National Post (National Edition)
PM, FORD ANNOUNCE $1B-PLUS TO RETOOL PLANTS
Feds, Ontario pitch in funds to shift to electric
• The federal and Ontario governments announced on Monday that more than $1 billion of taxpayer funding would be going into two Ontario auto plants, part of a $3.6-billion investment from industry giant Stellantis.
Stellantis, which produces Chrysler, Dodge and Jeep vehicles along with many European brands, will build a new battery research facility in Windsor, Ont., as part of the deal and will update the Windsor Assembly plant, as well as its assembly plant in Brampton, Ont., to make electric vehicles.
The company's North American COO, Mark Stewart, said the company wants to make a clear commitment to Canada: “We hope today's announcement really helps bring assurance to our families, to our employees, and the local community that we are committed to Canada for the long run and for the next 100 years.”
The announcement comes just over a month after a major announcement of a new battery plant in Windsor and amid a broader retooling of auto plants across North America to electric platforms.
Flavio Volpe, president of the Automotive Parts Manufacturers' Association of Canada, said the latest news means Canada isn't going to lose huge numbers of auto jobs as electrification takes place.
“Every major assembler in Canada has committed to electric platforms in their Canadian plants,” he said.
Volpe said the government dollars are felt beyond Stellantis's plants.
“Any one of these plants might have 3,000 direct employees but they probably support 10,000 to 12,000 parts suppliers' employees and so it's extremely important for current suppliers to see that every single plant in Canada has a line of sight on electrifying future products.”
The deal will see the federal government spend $529 million and Ontario put in $513 million.
Prime Minister Justin Trudeau said the investments in electric-car manufacturing demonstrate that all workers can have a future in a greener economy.
“There's place for Windsor autoworkers. There's place for energy workers across the country. There are good careers and good opportunities even as we build a stronger and more thoughtful future that both grows the economy and protects the environment,” he said.
Ontario Premier Doug Ford, who is just days from the beginning of an election, said it was his government's competitive business environment that was ensuring companies stayed in Ontario and continued to make major investments.
“Previous governments may have given up on Ontario's manufacturing sector and watched from the sidelines as 300,000 jobs left this province. Our government is bringing good jobs back to Ontario's workers,” he said.
Trudeau was asked why he was making the announcement, a political boost for Ford, so close to the campaign and said the deal had been in the works for months.
“This is good news that I know the people of Windsor wouldn't wanted to have waited a day longer for,” he said.
In last month's budget, the federal government expanded access to an electric-vehicle tax credit. Previously to qualify for a credit of up to $5,000, vehicles needed an all-in-price of less than $55,000, but they can now qualify as long as the base model price is below $55,000 even if the model bought costs up to $65,000.
The government also added a new category for minivans and trucks, allowing a credit for electric vehicles and hybrids with a base model price of $60,000, while also allowing an additional $10,000 to account for addons and trim options.
B.C. and Quebec have additional provincial tax credits, but Ford scrapped a similar program in Ontario. Trudeau said it's clear provincial credits have an impact on adoption, but provinces should make their own choices.
Ford said his government felt it was right to invest in autoworkers and plants rather than incentives. “We decided to invest into the people. We put billions of dollars into investments in the manufacturing of batteries. We put in billions of dollars, partnering with the federal government, in the people and when you invest in the people, everyone else benefits.”
The EV tax credit is funded out until 2025 or until the program runs out of funds. Volpe said he suspects it will be less and less important, as manufacturers make more EVs, further narrowing the price gap between electric vehicles and combustion engines. “They'll be decreasingly important over the course of the next five to 10 years.”
One of the biggest challenges for buying an EV vehicle now is availability with dealers reporting long wait lists, due in large part to a global shortage of semiconductor chips.
Stewart said Canadian plants had been prioritized for chips to keep manufacturing, because of the productivity of the plants.
“They're getting an allocation of chips in a land of precious few chips to be able to do that,” he said.
Volpe said he expects the chip shortage will extend into next year, but should begin to ease up beginning this summer.