Ontario's Premier Doug Ford, accompanied by Canada's Prime Minister Justin Trudeau, answers questions from the media at the Stellantis Research and Development Centre in Windsor, Ont. on May 2, 2022.REBECCA COOK/Reuters
Ontario Premier Doug Ford says the province has pledged to cover one-third of the total cost of additional subsidies for automaking giant Stellantis STLA-N, as he urged Ottawa to secure a deal to prevent the company from moving construction of an electric-vehicle battery plant to the United States.
Negotiations between Ottawa, Ontario and the company around the future of the $5-billion Windsor, Ont. factory are continuing, with Mr. Ford’s latest offer expected to cost billions in additional subsidies for the facility to stay in Canada. The total cost of the subsidies remains unknown.
“I just want to thank the Prime Minister for being a great partner. I’m urging them to do what’s necessary to secure this, to make sure they secure their agreement,” Mr. Ford said Thursday at a transportation announcement in Kingsville, Ont.
“Ontario is willing to do our part. We have put more money on the table. Now more than ever we need all people, all levels of government, all communities, to work together to protect tens of thousands of jobs.”
The global auto-manufacturing giant on Thursday denied a report the previous day by the Toronto Star that a “tentative deal” between the company and federal and provincial governments had been reached.
“Stellantis does not confirm what has been reported,” said spokesperson LouAnn Gosselin.
Federal officials stressed that negotiations are continuing.
Locked in standoff with Canada, Stellantis threatens to pull out of UK
Laurie Bouchard, a spokesperson for Industry Minister François-Philippe Champagne, acknowledged what she called “positive engagement” between Ottawa and Queen’s Park, and did not deny Mr. Ford’s claim to have committed to covering one-third of subsidy costs. But she said no agreements have yet been reached.
“It’s premature to talk about a done deal,” said Ms. Bouchard, referring to talks both between the two levels of government and with Stellantis.
Another senior federal source said that a key sticking point between Ontario and the federal government is the timeline of the province’s offer to kick in more money, and whether it would be in place by the time Stellantis begins production. The Globe is not identifying that source because they were not authorized to speak publicly on the matter.
Talks between the Prime Minister’s Office, the Premier’s Office, Deputy Prime Minister Chrystia Freeland, Mr. Champagne and Mr. Ford stretched in the early morning hours this week, with one phone call lasting until almost 2 a.m., Mr. Ford said.
Ontario’s willingness to join Ottawa in committing more money to Stellantis to keep the company’s plant in Windsor reflects a shift from the province’s initial position, when the standoff between the company and the governments spilled into public view nearly three weeks ago. But Thursday was the first time the Premier detailed how far Ontario was willing to go. “We’re in for one-third of the cost,” he said.
Still, he portrayed the negotiations as a federal matter.
“This is the federal government’s deal and we’re there to support them,” Mr. Ford said, stressing that he’s confident an agreement is close.
At issue is the governments’ willingness to match billions of dollars in subsidies being offered in the United States – where Stellantis NV and its battery-making partner, LG Energy Solution Ltd., are threatening to move the project.
The Stellantis-LG deal to build the battery plant in Windsor was first announced in March of 2022, with the federal and provincial governments combining to offer about $1-billion in investment subsidies. But that was before the much more generous U.S. subsidies were put on the table through the implementation of the Inflation Reduction Act.
Ottawa has since proved willing to match the U.S. funding by committing as much as $13-billion in production subsidies to a second battery plant – to be built in St. Thomas, Ont., by Volkswagen VWAGY – once that plant is operational.
Demanding similar treatment, and frustrated by a lack of progress in talks with Ottawa that had been taking place more quietly, Stellantis partly halted construction of the Windsor plant last month until a new deal is reached, while threatening to relocate south of the border.
Since that time, there have essentially been three-way negotiations. Ottawa and Queen’s Park have tried to reach an arrangement with each other to share the cost of matching the U.S. subsidies, rather than having Ottawa foot that entire bill as it did for Volkswagen.
On Wednesday, Mr. Champagne said negotiations are progressing well.
“I would say everyone should take a deep breath, things are going well, the negotiations are progressing,” Mr. Champagne said after a Liberal caucus meeting in Ottawa. “We’re getting closer to the end of the negotiation.”
Ms. Gosselin said on Thursday that Stellantis has yet to receive an “official response” to its requests for additional public funding since first making them through a series of letters to the Ottawa that began shortly after the Inflation Reduction Act’s passage. She was seemingly referring to a lack of a formal new offer from Ottawa, despite the talks.
The confusion around the state of negotiations, along with how long they are taking, is being chalked up by industry insiders to the complexity of having to overhaul an agreement struck relatively recently to keep a landmark investment.
“The fact that this has taken this long is a reflection of just how difficult it is to renegotiate a deal,” said Flavio Volpe, the president of the Automotive Parts Manufacturers’ Association, “especially in public, especially at this size.”
With a report from Bill Curry in Ottawa