Mr. Speaker, with regard to parts (a) through (e), the government cannot release commercially sensitive details of the Volkswagen, PowerCo., project, including details concerning the negotiations, beyond what has already been made public. Additional information in response to the various parts of the question can be found below.
With regard to part (a), generally speaking, the government must complete several steps before it can fund a project. First, it conducts technical, financial and market due diligence of all projects for which applications were submitted. Once a project passes the due diligence assessment, officials engage with applicants to determine the conditions of agreed-on funding and create two key documents: a term sheet and a contribution agreement. Through these discussions, the government and the applicant agree upon a description of a project’s fundamental characteristics and identify expected commitments and benefits resulting from the project, such as job creation, research and development, R&D, and capital investments, greenhouse gas emissions reductions, IP preservation and employment targets related to gender, diversity and equity.
With respect to key milestones for PowerCo., Volkswagen announced on March 13, that it had chosen Canada as the location for its first overseas Gigafactory of its battery company PowerCo, SE. This news was shared on the Government of Canada’s web page: Canada and Ontario welcome historic investment from Volkswagen.
Following this announcement, on April 21, Volkswagen, PowerCo., Canada and the Province of Ontario released additional information about the project and the level of support agreed to secure this investment. More information on the PowerCo. project can be found on the web page: Volkswagen’s new electric vehicle battery plant will create thousands of new jobs.
With regard to part (b), before moving ahead with a project, the government conducts a project assessment covering key areas of consideration, such as the benefits the project can deliver in relation to the growth of Canadian firms, clusters and supply chains, while also evaluating the financial and market risk of proponents and their potential to meet demonstrable market demand.
To date, Canada has attracted 110 projects with $62.6 billion in total project expenditures. Of these 110 projects, 24 are in the auto and batteries sectors, and 21 are in the advanced manufacturing sectors. This information is publicly available on the web page: Projects: Strategic Innovation Fund.
With regard to part (c), decision-making factors are specific to agreements with PowerCo. They are subject to cabinet confidence, and the release of this information would negatively impact future negotiations. Overall, each project is assessed based on the Government of Canada’s priorities and the potential for the project to benefit the Canadian economy and Canadians at large. For example, under its business innovation and growth project segment, the strategic innovation fund, SIF, focuses on funding innovation projects that involve activities related to R&D and commercialization of innovative products, processes or services; support the expansion or material improvement of existing industrial or technological facilities; and support the establishment of new facilities or bring new ventures and production capabilities to Canada.
As indicated above, Canada also seeks commitments with respect to economic, public and innovation benefits when entering into a funding agreement with a company, such as job creation in Canada, R&D, capital investments, reduction of greenhouse gas, GHG, emissions, gender, diversity and equity targets, and preservation of intellectual property, IP, in Canada. Additional information can be found on the web page: Program Guide – Strategic Innovation Fund – D) What are eligible supported costs?
With respect to PowerCo., the decision to support both capital expenditures and production follows the government’s public commitment to facilitate the industrial transformation of the automotive sector to a net-zero future and take the actions needed to remain competitive.
With regard to part (e), as indicated, the government does stipulate expected commitments and benefits when negotiating funding agreements, including but not limited to job creation, R&D and capital investments, greenhouse gas emissions reductions, if applicable, IP preservation and targets related to gender, diversity and equity.