Volkswagen ID.7 electric cars at its plant in Emden, Germany.Carmen Jaspersen/Reuters
The German auto industry is keen on expanding its presence in Canada and is in the midst of discussions about doing so, Berlin’s Economic Minister says.
Katherina Reiche, Minister for Economic Affairs and Energy, said the Canadian auto sector strategy laid out by Prime Minster Mark Carney last week “is very attractive” for Germany.
“I can’t go into detail, but please take the message that our car industry is willing to invest here, because we will find good conditions here,” Ms. Reiche said in an interview.
“We are in talks to extend our footprint” in Canada, she later added.
Volkswagen has committed to building an electric-vehicle battery factory in St. Thomas, Ont., through its PowerCo subsidiary.
Ms. Reiche did not elaborate on whether an expanded footprint means through PowerCo or another investment.
“Leave it to the talks,” she said, adding “it’s more than just talking. We are looking into numbers, into details.”
As The Globe and Mail reported, Ottawa has asked the governments of South Korea and Germany, the two countries with companies bidding to build the Canadian navy’s next submarine, to make auto industry production pledges in Canada as part of their pitches.
Last month, Hyundai Motor Group executive chair Chung Euisun visited Ottawa at the same time as a high-level South Korean government delegation led by Kang Hoon-sik, South Korea’s presidential chief of staff. The South Koreans signed a memorandum of understanding intended to bring South Korean auto-sector manufacturing and investment to Canada.
The MOU is non-binding, but pledges both sides to working together to promote the manufacturing of autos, electric vehicles, batteries and hydrogen-powered vehicles. The agreement said Ottawa and Seoul will work on “advancing a Korean automotive industrial footprint in Canada” as well as “electric vehicle (EV) manufacturing opportunities.”
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The German minister was in Ottawa Monday speaking to three members of the Carney cabinet: Industry Minister Mélanie Joly, Energy and Natural Resources Minister Tim Hodgson and Dominic LeBlanc, whose numerous responsibilities are Canada-U.S. Trade, Intergovernmental Affairs, Internal Trade and One Canadian Economy, which includes major resource and infrastructure projects.
Ms. Reiche said the German auto industry interest is independent of Berlin’s joint bid with Norway to supply Canada with up to 12 submarines. “You can see it as related to a certain deal; I wouldn’t do so,” she said.
But the minister acknowledged that Berlin has been talking to its auto industry.
“I know that for Canada, to gain back production in manufacturing, jobs, especially the car industry, is of major importance. That’s why we started to talk to our car industries, the large OEMs and the Canadian government, on which investments could be made,” Ms. Reiche said, referring to original equipment manufacturers in the German auto industry.
Last week, Mr. Carney unveiled an auto strategy that included $3.1-billion to help the auto industry attract new investment.
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The German minister said ultimately it will be up to automotive industry players to make their own decisions about investment.
“It’s a decision of a private company,” Ms. Reiche said.
“They have to decide if Canada offers optimal conditions for production here.”
She said the PowerCo. investment by Volkswagen − which predates the submarine bid − demonstrates that “Canada is an absolute interesting partner and reliable partner for many reasons.”
Ms. Reiche said her discussions with ministers focused more on the submarine deal than the auto sector. They talked about major Canadian infrastructure projects, such as windmills and carbon capture and storage as well as critical minerals and co-operation in space.
The Economic Minister said Germany endorses the message that Mr. Carney delivered in Davos, Switzerland, where he said middle powers must work together as the United States retreats from the international order and weaponizes its economic might.
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“We find ourselves in the same situation, seeking partnerships where Canada is fortunately not a new partner. We are looking to deepen our relationship in every single case that one can imagine.”
Ms. Reiche said Germany is interested in purchasing more Canadian liquefied natural gas to power its industries and heat German homes.
Germany is looking to buy and swap West Coast LNG on the Asian spot market in exchange for accessible suppliers closer to Europe. German energy companies are also buying LNG produced by Canadian companies that is transported to liquefaction terminals in Louisiana.
The country is interested in buying liquefied gas directly from Canada, but Ottawa must decide whether to push to build export terminals on the East Coast or the Port of Montreal.
“What Germany can offer is secure off-take agreements or long-term contracts for gas,” Ms. Reiche said. “The prerequisite to invest is to have a long-term contract.”
Germany though is open to possible investments in Canadian ports including Churchill, Man., she said.
Ms. Reiche said Germany has already funded several critical mineral projects and is open to further equity investments.