A deal has been reached between Stellantis and the federal and Ontario governments to resume construction of the electric vehicle battery gigafactory in Windsor, Ont., the company confirmed on Wednesday.
It said in a news release that NextStar Energy, which had a joint venture with Stellantis and LG Energy Solution, signed a “binding agreement that secures the future of battery cell and module production in Windsor.”
“We are pleased that the federal government with the support of the provincial government came back and met their commitment of leveling the playing field with the (Inflation Reduction Act),” Stellantis North America chief operating officer Mark Stewart said in a joint statement with LG Energy.
The deal comes after just over a month of negotiations following a decision by Stellantis to stop building the plant, saying the federal government had not delivered what was promised and threatened to move the plant elsewhere.
The plant was announced last year and it was expected to create 2,500 jobs, with all levels of government to provide financial support.
Last month, Stellantis said it had received and was reviewing an offer to keep the factory as both Ottawa and Ontario said negotiations were ongoing.
Details of the deal have not been released, however, Innovation, Science and Industry Minister François-Philippe Champagne said in June that the amount the governments will offer shouldn’t surprise anyone as Canada aimed to “level the playing field” and match subsidies offered by the U.S. under the Inflation Reduction Act (IRA).
Ontario’s Economic Development Minister Vic Fedeli told Global News in an interview that the deal amounts to $15 billion in tax incentives for battery production with the province taking on $5 billion.
In addition, the minister said the deal has resulted in a Canada-Ontario auto pact, that will see identical incentives offered to other battery manufacturers who set up shop in the province.
“I think this is a historic deal, it’s a great agreement and it protects the thousands of jobs quite frankly that were at stake,” Fedeli said.
Dong-Myung Kim, president and head of the Advanced Automotive Battery Division of LG Energy said the company was happy to finally move forward with building the plant.
“It’s a good day not only for our joint venture, but also for Canada,” he said in the statement.
Stewart also thanked the efforts of Unifor in working to get a deal done “in our shared commitment to protecting thousands of new jobs.”
The union said in a statement it welcomed the agreement and thanked the governments involved and the company “for reaching this important conclusion and taking the necessary action to secure the Stellantis production footprint in Canada.”
—With files from Colin D’Mello, Global News