Automotive News Canada - June 2023 - 30

30
* JUNE 2023
How many more battery plants
can Canada afford to back? Any?
CONTINUED FROM PAGE 1
Ottawa's aggressive push to build
an electric-vehicle supply chain
has led to more than $25 billion in
investments from auto companies.
That includes the Stellantis battery
plant in Windsor, announced in
March 2022, and Volkswagen Group
on April 21, when the automaker
revealed plans to
build a $7 billion battery-cell
plant in St.
Thomas, Ont.
NEWS
ANALYSIS
The two plants are
expected to create 5,500 direct jobs
and tens of thousands of indirect
jobs in economic spinoffs.
But those commitments come with
a hefty price tag for taxpayers. In the
case of Volkswagen, Ottawa could
pay more than $13 billion over 10
years, an amount needed to compete
with incentives contained in the U.S.
Inflation Reduction Act (IRA).
That plant, which will produce
modules and battery cells, was also
expected to secure billions in subsidies.
TALKS
GET TENSE
The negotiations, which had been
conducted behind closed doors,
spilled onto the public stage in May
after the companies accused Ottawa
of reneging on its promise to match
IRA incentives. The companies
subsequently halted construction
on part of the site amid apparent
threats to move module production
to Michigan.
Ottawa, meanwhile, urged Ontario
- which had initially pledged $500
million to the project - to pony up
its " fair share. " After initially balking,
Premier Doug Ford stepped up.
A source close to the premier and
the negotiations told Automotive
News Canada the province plans
to pay for one-third of the entire
financial package, whatever that
total eventually is. The source said
Ontario could be contributing up to
$5 billion.
As of press time, a deal between
Ottawa and Stellantis-LGES had not
been reached.
" The United States Inflation
Reduction Act has put Canada in
a very challenging situation, " said
Brian Kingston, president of the
Canadian Vehicle Manufacturers'
Association (CVMA), which represents
the interests of the Detroit
Three. " These subsidies are unprecedented,
and the reality is Canada
will not be able to match dollar-for-dollar
a US $370 billion piece
of U.S. legislation. "
The Stellantis investment in
Windsor was announced months
before the U.S. government
passed
the IRA, which
gives battery cell
Construction on the
$5 billion battery-cell
plant in Windsor,
Ont., was halted
after Stellantis and
LG Energy Solution
publicly accused the
federal government
of reneging on its
commitment to
provide incentives
that matched what the
United States offers.
FILE PHOTO
No criminal
charges against
former union
chief Dias
He allegedly accepted money from
a supplier of COVID-19 rapid test
kits he promoted to members; Unifor
says its Code of Ethics was violated
BY AUTOMOTIVE NEWS CANADA
AN INVESTIGATION LAUNCHED LAST YEAR INTO
longtime Unifor leader Jerry Dias' conduct has yielded
no charges, Toronto police said May 25.
likes to put it. They engage with
companies and negotiate agreements
on a project-by-project basis. "
CANADA HAS CAPACITY
How many more battery plants
can Ottawa afford to subsidize?
Ontario Finance Minister Vic
Fedeli has said the province was pursuing
six such plants, while Quebec
is also pursuing similar investments.
But the APMA's Volpe thinks
Canada can accommodate no more
than four.
Volpe: Although Ontario and
Quebec say they are pursuing
battery plants, Canada has only
enough labour and production
capacity to accommodate an
additional three or four. FILE PHOTO
makers a tax credit of US $35 per
kilowatt-hour through 2030, when it
begins to be phased out. By 2033, the
credit will be eliminated.
Under
the same
timeline, automakers
also receive a credit
worth US $10 per
kilowatt-hour for the
modules.
" What you're seeing
play out within
[the Canadian] government
is the fact
that they've committed
over $120 billion
to this green transition,
and at some
point, they will reach
their fiscal capacity, "
Kingston said.
" So they're trying to
decide when, where
and how to deploy
that investment in the
most effective way
Payne:
Government
and the auto
industry
must do a
better job
of showing
taxpayers
how their
investments
benefit
many parts
of Canada.
FILE PHOTO
possible. I would argue that auto is a
no-brainer. "
I would argue that
[investing in] auto
is a no-brainer. "
Brian Kingston
President, Canadian Vehicle
Manufacturers' Association
While the U.S. offers tax credits
to companies meeting eligibility
requirements, Ottawa offers subsidies
on a case-by-case basis, said
Lana Payne, national president of
Unifor, which represents Canadian
hourly workers at Stellantis, Ford
Motor Co. and General Motors.
