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Ottawa is “very confident” it can settle a dispute with automaker Stellantis if the Ontario government pays its “fair share,” Industry Minister Francois-Philippe Champagne says.
Stellantis, one of the world’s largest automakers that makes vehicles including Chrysler, Ram and Fiat, said Monday it stopped construction on a $5-billion electric vehicle battery plant in Windsor, Ont., claiming the federal government “has not delivered on what was agreed to.”
The automaker and South Korean battery maker LG Energy Solution announced the plant last year. It was expected to create 2,500 jobs in Windsor – a vehicle manufacturing hub in Canada.
All levels of government were to provide financial support but the full amounts have not been disclosed. Stellantis said again on Tuesday that Ottawa has not held up its end of the bargain.
“I’m very confident we can come to a deal with LG and Stellantis,” Champagne told reporters in South Korea Tuesday.
“The message to our colleagues in Ontario is: pay your fair share, and we will bring this stalemate, if you want, to a conclusion.”
The stalemate prompted Ontario Premier Doug Ford on Monday to point the finger at Ottawa, saying the federal government needs to support the automaker in the same way it did Volkswagen.
A recently announced deal for the German car manufacturer to build an electric vehicle battery plant in St. Thomas, Ont., includes subsidies worth up to $13 billion plus a $700-million grant.
“It really worries me,” Ford said.
“We need the federal government to come to the table and show their support like they have all along.”
The province put up $500 million for both deals, Ford added, and is ensuring roads and energy for the plant. The federal subsidies to Volkswagen, the government has said, were intended to allow Canada to compete with the United States, where the Inflation Reduction Act (IRA) added production subsidies for batteries.
“We’ll go toe to toe with any state down in the United States,” Ford said.
“The only thing we can’t do is go toe to toe with the U.S. federal government. That’s the federal Canadian government’s job, and they can do it. We’re confident that they made a promise to the people of Windsor — I was down there with the prime minister — now they need to keep their promise to the people in Windsor.”
Champagne said the company approached Ottawa after the IRA became law in August 2022, and agreed to speak with them “in the spirit of fairness.” He said the government was open to doing so to remain competitive with the United States, adding he hopes to meet with the head of LG Energy Solution Wednesday.
“Trust me, it’s very difficult to attract these investments. We fought very hard for them to invest in Canada and we certainly want them to continue making investments, and now is the time for our friends in Ontario to pay their fair share,” Champagne said.
“When we say pay their fair share is to make sure that they would be with us in terms of production support.… These plants are there for probably 50 to 100 years, so there’s going to be a lot of economic benefits to the people in Ontario, and that’s why we think it’s only fair in the federation that the province would pay their fair share when it comes to these strategic investments.”
However, Ontario Economic Development Minister Vic Fedeli said Monday that matching what the U.S. can offer is “out of our league.”
“We’re involved in the capital dollars for Stellantis — so have the feds, by the way, as we’ve been partners, almost 50-50 partners all the way down the line,” he said.
“But on the operating expense, this IRA that the federal government and the States have, this is up to the federal government to match. They have made commitments to Volkswagen, they have made commitments to Stellantis and we expect them to honour those commitments.”
Meanwhile, the president of Canada’s largest private-sector union also urged Ottawa on Monday to resolve the Stellantis dispute immediately.
“It’s outrageous that tens of thousands of jobs are in jeopardy due to a failure to come to terms on government investment,” Unifor national president Lana Payne said in a statement, adding that companies like Stellantis “don’t make threats, they make decisions.”
“Once those decisions get to a certain point down the road they are very hard to reverse and we cannot afford to let these jobs slip through our fingers.”
The Canadian Taxpayers’ Federation said Monday that the government should reject Stellantis’s demands.
“If you hand out billions of dollars in taxpayer cash to one auto company, of course the others will follow,” CTF Ontario director Jay Goldberg said in a statement.
“Taxpayers can’t afford to throw money at every company under the sun and Ottawa needs to say no before it wastes billions more.”
Ford’s pleas to the federal government follow one from the mayor of Windsor, who urged Ottawa over the weekend to get a deal done.
— with files from The Canadian Press
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