The promise of 3,000 jobs at Volkswagen Group’s new Ontario battery-cell plant, and up to 30,000 indirect jobs linked to the site, are key selling features that the federal government has touted to promote the major investment and to justify the large amount of public spending needed to land it.
But Ottawa is providing few details about exactly how it derived its tally, while both supporters and opponents of the subsidies that Ottawa promised question whether the job creation claims are overly optimistic.
“It is fully anticipated that a significant portion of the supply chain surrounding this plant will be established within Canada, likely including new European-based suppliers, which will lead to a significant multiplier,” Hans Parmar, a spokesperson for Innovation, Science and Economic Development Canada, told Automotive News Canada.
A job multiplier is used to estimate the total number of jobs created by each direct position. It includes the single factory job, jobs at plant suppliers and jobs created by the plant-linked employment — everyone from local homebuilders and teachers to auto technicians and fast-food workers.
In St. Thomas, the federal government projects that the battery-cell plant will have a multiplier of 10, translating into 30,000 indirect jobs for the 3,000 expected within the plant. The multiplier is “derived from an internal study done by the Volkswagen Group regarding its plant in Valencia, Spain,” Parmar said.
Aside from referring to the Volkswagen study — conducted ahead of the March groundbreaking in Spain by Volkswagen’s battery subsidiary, PowerCo — the industry ministry would not expand on how the multiplier was calculated.
For its part, Volkswagen partially distanced itself from the claim of 30,000 indirect jobs, saying the Canadian government was the source of that figure. VW claimed in its press materials that the investment would create “tens of thousands” of indirect jobs, without landing on a specific figure.
Volkswagen said it shared the “scope and the methodology” of the Spanish assessment with Ottawa, but not the complete study, which “contains competition-relevant information which needs to stay confidential.”
‘PROMISING THE MOON’