Friday, Industry Minister François-Philippe Champagne discussed the latest updates on the federal government’s bid to keep automaker Stellantis from pulling out of building NextStar Energy, an electric-vehicle (EV) battery plant in Windsor, Ontario.
Champagne commented on the deal as he concluded his two-day visit in Washington, D.C., where he took part in the first-ever North American semiconductor conference.
“We’re making progress,” Champagne stated, adding he had a two-hour dinner with the president of LG Energy Solutions, Kwon Young Soo, during a visit to Seoul last week, and that the government is edging closer to finalizing the deal and getting things back on track again.
Last year, LG Energy Solutions and Stellantis announced a joint investment of C$5 billion to build the first large scale lithium-ion battery production plant in Canada.
But in recent days, construction stopped because the federal government is allegedly hesitant in signing a final funding agreement for the project and is failing to match production subsidies offered in the U.S, a Stellantis spokesperson confirmed to the Globe and Mail.
Ontario and Canada pledged to offer C$500 million each to Stellantis for capital costs. Ontario Premier Doug Ford said on Monday that his government fulfilled its promise and that the federal government should do the same.
However, Champagne said that the funding had to be renegotiated to match the higher production subsidies offered under the Inflation Reduction Act (IRA) passed in August last year. The new U.S. law offered companies production tax credits of up to US$35 per kilowatt hour in each battery produced.
But money is not the reason why Canada wins, Champagne contended, as he sought to reassure questioners that the deal is still alive. He explained that Canada wins because of the Canadian workers and, he added, because of “the fact we have renewable energy, critical minerals, proximity to market and the assembly line.”
He went on to affirm that the president of LG Energy Solutions said “there’s a lot of things going on for Canada and that “we [Canadians] know how to negotiate, we know how to get a good deal for Canadians, for our workers, for our industry. And, years from now we’ll look back and we say all yes, that was all part of negotiation.”
Ford skipped the talks, and said on the same day that the province is offering more money to keep the project running.
“This is all about saving jobs, and giving people the quality of life they deserve in southwestern Ontario.”
These comments, Champagne said, indicate progress, and he maintained that there will be an agreement.