ST. THOMAS, ONT. — There's nothing small about the $13 billion in subsidies that Canada has promised Volkswagen to secure the automaker's first battery plant outside of Europe, but it remains to be seen whether the deal is enough to kick start the manufacturing sector's future.
The rising sticker shock of establishing a manufacturing base for electric vehicles is, depending on who you ask, either a worthy investment to secure the next generation of auto assembly or a sign that Canada should consider giving up the subsidy race and not worry so much about the sector in general.
Securing Volkswagen is a "massive win," said Flavio Volpe at the Automotive Parts Manufacturing Association, adding that people should focus more on the $200 billion in output the company will have to meet to secure the full payout.
Because the deal is based on output rather than just an upfront cash payment from government, it looks much bigger than past deals with automakers but is fundamentally different, he said.
"You either have to restate what the other deals cost before, or admit that we're doing an apples to oranges comparison."