An employee works on the line at automaker General Motors (GM) Brightdrop unit’s CAMI EV Assembly in Ingersoll, Ontario.Carlos Osorio/Reuters
Canada is betting big on electric-vehicle production as the country hopes to establish itself a major player in the global race to build EV supply chains within the next few years.
The federal government, as well as the Quebec and Ontario governments, have collectively committed tens of billions of dollars to support investments from major automakers.
On Thursday, Ottawa and Ontario confirmed the details of the latest big-money deal – with Honda, which will build a comprehensive electric-vehicle chain in the province.
A note about government funding: Many of the dollar figures for production subsidies say “up to” – maximum totals that would only be reached if the factories began full-capacity production of batteries at the earliest possible date, because the subsidies are time-limited.
Here’s a breakdown of the most recent EV projects coming to Canada.
Prime Minister Justin Trudeau and Honda executive Toshihiro Mibe walk along an assembly line at an event announcing plans for a Honda electric vehicle battery plant in Alliston, Ont., on April 25.Nathan Denette/The Canadian Press
Ottawa and Ontario have announced a multibillion-dollar deal that will see Honda Motor Co. expand its Alliston, Ont., plant to manufacture electric vehicles and host a large EV battery plant. Both governments say the deal, unveiled Thursday by Prime Minister Justin Trudeau and Premier Doug Ford, is the largest ever single investment in Canada’s auto sector.
The federal government is expected to give Honda around $2.5-billion through tax credits for clean technology manufacturing and electric vehicle supply chain investments. Ontario has committed to providing up to $2.5-billion directly – such as for capital costs – and indirectly, such as covering site servicing costs.
Ontario’s Minister of Economic Development, Job Creation and Trade Vic Fedeli said in an interview before the announcement that the companies involved and governments would put in $15-billion in total for the expansion.
The structure of the governments’ deal with Honda will differ significantly from the previous ones with Volkswagen and Stellantis. Unlike with those companies, it will not involve matching production subsidies being offered in the United States. Instead, it will revolve around federal investment tax credits and “direct and indirect incentives” from Ontario.
The deal with Honda includes a stand-alone battery-manufacturing plant, a retooled car-assembly plant, as well as facilities for both cathode materials and separator components. It is expected to see 240,000 vehicles a year manufactured at the site, preserve its existing 4,200 jobs and add another 1,000 jobs.
Security guards the entrance to the construction site of a new EV battery plant in Saint-Basile-le-Grand, Que., on Jan. 19.Christinne Muschi/The Canadian Press
Swedish battery maker Northvolt announced in September that it will build a new multibillion-dollar electric-vehicle battery plant just outside of Montreal. The project would be the largest private-sector investment ever made in Quebec, Quebec Economy Minister Pierre Fitzgibbon said at the time.
Northvolt chose Saint-Basile-le-Grand in the Richelieu Valley for the project, which will take over a site stretching more than 170 hectares.
The company says the plant will have 60 gigawatt hours of annual battery cell production capacity at maximum output, enough for one million EVs. Adjacent facilities for battery recycling and cathode active material making will also be set up.
The project is valued at an estimated $7-billion. Quebec is providing loans and taking equity worth $1.37-billion in Northvolt to allow the company to build the first phase of a new lithium-ion battery factory. The province will also offer to pay up to one-third, or $1.53-billion, of $4.6-billion in production incentives to the corporation.
Ottawa is committing up to $4.4-billion to Northvolt, including $1.34-billion to build the plant, and providing the bulk of the production incentives.
Construction for the first phase of the project started at the end of 2023, but was met by opposition from environmental groups seeking a temporary injunction to stop the work. A Quebec Superior Court judge refused to grant the injunction in January.
Northvolt expects the plant to begin operations in 2026.
Quebec Premier Francois Legault speaks with Lisa Drake, centre, Ford vice-president of EV Industrialization for Ford Model e, and Ford Canada president and CEO Bev Goodman following a ground-breaking ceremony on the construction site of the new Ford manufacturing plant in Becancour, Que.Christinne Muschi/The Canadian Press
Ford Motor Co. announced in August, 2023, that it’s working with South Korea companies EcoProBM and SK On Co. Ltd. to build a $1.2-billion plant to produce EV battery materials in Becancour, Que.
