario as part of a homegrown, domestic mine-to-assembly supply chain.
According to the deal, Ottawa will provide two-thirds of the funding with Ontario providing the remainder for these two projects.
The funding is contingent on the production and sale of batteries to each plant project. Should incentives offered under the American act be reduced or cancelled, so would the performance incentives under the Canada-Ontario agreement.
In a joint statement, the two governments said these “once in a generation” projects will “anchor” the auto industry and manufacturing jobs in Canada.
The governments said these subsidies are a direct response to the U.S. Inflation Reduction Act, passed in Washington last year, offering US$375 billion in tax credits to incentivize the transition to all things related to clean energy.
