Champagne says Ontario needs to ‘pay fair share’ to end ‘stalemate’ with Stellantis | CBC News

Innovation Minister François-Philippe Champagne is calling on Doug Ford’s Ontario government to pay its “fair share” of subsidies in order to break the “stalemate” that saw Stellantis halt construction of its electric vehicle battery plant in Windsor, Ont., this week. 

Stellantis said it stopped construction on a portion of the plant because the federal government had not delivered on what it promised and would move to “contingency plans” should Ottawa not fulfil its negotiation commitments.

“The message to our colleagues in Ontario is: ‘pay your fair share and we will bring this stalemate, if you want, to a conclusion,'” Champagne told reporters in Seoul, Korea on Tuesday.

Champagne, Foreign Affairs Minister Mélanie Joly and Prime Minister Justin Trudeau are in Korea ahead of the G7 leaders’ summit in Hiroshima, Japan, on May 19 and 21.

Trudeau is meeting with South Korean President Yoon Suk Yeol to discuss economic security, but It remains unclear whether the prime minister will also talk to executives of South Korean-owned LG and its partner Stellantis over the NextStar Energy investment in Windsor, Ont.

Champagne said he is there to reassure Korean partners that the Liberal government is optimistic that the investment will move forward but that Ontario has to stump up cash to make that happen.

“I’m very confident that we’ll come to an agreement with LG and Stellantis,” he said. “I think that Canadians want us to reach a good deal for the autoworkers, for the auto industry and for Canadians in general.

“What we are at, a crossroads now, is that we need our friends and partners in Ontario to pay their fair share as they have always done in every transaction we have done.”

Watch: Minister ‘very confident’ government will reach deal with LG and Stellantis:

Minister ‘very confident’ government will reach deal with LG and Stellantis

Minister of Innovation, Science and Industry François-Philippe Champagne discusses the federal government’s efforts to reach a deal with the automaker Stellantis and South Korean battery-maker LG Energy Solution after Stellantis stopped construction on a portion of an electric vehicle battery plant in Windsor, Ont.

Champagne said he hopes to speak with the head of LG at a state dinner hosted by South Korea’s president and underlined that negotiations are still ongoing.

“I negotiate with these guys every day,” he said. “The CEO calls me every day, they text me every day. There’s negotiation, that’s fair. But my job and our job is to fight for Canadians. That’s why I’m paid for — it’s the fight for Canadians; to fight for the public interest.”

The U.S. Inflation Reduction Act

The automaker — which makes Chrysler, Ram and Fiat cars among others — and South Korean battery-maker LG Energy Solution announced the $5-billion plant last year and said it was expected to create 2,500 jobs.

The plant is due to open next year. Ottawa’s contribution was to be about $500 million. Recently passed U.S. legislation is complicating the deal. 

The U.S. Inflation Reduction Act (IRA) introduced by the U.S. is a multi-billion dollar program aimed at boosting the American manufacturing sector by boosting the clean energy technology supply chain.

Champagne explained Tuesday that because the Windsor deal was announced before the IRA was in place, it did not contain an agreement to subsidize production at the plant in the same way the $13 billion Volkswagen deal does.

“When we started with Volkswagen the IRA was already in place,” he said. “When [Stellantis] came to us, I think in good faith, we sat down with them and said: ‘we hear you’ … now we’re saying to our provincial friends in Ontario: ‘be with us as you have always done.'”

Champagne said plants like the ones being built by Volkswagen and Stellantis will remain in operation for 50 to 100 years, providing economic benefits to the province for generations. 

“That’s why we think it’s only fair, in a federation, that the province would pay their fair share when it comes to these strategic investments.” 

According to details of the deal with Volkswagen, federal production support for the plant is expected to range from $8 billion to $13 billion over 10 years. Ottawa is also offering about $700 million in capital expense grants to Volkswagen through its Strategic Innovation Fund.

Canada’s production subsidies will stay in place only as long as the U.S. Inflation Reduction Act remains in force. Production subsidies will come into effect after the company builds the $7 billion plant and begins production.