The Parliamentary Budget Officer (PBO) says Canada’s exclusive contract with German auto giant Volkswagen to build an electric vehicle battery plant in southwestern Ontario will cost the federal government up to to $16.3 billion over the next ten years.
This estimate is higher than the amount the federal government had planned for taxpayers, which included an initial contribution of $700 million, under the Strategic Innovation Fund, and up to $13.2 billion in funding credits. production tax.
PBO’s estimate includes the $700 million contribution for plant construction and $12.8 billion in production support. However, the PBO estimates that Ottawa will also have to make additional tax adjustments totaling $2.8 billion to match the benefits provided by the US Inflation Reduction Act.
“This report examines only the economic benefits of the construction of this plant,” says the PBO in its report. These benefits are marginal. »
Yves Giroux says his office is unable to undertake an analysis of the costs and benefits of operating the plant until it receives clearance from the federal government and Volkswagen. He explains that the agreement includes confidential information regarding minimum production levels that cannot be disclosed directly or indirectly.
“It is very difficult to assess [les coûts et les avantages découlant de l’exploitation de l’usine] without doing any other analyzes and without being relieved of the confidentiality provisions that cover the production schedule,” explained Mr. Giroux during a press briefing on Wednesday morning.
Analysis of the construction phase alone predicts that the deal would create a peak of 3,100 jobs in early 2026, but that figure would drop to 1,400 by the end of 2027.
The federal government announced details of the deal in April, which would see Volkswagen build its first gigafactory outside Europe. Ottawa promised that this plant would create up to 3,000 direct jobs and 30,000 indirect jobs.
Asked in a scrum on Wednesday morning in Ottawa, Finance Minister Chrystia Freeland said she had not yet analyzed the PBO’s report, but said that this agreement had been taken into account in the most recent federal budget.
“I want to assure all Canadians that our investment in Volkswagen was made before the budget and all the details of this investment are included in the budget and in the figures that we published in the budget,” she said. said.