" The U.S. approach is very simple.
It's a direct production subsidy
that you can calculate based on what
you intend to produce at a facility, "
Payne said. " The Canadian approach
is more bespoke, as the government
" The constraining factors are
labour and the number of cars we
make in this country, " he said.
" You're not going to make a battery
in this country if you're not going to
put it in a car unless, perhaps, you're
Volkswagen, which has three different
footprints in the U.S. "
Domestic car manufacturers,
Volpe said, build up to " two million
vehicles in a nonpandemic year, and
that will probably limit us to three
or four [battery plants]. "
Canada's auto industry, which
historically has produced 10 per cent
of North American output, has an
opportunity to expand its manufacturing
footprint, said the CVMA's
Kingston. " If you look at what will be
required for this transition to electrification
globally, the current estimate
is 200 new gigafactories need
to be built between now and 2030 to
ramp up EV production, " he said.
While the United States will
attract the bulk of battery plants
in North America, Canada " has a
unique opportunity to grow our
share, " Kingston said.
To avoid a repeat of the public
feuding that has marred negotiations
over the Windsor plant, federal and
provincial officials " have to be a little
bit clearer in terms of what it is
that we're trying to attract and what
will be supported by government, "
Kingston said.
And both government and industry
must do a better job of selling
the benefits of these investments to
Canadian taxpayers, said Unifor's
Payne.
" There has to be an understanding
and a recognition that this is
really about creating an auto industry
that is truly pan-Canadian
right now, " she said. " So while the
investment is in a battery plant in
Windsor, the supply chain for that
battery plant, whether it's critical
minerals or other aspects of this,
are really in many other places in
Canada, not just Ontario. " - ANC
The department's financial crimes unit began investigating
the former president of Canada's largest private
sector union in spring of 2022 after
the union handed over money Dias
allegedly accepted from a supplier of
COVID-19 rapid test kits he promoted
to members. Police said they have
concluded their investigation.
Unifor at the time charged Dias
with violating the code of ethics and
democratic practices of the union's
constitution, and said a hearing
would be held before the national
executive board.
Anthony Dale, Unifor's director of
legal and constitutional matters, said
in a statement to Automotive News
Canada the union has satisfactorily
concluded its probe into Dias, who
will no longer be subject to a hearing
process under the its constitution.
Since Dias is no longer a Unifor
member, the union's constitution and
hearing processes no longer apply, Dale said.
The union was informed by police at the end of 2022
that no criminal charge would be laid, Dale said, but the
union's conclusion was unrelated to the police investigation.
Dias:
" I have
never made a
dime outside
of my salary
with Unifor,
and I have
always lived
by the union's
Code of
Conduct. "
FILE PHOTO
" Unifor stands by the findings of the independent
investigator's report, which determined that Dias violated
the union's Code of Ethics, " he said.
Dias said in a statement to The Canadian Press that he
reached a " satisfactory legal settlement " with Unifor.
'TIME TO MOVE ON WITH MY LIFE'
Dias said the allegations against him were not true.
" I have never made a dime outside of my salary with
Unifor, and I have always lived by the union's Code of
Conduct, " he said.
" In saying this, it is time to move on with my life. "
The union had said Dias allegedly gave a Unifor
employee $25,000, which Dias said was half of the money
from the supplier, and the employee subsequently filed a
complaint under the Unifor code of ethics and delivered
the money to the union.
Dias committed to entering a rehabilitation facility
in the wake of the incident, saying his use of painkillers,
sleeping pills and alcohol to deal with a sciatic nerve
issue had impaired his judgment.
Dias began a medical leave on Feb. 6, 2022, about a
week after being notified about the union's independent
investigation into the matter. He was already set to retire
that year, but did so early.
Dias said he has received medical attention to deal
with " serious health issues including debilitating sciatica "
and has received assistance to eliminate his dependence
on opioids to deal with pain. He said he regrets the
distraction to members and thanked those who reached
out to him.
Dias had been the president of Unifor since 2013
when it was created as a merger between the Canadian
Auto Workers and the Communications, Energy and
Paperworkers unions.
He was succeeded by former national secretary-treasurer
Lana Payne in an August 2022 election.
Dias said in the statement that he is proud of his work
as Unifor's first president.
" While I will no longer be leading the actions on the
picket lines and at the bargaining table, I will always be
Unifor's number one supporter. " - ANC
Automotive News Canada - June 2023

Table of Contents for the Digital Edition of Automotive News Canada - June 2023
