Federal Subsidies for Electric Vehicles Surpass Annual Output of Entire Canadian Auto Sector
The total federal subsidies for Electric Vehicles (EV) manufacturers have reached $32 billion, surpassing the yearly production value of Canada’s entire automobile sector. Recently, the Cabinet approved a $322 million subsidy for Ford and its South Korean partners, EcoPro BM and SK On Co., to manufacture electric battery components in Becancour, Quebec. In addition to the federal subsidy, the Quebec government will provide a $322 million “partially forgivable loan.”
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Electric Vehicles
According to a news release from Innovation, Science and Economic Development Canada on August 17, the project is expected to generate over 345 jobs. Industry Minister Francois-Philippe Champagne highlighted the achievement, stating, “It’s pretty remarkable what we have achieved in just a few months.” Ford had previously received a $295 million subsidy in 2020 for the production of electric cars in Oakville, Ontario.
Since April, the Cabinet has approved $16.3 billion in subsidies for Volkswagen to establish an electric battery plant in St. Thomas, Ontario, and an additional $15 billion for Stellantis to operate battery factories in Windsor and Brampton, Ontario. The cumulative subsidies for the EV industry now amount to nearly $32 billion. Ottawa asserts that all costs will be recovered, but specific figures confirming this forecast remain undisclosed.
Comparatively, Canada’s automotive manufacturing industry contributed around $12.5 billion to the economy in 2020, as per Innovation, Science and Economic Development Canada data. Addressing concerns, Deputy Minister of the Industry Department Simon Kennedy emphasized the necessity of subsidizing the EV industry to ensure the survival of the entire automotive cluster, safeguarding hundreds of thousands of jobs, including those in supply chain companies like Magna, Martinrea, and Linamar.
The planned facility in Becancour aims to produce approximately 45,000 tonnes per year of cathode active materials for Ford’s EV manufacturing, with a total project value of around $1.2 billion. This facility is part of Quebec’s “La Vallée de la Transition Énergétique,” designated as the third innovation zone in the region, including Trois-Rivieres and Shawinigan.
