It will take 20 years for the federal government to break even on its promise to provide $28.2 billion in production subsidies to auto plants in St. Thomas and Windsor.
This is according to a new report published on Tuesday morning by the Parliamentary Budget Officer (PBO).
The report says it will be until 2043 before the Stellantis-LGES electric vehicle battery plant in Windsor and the Volkswagen plant in St. Thomas generate enough federal and provincial tax revenue to total the subsidies.
“The break-even timeline for the $28.2 billion in production subsidies announced for Stellantis-LGES and Volkswagen is estimated to be 20 years, significantly longer than the government’s estimate of a recovery within five years for Volkswagen,” PBO Yves Giroux said in a press release. release.
Ottawa pledged in the spring to give Volksagen up to $13 billion in subsidies over the next 10 years to secure the battery plant in St. Thomas. That plant will be the size of 391 football fields and will bring automotive jobs to the region.
Meanwhile, Stellantis-LG halted construction of a plant in Windsor this summer unless the provincial and federal governments came up with more than the initial $500 million investment. Construction resumed after the federal and provincial governments announced subsidies of up to $15 billion.
That plant is expected to open in 2024 and employ about 2,500 people.
Ottawa will cover two-thirds of the subsidies, or $18.8 billion combined, for Stellantis-LGES and Volkswagen, and Ontario will provide $9.4 billion.
Ontario has not announced a break-even schedule for the Windsor plant, according to the report.
More to come.