The federal and Quebec governments each committed $322-million to the project, for a total of $644-million in public funding. The federal funding is a conditional contribution from the Strategic Innovation Fund, while the province granted a partially forgivable loan through government agency Investissement Québec.
The Quebec plant marks Korean EcoProBM’s first investment in North America. The plant will produce components made with nickel, cobalt and manganese and is expected to employ 345 workers.
The factory is expected to open in 2026, with the capacity to make components for batteries in approximately 45,000 Ford vehicles each year.
A Stellantis assembly worker works on the interior of a Chrysler Pacifica at the Windsor Assembly Plant, in Windsor, Ont., on Jan. 17, 2023.REBECCA COOK/Reuters
Stellantis NV and LG Energy Solution reached a deal with the federal and Ontario governments in July, 2023, to restart construction on their electric-vehicle battery factory in Windsor, Ont.
Ontario Economic Development Minister Vic Fedeli told The Globe and Mail that the deal will be worth “up to $15-billion” in subsidies. The Ontario government has agreed to pay one-third of the bill with Ottawa covering the rest.
The arrangement ended a standoff that escalated in May, 2023, when Stellantis and LG halted construction on their factory. They said the federal government had not kept a commitment to increase the facility’s initial $1-billion subsidy to match much greater incentives offered to battery makers in the United States, under that country’s Inflation Reduction Act.
A report from Parliamentary Budget Officer Yves Giroux, released in September, concluded that it will take 20 years for the federal and Ontario governments to break even on a total $28.2-billion in subsidies for two specific plants – Stellantis-LG and Volkwagen.
The Stellantis-LG plant is scheduled to begin production by the end of 2024.
Prime Minister Justin Trudeau arrives to make an announcement on a Volkswagen electric-vehicle battery plant at the Elgin County Railway Museum, in St. Thomas, Ont., on April 21, 2023.Tara Walton/The Canadian Press
Ottawa and Ontario announced a deal with Volkswagen in April, 2023 to provide the company with up to $13.2-billion for production support after the company builds a battery plant in St. Thomas, Ont. The deal also includes $700-million upfront from the federal government to build the plant and $500-million from Ontario.
This announcement was considered the first major new foray into Canada since the 1980s by an automaker that does not already have roots here.
The federal funding was meant to match the subsidy Volkswagen would have received through U.S. President Joe Biden’s Inflation Reduction Act, had it decided to build the factory in the U.S. instead. And it includes a provision that if the U.S. stops offering the subsidies, Canada will stop as well.
But Parliamentary Budget Officer Yves Giroux said in a report in June that the federal government’s deal with Volkswagen will cost $16.3-billion. The PBO released an analysis that said the initial estimate did not include $2.8-billion needed to offset taxes that Volkswagen would pay on the federal production support.
Another PBO report from last September also detailed that the governments’ subsidies for this plant and the Stellantis-LG plant would take 20 years to break even – not five as Ottawa previously suggested.
The new GM-Posco plant under construction in the Quebec Societe-Parc Industriel, in Becancour, Que., on March 24, 2023.Christinne Muschi/The Globe and Mail
General Motors Co. announced in March, 2022, that it was partnering with South Korean battery material maker Posco Chemical Co. Ltd. on a new cathode factory in Bécancour, Que.
The plant, which GM says will be operational by 2025 and create about 200 jobs, will produce cathode active material (CAM) – a major component of EV batteries that is made up of processed nickel and lithium – that will power the Chevrolet Silverado pickup truck and GMC Hummer EV.
The Canadian and Quebec governments said they will provide financial support worth roughly half the cost of the new electric-vehicle battery-materials plant, a project now valued at more than $600-million.
Quebec Premier François Legault said the province would provide a loan to help finance the plan worth $152-million, partly forgivable if employment is maintained over a decade. Federal Innovation, Science and Industry Minister François-Philippe Champagne aid Ottawa would contribute up to $147-million through the Strategic Innovation Fund’s Net Zero Accelerator initiative.
The plant is currently under construction.
With reports from Jeff Gray, Adam Radwanski, Laura Stone, Nicolas Van Praet and Bill Curry.
