Quebec and Ottawa are jointly injecting nearly $100 million in funding to create an electric vehicle battery plant for a Montreal-area company.
Prime Minister Justin Trudeau and Premier François Legault announced the initiative Monday, saying the money will go toward building a future plant for Lion Electric, a manufacturer of electric school buses and trucks, to build its own batteries.
The demand for electric vehicles is quickly growing and the federal government wants to support local companies, Trudeau said. Ottawa also wants to support the manufacturing sector and projects that will accelerate the electrification of the country’s transport systems.
“It’s another step in the right direction,” he said.
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Lion Electric, which has sold trucks to giants Amazon and the Canadian National Railway Company, currently has 465 employees in Saint-Jérôme.
The new project is expected to lead to 135 new jobs when it is up and running. In the long run, officials say that the Quebec company’s latest endeavour is also set to create 150 more jobs.
Legault, for his part, said the funding represents the province’s devotion to boosting electric transportation and building a stronger local economy. Quebec is also moving toward a greener future, he added.
“We are ready to take risks so that our companies become champions in promising sectors,” he said in a statement.
Ottawa and Quebec are injecting $50 million each to the project, which is expected to cost $185 million overall. Lion Electric will cover the remaining $85 million.
The funding from Quebec will come in the form of a loan, Economy Minister Pierre Fitzgibbon told the news conference. Up to $15 million will be forgiven in five years if the company meets certain conditions, while the rest will have to be repaid over 15 years, he added.
Fitzgibbon said the commitments include maintaining a certain number of jobs in St-Jerome for 15 years. It’s those “commitments that justify the $15 million,” Fitzgibbon said.
Federal Innovation Minister François-Philippe Champagne said up to 100 per cent of the federal portion could be forgiven if certain conditions are met.
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Lion Electric says the new factory will allow it control costs related to battery production and to have more control over the design of the batteries it uses in its electric school buses and trucks. The company’s president also explained that the move will make the product more accessible.
“The cost of the batteries will be a lot cheaper and one of the challenges right now is the sticker price,” said Marc Bédard.
Along with the new factory, the company will create an innovation centre to conduct research and development.
Construction of the plant is expected to wrap up by 2023.
— With files from Global News’ Tim Sargeant and The Canadian Press