The Canadian federal government has reportedly given over $530 million in incentives to NextStar Energy, the company overseeing a significant battery plant in Windsor, Ontario, based on records. This amount forms a fraction of the larger funding agreements with NextStar, a collaboration between car manufacturer Stellantis and LG Energy Solution from South Korea. While the federal government has committed up to $10.5 billion, the province has pledged up to $5.5 billion for the project.
The disclosed figure sheds light on the financial and contractual ties between the federal government and NextStar, especially as Stellantis revealed plans to shift production of a Jeep model from its Brampton facility to the United States. Officials have associated the NextStar agreements with job assurances at the Brampton assembly plant and hinted at potential efforts to reclaim some of the tax funds granted to Stellantis under past agreements.
Two direct funding agreements exist between the federal government and NextStar. These multi-year contracts, recently unveiled by CBC Windsor, dictate that NextStar, situated in a city with Canada’s highest unemployment rate, must employ 2,500 full-time workers and deliver other economic advantages in return for the funding.
Newly released public accounting records detail the actual funds disbursed by the federal government thus far. One agreement, signed in 2022 under the Strategic Innovation Fund, offers up to $500 million for capital expenses related to the plant’s construction. The second deal, inked in 2023, involves production subsidies amounting to a potential $15 billion, with a portion to be covered by the province.
NextStar initiated construction in 2022 and recently completed the construction phase. The plant in east Windsor has commenced battery module production and is transitioning to manufacturing cells, prioritizing energy storage systems. Quarterly claims for federal funding are part of the contract terms, with disbursements tied to the plant’s output and sales.
Despite challenges and shifts in production plans, the funding agreements with NextStar are set to shape the future of battery manufacturing and electric vehicle technology in Canada.