Canada’s Parliamentary Budget Officer (PBO) Yves Giroux has opened an investigation into the Liberal government’s unprecedented $13.8 billion subsidy to Volkswagen intended to encourage the European automaker to construct its first North American battery cell plant in Ontario.
According to the Epoch Times, the inquiry started towards the end of April, and the PBO plans to release the findings by the end of the Parliamentary spring session on June 23. Giroux said the decision to open a probe was not related to a recent letter from Conservative Leader Pierre Poilievre requesting that the PBO’s office initiate an analysis into the arrangement with Volkswagen.
The PBO’s probe follows the March 13 announcement by the government that PowerCo, a VW subsidiary, would be establishing VW’s first overseas battery cell plant in St. Thomas, Ontario. In the following month, Industry Minister François-Philippe Champagne confirmed Ottawa’s commitment of upwards of $13.2 billion in subsidies and a $700 million grant to convince VW to construct the battery factory in St. Thomas.
The factory is projected to manufacture batteries for up to a million electric vehicles annually after construction concludes in 2027 as well as create 3,000 direct and 30,000 indirect jobs. Prime Minister Justin Trudeau stated in April that other nations, including the US, were prepared to provide substantial funds for VW’s plant, underlining the plant’s global appeal.
Giroux reported that the federal Industry Department has been cooperative with supplying information about the deal. However, access to detailed contract copies was restricted by the House of Commons Standing Committee on Industry and Technology, with the contract review meeting open only to MPs and relevant staff without recording devices, and note-taking was disallowed.
The PBO sought additional information related to the deal from Finance Minister Chrystia Freeland in late April and early May, seeking specifics on the Liberals’ “methodology and assumptions used for the fiscal forecast of the subsidy, including assumptions regarding production capacity and production levels of the facility.” In response, Freeland’s assistant deputy minister, Glenn Purves, insisted the requested information has been provided, adding that he’s willing to meet with the PBO should “additional clarity and detail” be needed.
However, in a follow-up letter, Giroux requested to view the actual contract between the federal government and VW, as well as the “details regarding the data, methodology and assumptions” surrounding the Liberals’s calculations on the plant’s supposed job creation and economic impact. Industry Minister François-Philippe Champagne said the government will make the information available to Giroux, but stressed that “protected information that is commercially sensitive” cannot be released publicly.
Information for this briefing was found via The Epoch Times and the sources mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.