The Parliamentary Budget Officer says government support for electric vehicle battery plants in Windsor, St. Thomas, and Quebec will be more than previously thought, and it'll take provincial and federal governments longer to break even on those investments.
"We estimate the total cost of government support for EV battery manufacturing by Northvolt, Volkswagen, and Stellantis-LGES to be $43.6-billion over 2022-23 to 2032-33, which is $5.8-billion higher than the $37.7-billlion in announced costs," said Yves Giroux. "The $5.8-billion in non-announced costs represents foregone corporate income tax revenues for the federal, Ontario and Quebec governments combined."
Sixty-two per cent of the cost will be incurred by the federal government, said Giroux.
The estimate of the total cost depends on the U.S. Advanced Manufacturing Production Credit and Northvolt, Volkswagen and Stellantis-LGES starting production on time.
The Parliamentary Budget Officer's report also said the provincial and federal governments will wait years longer to break even.
"We estimate a break-even timeline of 15 years for the $13.2-billion production subsidy announced for Volkswagen, and 23 years for the $15-billion in the production subsidies announced for Stellantis-LGES, consistent with our previous estimate of 20 years based on their combined production schedules," added Giroux.
It will take 11 years for the Quebec and federal governments to break even on the $4.6-billion production subsidy for Northvolt.
