The parliamentary budget officer says Ottawa’s deal with Volkswagen to build an EV battery plant in St. Thomas will cost more than was previously announced.
The agreement is expected to cost the federal government up to 16.3-billion-dollars over the next 10 years.
That projected figure is higher than what the federal government said the deal would cost taxpayers, which included a 700-million-dollar upfront capital investment and up to 13.2-billion-dollars in production tax credits.
It estimates Ottawa will have to make additional tax adjustments totalling 2.8-billion-dollars to match the benefits offered by the U-S Inflation Reduction Act.
An analysis by the PBO looks at the fiscal and economic costs and benefits of the deal in the construction phase of the facility.
The officer says the EV gigaplant will not create as many jobs as originally projected.
The analysis estimates the deal would create a peak of 3,100 jobs at the start of 2026 — but that figure would fall to 1,400 by the end of 2027.
The federal government said in April the deal would create up to three-thousand direct jobs and 30-thousand indirect jobs.
Canadian Press
