The federal and Ontario governments announced Tuesday that Canada’s first lithium-ion separation plant will be built in Port Colborne, Ontario. The facility is part of broader electric vehicle supply chain projects being built in the region.
As first reported by iPolitics, Japanese company Asahi Kasei said on April 25 that it will build a lithium-ion separation plant, the first of its kind, in Ontario. That was the same day Honda announced its $15 billion plans for an electric vehicle supply chain in Ontario.
“After decades of decline in our manufacturing communities and in an uncertain world where we face many new challenges, we have a plan to meet this moment, a plan to secure the future for our families to bring our high streets to life. and position Canada as the most trusted supplier in a net-zero emissions world,” Prime Minister Justin Trudeau said in the announcement.
According to Asahi Kasei, this plant will cost almost $1.6 billion and will annually produce 700 square meters of a special coated membrane used in the manufacture of lithium batteries. Asahi Kasei did not mention which municipality the plant would reach in its April announcement.
At the time of Honda’s announcement last month, the company said it would retrofit its existing vehicle plant in Alliston, Ont., to exclusively build electric vehicles, a nearby battery plant and two battery parts facilities elsewhere in Ontario.
The Niagara Region plant is part of two levels of government partnering with Japanese automaker Honda to build a full electric vehicle supply chain in Canada.
Unlike previous EV deals signed by Ottawa and Ontario, this one does not appear to include production subsidies.
Instead, the federal government is contributing $2.5 billion through tax credits under the existing cleantech manufacturing program and the proposed electric vehicle supply chain tax credit included in the 2024 budget.
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Ontario is contributing $2.5 billion through direct capital cost support and indirectly by covering land maintenance costs for future facilities.
The federal and Ontario governments have already provided a combined $28.2 billion in subsidies to attract Volkswagen and Stellantis LG battery plants to St. Thomas and Windsor, respectively. This tactic was used to attract plants to Canada instead of the United States, which included incentives in the Inflation Reduction Act.
These subsidies are contingent on meeting contracting, construction and production targets, which are expected to be distributed over the years, ending in 2032.
The federal government covers two-thirds of these costs and the Ontario government pays the rest.
These other projects, particularly the Stellantis battery plant in Windsor, have faced criticism for hiring foreign workers to help with construction.
Ottawa has maintained that foreign workers are training Canadian tradespeople how to do skilled jobs.
For this latest project in Port Colborne, Industry Minister Francois-Philippe Champagne did not share specific figures when asked about jobs going to Canadians, but said the goal is to maximize opportunities.
“We have always made sure to maximize the number of jobs for Canadians, but not only during the construction phase of the plant, but also that all suppliers are involved in it. And I can tell you that when you have a plant like that in Port Colborne or in the region, it changes the landscape for generations to come,” Champagne said.
Currently, the federal government’s goal is for all new vehicles sold in the country to be electric by 2035.
The announcement comes as the Biden administration has announced plans to impose new tariffs on Chinese electric vehicles, advanced batteries, solar cells, steel, aluminum and medical equipment, an election-year move that is likely to increase friction between the two largest economies. big in the world.
The tariffs come amid a heated campaign between President Joe Biden and his Republican predecessor, Donald Trump., in which both candidates compete to show who is tougher on China.
The tariffs are unlikely to have much of an inflationary impact because of how they are structured, administration officials said. They explained that they believe the tariffs will not increase tensions with China, but they hope China will explore ways to respond to new taxes on its products. It’s unclear what the long-term impact on prices could be if the tariffs contribute to a broader trade dispute.
The tariffs will be phased in over the next three years, with those coming into effect in 2024 covering electric vehicles, solar cells, syringes, needles, steel and aluminum, and more. There are currently very few electric vehicles from China in the United States, but officials are concerned that low-priced models made possible by Chinese government subsidies could soon begin flooding the U.S. market.
Asked if Canada was considering similar measures, Trudeau responded: “We’re obviously watching closely what our closest trading partners in the United States are doing.”
– with a file from The Associated Press
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