Canadians will not find out details about the multi-billion-dollar subsidy promised to Volkswagen Canada for a battery plant in Ontario until after the money goes to the European automaker.
The Senate national finance committee was told April 25 that the Department of Industry would not discuss the $13 billion subsidy for the St. Thomas, Ontario, electric vehicle battery cell factory, according to Blacklock’s Reporter.
“The agreement is not public,” said Jean-Philippe Lapointe, director general of Industry Canada, in testimony before the committee.
“It is a confidential agreement between the Government of Canada and the company, but through proactive disclosure at one point in time we are able to disclose expenditures that have been covered under contribution agreements.”
According to Lapointe, the federal government monitors the “spending of the recipients.”
“When we see the expenditures aren’t happening—you see, companies have to claim for their expenditures and then they are reimbursed,” he said.
“Within a specific project like the one you have mentioned, we obviously have a contribution agreement. There are conditions regarding the timeline of the project, the period of time for claiming expenditures, and the period of time for reimbursing those expenditures.”
Quebec Sen. Éric Forest asked if the government could specify the timeline involved. “So you have a timeline? Is that public? Can we have access to that?” Forest asked. He didn’t receive an answer.
“This is a major investment. We’re talking about funding to produce batteries for Volkswagen,” said Forest.
The plant is estimated to be on the receiving end of $13.2 to $13.7 billion in federal subsidies, in addition to $500 million from the province of Ontario.
Questions
During a review of a budget document entitled “Main Estimates,” senators had more questions about the financing being provided to Volkswagen.
“I want to ask about the $13 billion for the Volkswagen deal. Is any of that money in your ‘Main Estimates’?” asked Newfoundland and Labrador Sen. Elizabeth Marshall.
James Burns, senior policy director at Industry Canada, responded, “Unfortunately I am not in a position to answer that question.”
“You don’t have any information on it at all?” asked Marshall.
Burns replied, “At this point in time I don’t have any information on that.”
The senator said: “I am just trying to get an impact of what that $13 billion is going to be on the government’s deficit. If the budget projects over five years, I would think the money is in there. But if it’s not, it is going to have a big impact on the deficit and that’s what I am trying to find out.”
The Trudeau Liberals claim taxpayers will recoup the subsidies within five years of the factory’s opening in 2027. There was no further explanation provided.
