Federal subsidies for electric vehicle manufacturers now total $32 billion, which is more than twice the annual output of the entire Canadian automobile sector.
Cabinet has approved a $322 million subsidy to Ford and its two South Korean business partners to make electric battery parts in Becancour, Quebec. On top of the federal subsidy, Ford and its associates—South Korea’s EcoPro BM and SK On Co.—will get a $322 million “partially forgivable loan” from the Quebec government, according to Blacklock’s Reporter.
Ford also received a $295 million subsidy in 2020 to build electric cars at an existing plant in Oakville, Ontario.
Since April, cabinet has approved $16.3 billion in subsidies to Volkswagen to build an electric battery plant in St. Thomas, Ontario. Another $15 billion was awarded to Stellantis to operate battery factories in Windsor and Brampton, Ontario. Total industry subsidies amount to almost $32 billion.
Ottawa maintains that all costs will be recovered, but no figures confirming that forecast have been provided.
In May, the deputy minister of the industry department, Simon Kennedy, told the Senate Banking Committee that cabinet had little choice but to subsidize the electric vehicle (EV) industry.
“The argument is this is an entire industry,” Mr. Kennedy told the committee.
“If Canada is not able to successfully make that transition, not just the handful of companies that make the cars will arguably disappear, but the entire cluster will disappear, which is hundreds of thousands of jobs.”
He pointed to Canadian companies like Magna, Martinrea, and Linamar that supply parts to vehicle manufacturers.
The plant in Becancour will produce about 45,000 tonnes per year of cathode active materials for use in batteries for Ford’s EV manufacturing. The total value of the project is around $1.2 billion.
The zone will focus on the battery industry, transport electrification, hydrogen, and industrial-port decarbonization.
