The parliamentary budget officer says it will take the federal and Ontario governments 20 years to break even on their electric-vehicle battery deals with two automotive giants.
The two governments are giving $13.2 billion to Volkswagen and $15 billion to Stellantis to build electric vehicle battery plants in St. Thomas and Windsor respectively.
This is in contrast to what Prime Minister Justin Trudeau advised when he visited the St. Thomas site in April of this year saying the break-even point would be achieved – quote – “very quickly.”
At the time, Trudeau admitted the government had to put some money on the table to convince Volkswagen to choose St. Thomas as the site of its new massive plant.
But he pointed out the ‘gigafactory’ will create up to three-thousand direct jobs and 30-thousand indirect jobs and will eventually surpass any government investment.
Those numbers have since been challenged.
The PBO report says it will take until 2043 for government revenues generated from the production of both plants to equal the production subsidies.
PBO Yves Giroux said this shows Ottawa likely drastically underestimated earlier this year when it said it would earn back the VW subsidy in under five years.
Such estimates, he added, assume widespread economic growth in Canada’s automotive sector as a result of the new plants.
His report makes more conservative estimates.
A related story can be found here.
