Federal government will break even in 20 years on its $28.2B EV plant subsidies: report
CBC
It will take 20 years for the federal government to break even on its pledge to give $28.2 billion in production subsidies to automotive plants in St. Thomas and Windsor.
That's according to a new report released Tuesday morning from the Parliamentary Budget Officer (PBO).
The report says it will be 2043 before the Stellantis-LGES EV battery plant in Windsor, and the Volkswagen plant in St. Thomas, generate enough federal and provincial tax revenue to total the subsidies.
"The break-even timeline for the $28.2 billion in production subsidies announced for Stellantis-LGES and Volkswagen is estimated to be 20 years, significantly longer than the Government's estimate of a payback within five years for Volkswagen," PBO Yves Giroux said in a media release.
Ottawa committed in the spring to give Volksagen up to $13 billion in subsidies over the next 10 years to secure the battery plant in St. Thomas. That plant will be the size of 391 football fields and bring auto jobs to the region.
Meanwhile, Stellantis-LG halted construction on a Windsor plant this summer unless the provincial and federal governments came through with more than the initial investment of $500 million. Construction resumed after the federal and provincial government announced up to $15 billion in subsidies.
That plant is expected to open in 2024 and employ about 2,500 people.
Ottawa will cover two-thirds of the subsidies, or $18.8 billion combined, for Stellantis-LGES and Volkswagen, and Ontario will provide $9.4 billion.
Ontario hasn't announced a break-even timeline for the Windsor plant, the report says.
More to come.
This story is a collaboration between the Investigative Journalism Foundation and CBC Saskatchewan.
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