Parliamentary Budget Officer (PBO) Yves Giroux says his office is probing the federal government’s $13.8 billion deal with Volkswagen made to incentivize the European automaking giant to build its first overseas battery cell plant in Ontario.
Giroux told The Epoch Times that his office began analyzing the expensive deal near the end of April and is aiming to publish it at the end of Parliament’s spring session, scheduled to conclude on June 23.
The budget officer said he began his analysis after, but not in response to, Conservative Leader Pierre Poilievre calling on him to do so in
late April.
“We had planned to start a study of the VW deal before Mr. Poilievre asked for it but had not started it formally,” Giroux said.
The government announced on
March 13 that PowerCo, a subsidiary company of Volkswagen, would be building Volkswagen’s first overseas battery cell plant in St. Thomas, Ontario.
Over a month later, Industry Minister François-Philippe Champagne
confirmed that Ottawa committed between $8 and $13.2 billion in subsidies and a $700 million grant to incentivize Volkswagen to build the battery factory in Canada.
Prime Minister Justin Trudeau
said in late April that other countries, including the United States, were willing to offer “an awful lot of money” for Volkswagen’s plant, which is
estimated to produce batteries for up to 1 million electric vehicles per year following its completion in 2027, while creating 3,000 direct jobs and 30,000 indirect jobs.
“Everyone wanted this, so yes, we put up a lot of money—money that’s going to come back in investments in economic activity very quickly,” Trudeau
said on April 21.
Giroux said the federal Industry Department has been forthcoming thus far with all requested information about the deal.
“We may need clarifications as we progress, but don’t anticipate issues from that perspective,” he said.
VW Deal
The House of Commons Standing Committee on Industry and Technology voted on April 24 to hold a
one-meeting study of the Volkswagen deal in which Champagne would appear and the MPs would have access to unredacted copies of the contract with Volkswagen.
However, the committee’s motion was
amended before passing to make the meeting open only to MPs and relevant staff without any recording devices and also to give committee members only limited access to copies of the contract, of which they were not allowed to take notes or pictures.
In two separate letters, the PBO requested “information related” to the government’s deal with Volkswagen on
April 28 and
May 1 from the Departments of Finance and Industry, respectively.
Giroux wrote a
letter on April 28 to Finance Minister Chrystia Freeland asking that her office send the government’s “methodology and assumptions used for the fiscal forecast of the subsidy, including assumptions regarding production capacity and production levels of the facility” by no later than May 12.
Giroux also requested “details on the legislative funding mechanism of the subsidy.”
On May 12, Freeland’s assistant deputy minister Glenn Purves sent a
response letter saying the finance department had already sent Giroux the relevant information for his analysis of Budget 2023 and offered to meet with the PBO in person to provide “additional clarity and detail.”
In Giroux’s
letter to the Department of Industry on May 1, he requested the government’s contract with Volkswagen, along with “details regarding the data, methodology and assumptions around” the industry department’s calculations of the Volkswagen plant’s economic impact and job creation.
Champagne sent Giroux a
response letter shortly after saying the government “is pleased to make available” its agreements with Volkswagen along with the materials it used to “inform the estimates of the economic impact of this battery manufacturing investment.”
Champagne added in the letter that the documents provided contained “protected information that is commercially sensitive” and asked that the PBO “not release the data publicly or share it outside of your organization.”
Matthew Horwood contributed to this report.
