The new figure is higher than what the federal government said the deal would cost taxpayers, which included a $700-million upfront capital investment and up to $13.2-billion in production tax credits
The parliamentary budget officer says Canada’s exclusive contract with German auto giant Volkswagen to build an electric-vehicle battery plant in southwestern Ontario will cost the federal government up to $16.3-billion over the next ten years.
The PBO estimate includes the $700-million contribution for the construction of the plant and $12.8-billion in production support, but also estimates Ottawa will have to make additional tax adjustments that total $2.8-billion to match the benefits offered by the U.S. Inflation Reduction Act. Yves Giroux, the parliamentary budget officer, says his office is unable to take on analysis of the costs and benefits arising from the operation of the plant until it receives clearance from the federal government and Volkswagen.
“It’s very hard to assess without doing further analysis and without being relieved of the confidentiality provisions that cover the production schedule,” Giroux said in a media briefing.
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