Trudeau's Industry Minister tables $13.8 billion in Volkswagen subsidies for new EV battery plant

The Canadian Press / Adrian Wyld and Tobias Arhelger - stock.adobe.com

Trudeau's Industry Minister confirmed his government has agreed to subsidize Volkswagen (VW) $13.8 billion to build a single EV battery factory in Ontario — nearly triple the average annual cost of all federal aid to corporations. In a 2018 testimony, the Industry Department said corporate federal aid averaged $5.5 billion annually, including loans, grants and guarantees. 

"This is going to be the largest plant in Canada," François-Philippe Champagne told reporters. "You're talking about 391 football fields. This is a game changer for the nation."

According to Blacklock's Reporter, Champagne first disclosed the figure to Bloomberg News after ignoring a March 30 order from the Commons industry committee for details of the Volkswagen subsidy. 

On April 17, the industry minister disregarded a request from MPs for details of new federal subsidies for Volkswagen. The Commons industry committee gave him until April 24 to disclose the VW contract.

"Two things: number of jobs, amount of money," said Conservative MP Brad Vis, as reported by Blacklock's Reporter. "I am not asking for anything inappropriate. They'll give us the numbers if the government stands by their investment." 

Ontario will be ground zero for a new Volkswagen (VW) automotive manufacturing plant — in St. Thomas, to be exact — creating 5,000 good-paying jobs and outsourcing work to local suppliers from the industry.https://t.co/FwrT11cUzn

— Rebel News Canada (@RebelNews_CA) March 18, 2023

On March 13, Champagne announced the factory would be built in St. Thomas, Ontario, calling it "amazing news" without revealing the cost of subsidies.

"What it says to me, to the whole world, is that Canada can win, and as Canadians, we can win big at a time where there is a lot of competition for these investments," said the minister on March 21.

"When will we find out how much we had to give?" asked a reporter. "We are going to do that in due course," he continued, calling the VW plant "an investment that will pay dividends for generations to come." 

"Is 13 too much?" asked another reporter. "Well, I would say the number that matters is five," replied the minister. 

"What does that mean?" asked that reporter. "Five years, that's the payback," replied Champagne.

Despite the push by the Trudeau Liberals to have all new vehicles sold in Canada be electric vehicles (EVs) by 2035, a recent study uncovered that they could lose up to 30% of their range in freezing temperatures, possibly jeopardizing that target.https://t.co/f3uapYvLCs

— Rebel News Canada (@RebelNews_CA) February 9, 2023

Volkswagen announced the plant would create nearly 8,000 jobs — employing 2,000 to 3,000 when it opens in 2027. PowerCo SE, the battery division of VW, is expected to start battery production at the 1,500-acre "gigafactory" when it opens.

"There will be two to three million people coming to Ontario during the next ten years, and we will get our fair share of them," said St. Thomas Mayor Joe Preston.

MP Brad Vis clarified he "[doesn't] need obfuscation," adding, "We need to have transparency."

"The number of $15 billion was being thrown around," Vis told the committee in March, as reported by Blacklock's Reporter. "I know the government of Germany offered Volkswagen over $10 billion to have a lithium battery processing plant in that country."

"We're talking a lot of money here."

State officials have yet to reveal how they plan on dealing with the overwhelmed power grid during the heatwave — either now or in the future, when more electric vehicles are expected to hit the roads. https://t.co/9OsJJ9HPHl

— Rebel News USA (@RebelNews_USA) September 1, 2022

The Canadian Taxpayers Federation (CTF) said even if the $13.8 billion figure is to be believed, the cost to taxpayers is equivalent to $1.7 million per job.

In a 2022 report, department auditors admitted they could not verify job claims then and occasionally inflated their estimates. "The document review could not validate the number of jobs created or maintained to date," said the Evaluation Of The Innovation Superclusters Initiative report.

According to an access to information request obtained in 2020, the Industry Ministry said they "guessed" their job creation claims.

"Taxpayers don't have $13 billion to give to a multinational corporation," said Franco Terrazzano, federal director of the CTF. "That money could be used to build over a dozen hospitals."

From 2007 to 2019, the federal government has spent $76.7 billion on business subsidies, according to the Fraser Institute.

Rebel reporter Alex Dhaliwal (@westcdnfirst) was just kicked out of NDP Leader Rachel Notley's press conference. Notley accuses Premier Smith of dodging questions but she removes independent journalists to avoid being held to account.https://t.co/zl3Neyv6Zb pic.twitter.com/7gn9m6UUrr

— Rebel News (@RebelNewsOnline) April 17, 2023