Industry Deputy Minister Simon Kennedy said the Volkswagen (VW) battery factory is expected to operate for “dozens of years” when asked about the Trudeau government's $13.7 billion in subsidies.. Francois-Philippe Champagne .Industry Minister Francois-Philippe Champagne had previously estimated that the VW battery factory would have a lifespan of 100 years..Kennedy did not explain the difference in the predicted lifespan of the VW battery factory compared to the earlier estimate Champagne gave..“This facility is expected to last dozens of years,” Kennedy testified at the Senate Banking committee..“The facility will take a number of years to construct.”.“There will be this period — again, some of this is contingent as to how long it will take to build and so on — but there will be this period of six or seven years or so where support will be provided by government,” said Kennedy..“The facility is expected to last many years beyond that.”.The St. Thomas, ON, factory is scheduled for construction by 2027..In awarding VW some $13.7 billion in federal subsidies for the plant, Champagne predicted on April 20 that it “is going to be there for 100 years.”.“Talk to any banker,” said Champagne..“He would say if you get your money in five years for a plant that’s going to be there for 100 years, that’s a pretty good deal.”.“The company is planning to be here for a hundred years,” Champagne repeated on April 21..According to Blacklock’s Reporter, the cabinet has refused to release the text of its contract with VW or explain the payback claims within five years..Kennedy told the Banking committee that the cabinet feared losing the entire Canadian automotive industry if it did not subsidize an electric battery plant..“The entire automotive supply chain and industry are rapidly moving to battery electric vehicles,” said Kennedy..“If Canada is not able to successfully make that transition, not just the handful of companies that make the cars will arguably disappear, but the entire cluster will disappear, which is hundreds of thousands of jobs,” said Kennedy..“A central argument in favour of supporting a firm such as Volkswagen in establishing a battery facility would be something like this: Canada has a significant automotive cluster anchored by a relatively small handful of firms and those firms, it’s true, employ a lot of people,” said Kennedy.. Volkswagen Electric Car .“Those firms are really anchor facilities for a much broader ecosystem including hundreds of Canadian companies, firms like Magna, Martinrea, Linamar and so on that are substantial parts suppliers,” said Kennedy..“If you think of the traditional shopping mall with hundreds of stores in it, in the old days, it was traditionally anchored by three or four large department stores.”.“The argument is not just you’re going to put this plant here and it’s going to create ‘x’ jobs,” said Kennedy..“The argument is this is an entire industry.”.“If we don’t have the capacity to make the single most important component of the vehicle in Canada, because the battery is up to 40% of the value of the vehicle, if all of those facilities are somewhere else, is that a challenge?” said Kennedy..Currently, 5% of cars on Canadian roads are electric..Subsidies for the lone VW factory represent almost three times the annual value of all federal subsidies for all corporations in Canada, an average of $5.5 billion a year, according to the Industry department.
