Companies building electric-vehicle components in Canada won’t necessarily get the same massive subsidy package that Volkswagen recently received, Prime Minister Justin Trudeau said.
Canada signed a deal to subsidize the German automaker’s production of electric-vehicle batteries by as much as $13 billion over 10 years. The agreement means Volkswagen plans to build an enormous new factory, employing thousands of workers — up to 3,000 — at a site in Ontario about two hours northeast of Detroit.
When asked whether every other company building a battery plant can expect the same deal, Trudeau said no.
“We are prepared to step up and make sure that we’re competitive” with U.S. manufacturing subsidies, Trudeau said April 28 during an interview at Bloomberg headquarters in New York. “But we’re going to look at each one on a case-by-case basis. We will think strategically about this” and not just say yes to any firm, he said.
In addition to Volkswagen, Stellantis and LG Energy Solution are building a battery-making facility together in Windsor, Ont., across the river from Detroit.
Earlier this month in Washington, Trudeau’s finance minister, Chrystia Freeland, warned that democracies cannot get into a “race to the bottom” on corporate subsidies or they’ll erode their tax bases, harming their ability to pay for social programs.
Despite the money his government rolled out for Volkswagen — and the roughly $80 billion in long-term investment tax credits it promised in its latest budget for a variety of industries — Trudeau argued he’s still guarding against a subsidy war.
His comments come just months before the Detroit Three automakers are set to engage in contract talks with Unifor, the union that represents thousands of automakers at a number of assembly, engine and transmission plants in Ontario.
