The federal government this year announced subsidies for Volkswagen and the Stellantis-LG Energy Solution joint venture to encourage them to build electric vehicle battery factories in Canada. (Photo: The Canadian Press)
The parliamentary budget officer estimates it will take the federal government 20 years, until 2043, to break even on its deals with two automotive giants to make electric vehicle batteries in Ontario.
The federal government this year announced subsidies for Volkswagen and the Stellantis-LG Energy Solution joint venture to encourage them to build electric vehicle battery factories in Canada.
In an analysis of the break-even point for these production subsidies provided by Ottawa, the Parliamentary Budget Officer (PBO) estimates that it will take 20 years for government revenues from the production of the two Ontario factories to reach the equivalent of the production subsidies, which total by the end of 2032 28.2 billion US dollars.
The PBO calculation does not take into account potential revenue that can be generated throughout the supply chain.
This 20-year break-even point contrasts with the five-year threshold proposed by the federal government for the Volkswagen deal, which includes expected revenue from increasing production throughout the supply chain.
The federal government has not provided a break-even estimate for the Stellantis deal.
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