Industry Minister Addresses PBO Report Findings on Subsidies for EV Plants
The Parliamentary Budget Officer estimated that it would take 20 years for the government to break even on its electric vehicle (EV) battery plant subsidies. In response, Industry Minister François-Philippe Champagne stated that the long-term economic benefits of the deal would outweigh the initial costs. Champagne emphasized that the investments would generate revenue, leading to a $400 billion economic impact to Canada over 30 years. He also highlighted that the VW plant, which is set to open in 2027, would have a significant impact on job creation and the country’s economy as a whole. Additionally, the report examined the subsidies granted to VW and Stellantis-LGES EV battery plants, amounting to $13.2 billion and $15 billion respectively. The federal and Ontario governments entered a cost-sharing agreement, with the federal government covering two-thirds of production subsidies. The report by the Parliamentary Budget Officer concluded that it would take 20 years for the governments to break even on the subsidies provided. However, Champagne argued that the payback period would be shorter when considering the full impact of the ecosystem. He emphasized that subsidies are dependent on production and cited a separate report that revealed Ottawa’s subsidy to VW amounted to $16.3 billion when considering tax compensation.
