Quebec loses $270M in Northvolt bankruptcy, Ottawa avoids financial loss

March 31, 2025 TruthUSA

The federal government states that it did not incur any losses when Swedish battery manufacturer Northvolt filed for bankruptcy. However, the Quebec government reports a loss of $270 million in the deal, while Quebec’s pension fund manager indicates a loss of $200 million.

In September 2023, Ottawa and Quebec had announced their support for Northvolt to construct a mega factory in the Montreal region to establish the province as a significant player in the electric vehicle supply chain.

The parent company of Northvolt AB filed for bankruptcy in Sweden, leading to decisions about its Canadian subsidiary being made by a court-appointed trustee and lenders.

“Innovation, Science and Economic Development Canada (ISED) has no agreements with Northvolt, and the Government of Canada has not provided any financial support to the company,” stated ISED spokesperson André Daigle.

Daigle added that since Ottawa did not disburse any funds to Northvolt, ISED will not be involved in the company’s financial restructuring process.

The Prime Minister’s Office announced in 2023 that the federal government would commit up to $1.34 billion to the battery plant project.

Ottawa and Quebec had also pledged production incentives of up to $4.6 billion. When questioned about why Ottawa did not suffer any financial losses in the Northvolt deal, an ISED spokesperson declined to provide further comments.

“Our initial statement stands, and we have nothing more to add,” stated the department.

Former Industry Minister François-Philippe Champagne stated in mid-March that Ottawa was exploring potential parties interested in taking on the Northvolt factory project in Saint-Basile-le-Grand, Quebec, covering an area equivalent to 318 football fields. Champagne, now serving as finance minister, emphasized that China would not be involved in the project.

While Ottawa asserts that it did not incur any financial losses in the project, Quebec’s financial losses are apparent.

“We consider this amount to be a loss,” stated Christine Fréchette, Quebec’s Minister of Economy, Innovation, and Energy, referring to Quebec’s $270 million investment.

An additional $240 million provided to Northvolt for land acquisition is secured by assets and security interests of Northvolt’s subsidiary, as per Fréchette.

Quebec’s pension fund manager, the Caisse de dépot et placement du Québec (CDPQ), also confirmed a $200 million loss in the deal.

“This investment has been written off,” stated CDPQ spokesperson Jean-Benoît Houde. “However, we are monitoring the situation closely in Quebec.”

Concerns about the future of Northvolt’s Quebec project arose last summer when the company announced a strategic review of its expansion plans. The electric vehicle industry has encountered challenges, with automakers reducing investments due to decreased demand.

Over recent years, Ottawa, Quebec, and Ontario have made substantial investments in various projects to attract manufacturers, including Northvolt, Volkswagen, and a joint venture between Stellantis and LG Energy Solution.

In late 2023, the federal government aimed to provide production incentives totaling $21.9 billion to these three companies, aligning with subsidies offered by the U.S. government during the administration of then-President Joe Biden.

Following his inauguration, U.S. President Donald Trump issued an executive order to assess eliminating subsidies that favored electric vehicles over other technologies.

The Canadian Press contributed to this report.

Source link