MONTREAL—Canada has reached an agreement with carmaker Stellantis to immediately resume construction of a battery plant, ministers announced Wednesday, after the project was suspended over a subsidies disagreement.
The plant in Windsor, Ontario, a Can$5 billion (US$3.8 billion) joint venture to supply EV batteries for a significant portion of the North American market, was billed by Ottawa as the largest-ever investment in the country’s auto sector.
But Stellantis suspended the project in May, saying the federal government had not delivered promised subsidies.
On Wednesday, Canadian Deputy Prime Minister Chrystia Freeland announced an agreement had been reached.
“This agreement is good for workers and good for Canada,” Freeland said in a statement shared on Twitter.
Stellantis said in a separate statement that construction of the plant could resume “as of now”, and that battery production was scheduled to begin in 2024.
“This collective effort made the agreement possible, and we are now resuming construction at the Windsor site,” said Mark Stewart, Stellantis’ COO for North America.
Ottawa has made considerable efforts in recent years to attract investment in its electric vehicle sector, touting tax incentives and clean energy subsidies.
Canada’s strategy is in line with that of its biggest trading partner, the United States, whose Inflation Reduction Act (IRA) provides billions in subsidies for green industries.