Local MPPs divided on whether it's the feds, province that needs to step up in Stellantis talks

Local MPPs agree on the importance of ongoing negotiations with Stellantis on the future of the planned electric vehicle battery factory in Windsor — but remain at odds as to whether it's the federal or provincial government that needs to do more.

Windsor-Tecumseh MPP Andrew Dowie on Tuesday echoed comments by Premier Doug Ford that Ontario cannot compete with the fiscal might of the U.S. federal government when it comes to negotiating agreements to match the American Inflation Reduction Act.

"Throughout the entire process of the negotiations with Stellantis, the federal government has exclusively led the discussions with both Stellantis and Volkswagen on matching the U.S. Inflation Reduction Act," Dowie told CBC Windsor.

"We do support the federal government in doing what is necessary to ensure Canada can compete with other countries and meeting the commitments that [made] it to Stellantis to get our Windsor battery plant deal done."

Stellantis last week said it was implementing "contingency plans," saying the federal government had failed to provide what it promised.

On Monday, the company halted construction at part of the Windsor facility manufacturing battery modules — but a spokesperson said they could not comment on whether the battery cell portion of the facility, which would represent the bulk of the planned 2,500 future jobs at the site, was being considered as part of its contingency plans.

Transportation minister 'confident' in negotiations

Federal Transportation Minister Omar Alghabra was in Detroit Tuesday for an announcement with American counterparts about a new EV charging corridor stretching from Kalamazoo, Mich., to Quebec City.

He told reporters he was "confident" in the ongoing negotiations between government and the auto maker.

"There are ongoing negotiations right now. I feel confident that plant will proceed but there are still ongoing negotiations," Aghabra said, noting he could not say more amid negotiations.

Stellantis and LG Energy Solution announced the plant last year, with construction ongoing for months. It was due to open next year.

The provincial government provided "identical" deals to Stellantis and Volkswagen, Dowie said, adding he believes the issue is the federal government's to resolve because the Inflation Reduction Act is a piece of U.S. federal policy.

"We intend to support this project and we have and we've done everything that we've been asked to do. And it's a situation that we know we want to support the federal government in resolving, but it is within their commitments to Stellantis."

But Windsor West MPP Lisa Gretzky said she believed comments by Ford Monday made the issue a "political football."

"What was really concerning to me is the premier was saying that he was concerned but that they had done everything they can, that it really wasn't up to them anymore," she said.

She said that the premier needs to be willing to go "back to the table and have those conversations and help be a part of the solution."

"The one thing that people in Windsor-Essex should be able to count on, is knowing that all levels of governments are going to work together, that they're not going to punt responsibility to somebody else, that they're all going to work together to ensure that they do."

Windsor business community eyeing issue: Chamber

Meanwhile, all eyes in the local business community are on the deal, said Windsor-Essex Chamber of Commerce CEO Rakesh Naidu.

"Everyone wants this to continue to move forward," Naidu said. "There are tremendous benefits not just to the auto industry and suppliers but … the ripple effect. Everyone knows how the region will be impacted and benefit."

Naidu said he remains optimistic about the negotiations because both parties remain at the table.

The Inflation Reduction Act is a United States federal law that aims to boost clean energy and tackle climate change.

The deal pushed Canada to offer Volkswagen, which recently announced a facility near St. Thomas, Ont., as much as $13 billion in federal subsidies. Ottawa offered $500 million in contributions to Stellantis last March. The Stellantis deal was reached before the IRA came into force, but now the automaker says it wants a similar deal.

The IRA will raise competition not just between Canada and the United States, but between all countries that make vehicles, said one expert.

"Everyone is trying to get their electric vehicle investments in place," said Kristin Dziczek, an auto advisor for the Federal Reserve Bank of Chicago. "Partly because the IRA is only a 10-year program and it starts to phase out near the end of it, and partly because they see this as a market imperative.

"So then, lots more investment, then lots more competition between states, between countries as to where that investment will land."

Dziczek said the the transition to electric vehicles is especially important for traditional automotive hubs like Ontario, Michigan and Ohio as they race to secure green jobs in place ones tied to traditional internal combustion engine.

"Who's going to win in the downsizing of the traditional industry?"

Stellantis, LG and the letter to Trudeau

CBC News has obtained a copy of a letter, first reported on by the Toronto Star, that Stellantis CEO Carlos Tavares and LG CEO Young Soo Kwon sent to Trudeau last month.

In the letter, the CEOs said they appreciated the "swift assurances" the Liberal government gave them that the IRA would "not place this battery plant on an uncompetitive footing with plants in the U.S."

"We have relied heavily on those assurances and have continued to move forward with the construction of the plant and the preparation of the machinery and equipment over the past several months while negotiating specific terms to implement IRA-equivalent benefits for this plant," the letter says.

The letter says Tavares and Soo Kwon appreciate the five times the Liberal government has given the firms written confirmation to "match the production incentives" under the IRA.

The CEOs go on to say that the delay in signing a deal "is bringing significant risk to the project."

"In the event our agreement is not promptly executed, we will be forced to make difficult decisions regarding this project and other respective investments in Canada in order to deliver on our commitments to bring new technology to the North American market," the letter said.