OTTAWA — A report from the Parliamentary Budget Officer says the total cost of provincial and federal support for electric vehicle battery manufacturing in Canada will be $5.8 billion more than government projections.
However, the head of the Automotive Parts Manufacturers’ Association (APMA) takes exception to that claim.
The report analyzes the costs to governments of recent deals struck with Northvolt, Volkswagen and Stellantis-LG Energy Solution to locate EV battery manufacturing facilities in Canada.
It pegs the total cost of government support at $43.6 billion between 2022 and 2033, which is $5.8 billion higher than the $37.7 billion in costs announced by Ottawa and the provinces.
The report says the extra $5.8 billion represents foregone corporate income tax revenues for the federal, Ontario and Quebec governments.
Of the total $43.6 billion in costs, 62 per cent will be borne by the federal government and 38 per cent will fall on the governments of Ontario and Quebec.
APMA President Flavio Volpe called the report by Yves Giroux “lazy work that should not go unchallenged.”
He accused the PBO of cherry picking numbers on both sides of the ledger.
Volpe said Giroux excluded the economic benefits of a supply chain that feeds into battery manufacturing and included potential tax adjustments that could negatively affect future government revenue.
“Given the uncertainty related to the future location of the EV supply chain and to the incrementality of the economic and fiscal impact, we incorporated ONLY the impacts related to the cell and module manufacturing nodes,” the report reads, in part.