While the deal to continue construction of the NextStar electric vehicle battery plant in Windsor is now finalized, some experts say the back-and-forth public negotiations raise questions surrounding the city.
Public perception about the value of the $15 billion deal could depend on where people live, said Lydia Miljan, professor of political science at the University of Windsor.
“Obviously it’s going to make them look much more responsive to communities that rely on these jobs,” she said.
“However it does make them vulnerable to the taxpayer because they are also the same people who said they were going to balance the books.”
“So how they do both of those things simultaneously is going to be the real challenge.”
Miljan said the deal, and the governmet’s similar agreement with Volkswagen, could set a precedent for other companies looking to make massive investments.
Could securing the plant put a strain on Windsor’s housing market?
But the deal could have major implications in Windsor, aside from the jobs it creates.
Sean Hertel, principal urban planner of Hertel Planning in Toronto, grew up in Windsor with a family connected to the automotive industry.
“Even when times are good, things aren’t really, really great because we’re waiting for the shoe to drop,” he said.
“You wait for, ‘when’s the contract going to get renegotiated, what’s the dollar at? When’s the recession?’ … repeat. We’re always sort of holding our breath,” Hertel said.
“To me this Stellantis deal, there’s been a lot of drama leading up to it.”
“I wonder maybe that’s why we never really seem to get that big breakthrough because we’re so reliant on external forces.”
But the deal could also have impacts in the city’s housing market, Hertel said.
“What is that subsidy going to do for an already-stretched and increasingly inaccessible housing market, especially for workers? A union salary and benefits isn’t what it used to be, even 10 years ago.”
WATCH | Construction of the Stellantis electric vehicle battery plant resumes
It’s been more than seven weeks since it was learned the future of the plant being built in Windsor was in jeopardy.
In early June, Stellantis and the federal government confirmed the automaker and LG Energy Solution received an offer from Ottawa, and their financial and legal teams were mulling it over.
Stellantis announced the finalized deal Wednesday night.
Is Windsor being at the centre of a financial precedent a good or bad thing?
Bentley Allan, research director at Transition Accelerator and assistant professor in political science at Johns Hopkins University, said the deal is a big swing by the Canadian government.
“The Canadian government is making a bold statement that they’re willing to match the IRA in an area where the IRA was already very bold and ambitious,” Allen said.
The deal comes as the Ontario government initially insisted the Canadian government was on the hook to match the U.S. Inflation Reduction Act — while the federal government insisted it needed the province to step up.
In the end, the province agreed to a third of the cost, and will provide about $5 billion of the $15 billion in tax breaks the company will receive, in addition to the $500 million it had previously committed.
“It’s really significant that we kind of have a … precedent here where 30 per cent of the cost is going to be covered by the province,” he said.
“Certainly the federal government will be looking to replicate that elsewhere, although not every province has deep pockets as Ontario does.”