Ottawa presents Windsor, Ont., EV battery plant offer to Stellantis and LG | CBC News

Ottawa has provided Stellantis and LG Energy Solution with an offer concerning the electric vehicle (EV) battery plant in Windsor, Ont.

Prime Minister Justin Trudeau said it’s an offer that’s respectful to taxpayers.

“Mostly it’s one that is reasonable to create great jobs for the future for generations to come to secure a future in communities across southern Ontario and to ensure that Canada is fully contributing to the net-zero world that is going to rely on,” he said.

In an email to CBC News, Stellantis spokesperson LouAnn Gosselin confirmed, “Stellantis and LGES are in receipt of a written offer that is currently under financial and legal review.

“We have nothing further to add at this time.”

François-Philippe Champagne, Canada’s innovation and industry minister, said the offer indicates significant progress has been made, but wouldn’t say if it was the government’s final offer.

“It would not be smart for me to negotiate in public — these things are complex,” he said.

Champagne said he expects an answer from Stellantis and LG “shortly,” and Canadians shouldn’t be surprised by what’s on the table and being offered.

“We said that in the fall economic statement that would be levelling the playing field with the U.S. when it comes to the IRA [Inflation Reduction Act]. But I think also Canadians, and the unions and people understand those are generational opportunities.”

It’s been more than three weeks since we learned the future of the EV battery plant being built in Windsor was in jeopardy. At that time, Stellantis moved to “contingency plans,” saying the federal government wasn’t honouring its agreement. That’s when the automaker stopped most of its construction at the site.

Canada’s financial package with another automaker, Volkswagen, which plans to open a massive factory in St. Thomas, Ont., was believed to be connected to the impasse, according to industry experts, as was new U.S. legislation that enables unprecedented incentive offers for companies — something Canada could have difficulty matching.

Premier Doug Ford recently said Ontario would be contributing one-third of the cost to secure a deal, but exactly how much the province would be chipping in wouldn’t be made public until after a deal is signed. 

South Korean battery maker LG Energy Solution and Stellantis announced the $5-billion project last year, and said it was expected to create 2,500 jobs and open sometime in 2024.

Ahead of the tentative deal, and despite saying it wasn’t an ideal use of federal and Ontario tax dollars, Carleton University business professor Ian Lee said he figured an agreement would eventually be reached because of “politics” and “optics” surrounding Windsor’s manufacturing history.

“It’s so seductive for a politician, for a leader to say to stand up before the microphones at those announcements … and say, ‘I am here to save you, I am producing. I am going to sign billions of dollars to make sure that you are saved,'” Lee told CBC News.

WATCH | U.S. economy and new incentives put Canada at disadvantage in Stellantis negotiations, prof says:

U.S. economy and new incentives put Canada at disadvantage in Stellantis negotiations, professor says

Two weeks of negotiations between the federal and provincial governments and Stellantis have failed to produce a new deal for the NextStar EV battery plant in Windsor, Ont. Ian Lee, an associate professor at Carleton University’s Sprott School of Business, says the economic might of the U.S., coupled with the incentives offered in recent legislation, make it extremely challenging for Canada to compete.

Lee said the country’s unemployment level is the lowest it’s been since the 1960s, and said  the idea Ontario is desperate to create new jobs is “nonsense,” adding it would be “robbing Peter to pay Paul” as the province is already seeing a critical shortage of workers.

“What’s going to happen is these companies are going to be — they’re not going to admit this publicly — but they’re going to be poaching and robbing and soliciting skilled employees from other companies nearby because they need the workers to work there.”