Canada has a unique opportunity with substantial subsidies for electric vehicle (EV) batteries, according to a briefing note from Industry Minister François-Philippe Champagne's department.. Volkswagen EV plantArtis rendition of Volkswagen EV plant in St. Thomas ON. .According to Blacklock’s Reporter, the note stated that the subsidies for one Volkswagen battery plant are equivalent to the entire production of Canada's auto sector last year..“Canada is in the driver seat with investments that have been secured across the electric vehicle supply chain that will benefit all Canadians,” said the note Automotive Industry Zero Emission Vehicles. .“Canada’s continued strength in automotive production is a key pillar in building a resilient, prosperous and healthy future for Canadians.”.The entire auto sector “contributed $16 billion in 2022 to Canada’s gross domestic product,” said the note. .According to a report by the Parliamentary Budget Office on June 14, the subsidies given to Volkswagen Canada for their battery factory in St. Thomas, ON, amount to $16.3 billion. The report is called The Fiscal Analysis of Canada's Support for Volkswagen's Electric Vehicle Battery Manufacturing Plant..“As the North American automotive sector pivots to the production of zero-emission vehicles, battery manufacturing investments will be a critical component of the new value chains,” said the briefing note. .“Investments building Canada’s capacity in battery production will have significant benefits for Canadian workers.”.On July 6, the Cabinet approved an additional $15 billion in subsidies for Stellantis battery factories located in Windsor and Brampton, ON..“Overall, Ontario is the second largest automotive manufacturing jurisdiction in North America,” said the note..Champagne has said taxpayers will get back all the $31.3 billion spent on three battery plants. However, there has not been any public information released to confirm this claim..“This is a game changer for the nation,” Champagne told reporters on April 20..“Five years, that’s the payback,” said Champagne. .“That’s a very good investment. Talk to any banker, 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 for Canadians.”.The industry department later dropped the “100 years” claim. The battery factories are “expected to last dozens of years,” Deputy Industry Minister Simon Kennedy testified on May 5 at the Senate Banking committee..EVs make up only 5% of the total number of cars on the road. In a 2021 briefing note from the department of Natural Resources, they were described as impractical..“While an accelerated plan to shift entirely to green energy net zero emissions is appealing, it is not realistic at this time for the majority of (the department’s) fleet,” said the note. .“Advancement in the automotive technology is not readily available for all operational requirements.”.EVs posed challenges with “restrictive range capabilities,” “lack of access to public charging infrastructure in most of Canada” and “lack of access to repair networks,” said the briefing note Fleet Management Renewal Strategy: Information for the Deputy Minister’s Office.
