It won't take five years for the federal and Ontario governments to break even on their investments in the NextStar EV battery plant in Windsor and the Volkswagen gigafactory in St. Thomas.
A report from Parliamentary Budget Officer Yves Giroux said it will be more like 20 years.
Giroux released his analysis on Tuesday.
Previous government estimates suggested a payback of just five years after the province and federal governments gave Volkswagen up to $13.2-billion in subsidies and Stellantis up to $15-billion.
"We estimate that the federal and provincial government tax revenues generated from the Stellantis-LGES and Volkswagen EV battery manufacturing plants over the period 2024 to 2043 will be equal to the total amount of production subsidies," said Giroux. "That is significantly longer than the government's estimate of a payback within five years for Volkswagen."
Under an agreement between the two governments and the automakers, Ottawa would cover two-thirds of the total subsidies, about $18.8-billlion, while Queen's Park would offer the rest, $9.4-billion.
Officials announced the plant in Windsor with fanfare in March 2022, but just over a year later, the agreement was in jeopardy. Stellantis and LGES demanded more money after the Volkswagen announcement and the introduction of the Inflation Reduction Act in the U.S. Stellantis shut down construction on the module plant, although work to build the battery plant continued.
After weeks of tense negotiations, all sides reached an agreement, and construction on the Windsor facility resumed in July.
