Taxpayers Group Slams $15 Billion Tax Break for EV Battery Plant

The Canadian Taxpayers Federation has voiced its concern over the $15-billion agreement that ensures the continuation of an electric vehicle (EV) battery plant in Windsor, Ontario.

Franco Terrazzano, the federation’s federal director, described the deal as “massively expensive for taxpayers,” and criticized the government for favoring multinational corporations over taxpayers, reports CBC News.

The agreement, announced on Wednesday, involves Stellantis and LG Energy Solution and is set to secure the future of the NextStar EV battery plant in Windsor. Victor Fedeli, Ontario’s Minister of Economic Development, Job Creation and Trade, revealed that the province would provide up to $5 billion in tax breaks over a 10-year term based on production. The remaining $10 billion in tax breaks would come from the federal government.

However, Terrazzano expressed concern about the potential implications of this deal on future negotiations with other large corporations. “Taxpayers have to be worried about the precedent that this sets,” he said, questioning the potential for other corporations to secure similar deals.

Despite the criticism, others view the deal as a unique opportunity for Canada to establish its position in the EV industry. The agreement comes after Stellantis paused construction on the module portion of its EV battery facility in May, citing unfulfilled promises from the federal government in negotiations. But that impassé has been resolved.

The facility, set to open in 2024, was affected by the passage of the United States Inflation Reduction Act (IRA), which offers production incentives for companies building EV batteries in the U.S. Despite this, François-Philippe Champagne, Canada’s minister for innovation and industry, stated that Canada is “firmly in the leading position” in the auto industry’s generational transformation.

The deal has also been praised by Brian Kingston, president of the Canadian Vehicle Manufacturers’ Association, who described it as the “backbone” of a new supply chain. Meanwhile, Irek Kusmierczyk, Windsor–Tecumseh MP, said the deal, along with a similar agreement with Volkswagen for a plant in St. Thomas, Ontario, “anchored” Canada in the automotive supply chain.