Finance Minister Chrystia Freeland awarded a $2.1 billion tax break to electric vehicle battery manufacturers receiving billions in subsidies, according to Blacklock’s Reporter. “There are no other stakeholders to consult,” said Freeland in a legal notice. Only the companies were told of the 10-year tax holiday. Amendments to the Income Tax Act Regulations granted the decade-long waiver on production subsidies for battery factories. “The cost of foregone federal tax revenue associated with the regulatory amendment is estimated to be about $2.1 billion over ten years starting in 2024, which is the estimated amount of federal corporate income tax otherwise payable by the recipients,” said the Canadian government. With production subsidies, the Canadian government said they “would in the absence of a regulatory amendment be subject to income tax under the Income Tax Act.” “The Government of Canada is contractually obligated to provide support on a tax-neutral basis,” it said. Freeland did not comment. However, she said at a press scrum in June that the Canadian government had to be at the table when it came to providing billions in subsidies to Volkswagen, Ford Motors, Stellantis and other EV companies. “We were just not, as a government, going to tolerate a situation in which investment was sucked out of Canada, sucked to south of the border and I don’t think Canadian workers should tolerate that situation,” she said. The Parliamentary Budget Office (PBO) said in a report in November the ongoing cost of subsidies for EV battery manufacturers was $50.2 billion. This figure is triple the annual economic output of Canada’s entire auto sector of $16 billion by official estimate. “Our estimates of the break-even timelines for the production subsidies are based on several optimistic assumptions,” said the PBO. “It is certainly possible that break-even timelines for the production subsidies exceed our estimates.”Cabinet has subsidized a proposed Volkswagen battery factory in St. Thomas, ON; two Stellantis battery plants in Windsor, ON, and Brampton, ON; a Northvolt factory in Sainte-Basile-le-Grande, QC; a Ford battery parts factory in Becancour, QC; and an E-One Moli lithium battery plant in Maple Ridge, BC. Cabinet has disputed PBO figures as inaccurate. Parliamentary Budget Officer Yves Giroux said at a House of Commons Industry Committee hearing in October he stood by his data. “As soon as we publish a report that sets the record straight, there are accusations we have not understood the problem or have a bone to pick,” said Giroux. “That’s not the case.”Liberal MPs on the House of Commons Government Operations Committee (CGOC) said in November they were against making federal contracts with EV battery makers public.READ MORE: Liberals blocked releasing multi-billion dollar electric vehicle subsidy contractsThe Conservatives requested the CGOC investigate if taxpayer money was being used to support workers from other countries.“It is important we maintain the confidentiality of these contracts in enabling us to continue to attract these investments,” said Liberal MP Charles Sousa (Mississauga-Lakeshore, ON).
Finance Minister Chrystia Freeland awarded a $2.1 billion tax break to electric vehicle battery manufacturers receiving billions in subsidies, according to Blacklock’s Reporter. “There are no other stakeholders to consult,” said Freeland in a legal notice. Only the companies were told of the 10-year tax holiday. Amendments to the Income Tax Act Regulations granted the decade-long waiver on production subsidies for battery factories. “The cost of foregone federal tax revenue associated with the regulatory amendment is estimated to be about $2.1 billion over ten years starting in 2024, which is the estimated amount of federal corporate income tax otherwise payable by the recipients,” said the Canadian government. With production subsidies, the Canadian government said they “would in the absence of a regulatory amendment be subject to income tax under the Income Tax Act.” “The Government of Canada is contractually obligated to provide support on a tax-neutral basis,” it said. Freeland did not comment. However, she said at a press scrum in June that the Canadian government had to be at the table when it came to providing billions in subsidies to Volkswagen, Ford Motors, Stellantis and other EV companies. “We were just not, as a government, going to tolerate a situation in which investment was sucked out of Canada, sucked to south of the border and I don’t think Canadian workers should tolerate that situation,” she said. The Parliamentary Budget Office (PBO) said in a report in November the ongoing cost of subsidies for EV battery manufacturers was $50.2 billion. This figure is triple the annual economic output of Canada’s entire auto sector of $16 billion by official estimate. “Our estimates of the break-even timelines for the production subsidies are based on several optimistic assumptions,” said the PBO. “It is certainly possible that break-even timelines for the production subsidies exceed our estimates.”Cabinet has subsidized a proposed Volkswagen battery factory in St. Thomas, ON; two Stellantis battery plants in Windsor, ON, and Brampton, ON; a Northvolt factory in Sainte-Basile-le-Grande, QC; a Ford battery parts factory in Becancour, QC; and an E-One Moli lithium battery plant in Maple Ridge, BC. Cabinet has disputed PBO figures as inaccurate. Parliamentary Budget Officer Yves Giroux said at a House of Commons Industry Committee hearing in October he stood by his data. “As soon as we publish a report that sets the record straight, there are accusations we have not understood the problem or have a bone to pick,” said Giroux. “That’s not the case.”Liberal MPs on the House of Commons Government Operations Committee (CGOC) said in November they were against making federal contracts with EV battery makers public.READ MORE: Liberals blocked releasing multi-billion dollar electric vehicle subsidy contractsThe Conservatives requested the CGOC investigate if taxpayer money was being used to support workers from other countries.“It is important we maintain the confidentiality of these contracts in enabling us to continue to attract these investments,” said Liberal MP Charles Sousa (Mississauga-Lakeshore, ON).
