Mr. Speaker, as the industry pivots towards electric vehicles, anchoring these firms in Canada is critical to the Canadian economy and ensuring a resilient domestic supply chain. This is why the government has committed to making strong investments in this area. As a result, Volkswagen is investing $7 billion to establish its first overseas electric vehicle battery manufacturing plant in St. Thomas, Ontario. The plant, Volkswagen’s largest to date, will create up to 3,000 direct jobs and tens of thousands more in indirect jobs. Once complete in 2027, the plant will produce batteries for up to one million electric vehicles per year, bolstering Canada’s domestic battery manufacturing capacity to meet the demand for electric vehicles now and into the future.
Canada is deepening its investments in EV batteries to position itself as a global leader, with Volkswagen as an important player in the production of EV batteries and supporting the development of a sustainable domestic battery manufacturing sector in Canada.
The Government of Canada will contribute $700 million from the strategic innovation fund to help PowerCo build a net-zero lithium battery assembling plant in St. Thomas, Ontario. The Province of Ontario is likewise supporting the investment to establish this greenfield assembly plant with $500 million in direct incentives.
In addition, the Government of Canada has committed to providing PowerCo with a production incentive, matching that for which it would be eligible in the U.S. under the Inflation Reduction Act’s advanced manufacturing production credit. Consistent with the U.S. incentive, Canada’s support will be for those battery cells produced and sold and will phase out by 25 percentage points every year beginning in 2030. After 2032, the credit would be eliminated. The agreement also has the flexibility to be adjusted should the U.S. advanced manufacturing production credit change over time.