Trudeau Pushing Ontario to Pay Up for Stellantis Deal, Premier Says

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(Bloomberg) — Canadian Prime Minister Justin Trudeau’s government is unfairly demanding that Ontario pay more to subsidize an electric vehicle battery plant at the “eleventh hour,” even after provincial officials are excluded from negotiations, the province’s premier has said.

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Stellantis NV halted construction on the facility in Windsor, Ontario, earlier this week after accusing the Trudeau government of failing to provide public funds it had earmarked for the site. Trudeau’s ministers, in contrast, said Ontario is refusing to pay its fair share of production subsidies.

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Ontario Premier Doug Ford said Wednesday that his office was not part of the negotiations that led to the February agreement to support the plant.

“I’m disappointed now that we didn’t get involved — they never spoke to us,” Ford told reporters on Wednesday. “At 11 o’clock, they do.”

Ford said the province has done its “fair share,” but that the federal government is responsible for competing with the United States on subsidies.

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“We will deal with any state,” he said, adding that Ontario is now at the negotiating table with the federal government and businesses.

The CEOs of Stellantis and partner LG Energy Solution Ltd. wrote: In a letter to Trudeau last month that they were waiting for his government to sign the “Special Contribution Agreement” that was finalized in February.

“Continuous delays in the implementation of this agreement bring great risks to the project,” Carlos Tavares and Kwon Young-soo wrote, adding that they may soon have to make “difficult decisions.”

The letter contains no details of the deal except that it was “mutually satisfactory,” and adds that Canada has submitted five written documents confirming its commitment to stimulus matching under the US Inflation Reduction Act.

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Stellantis and LG announced the $4 billion project last year, but reopened talks with Canada to get more public money after the IRA was passed. The Trudeau government has already offered up to C$13 billion ($9.6 billion) to Volkswagen AG to attract a car battery plant to Ontario.

Stellantis and LG said in a statement on Wednesday that they are only asking the Canadian government to honor commitments it made in February.

“This uncertainty is unfair to our Canadian employees, as well as to Stellantis and LGES investments,” the companies said.

Federal Trade Minister Mary Ng told reporters that negotiations were continuing and that “this government has kept its word”.

The 45 GWh plant will create 2,500 jobs and power the Stellantis assembly plant in Windsor and others across North America. Stellantis also warned that UK factories could close if the country does not renegotiate its post-Brexit trade agreement with the European Union.