In his latest visit to eastern Ontario, Vic Fedeli, Minister of Economic Development, Job Creation and Trade, stated that electric vehicle (EV) production is a bet he is confident making, despite slowing EV sales in North America.
Fedeli was in Kingston Wednesday, Aug. 21, 2024, to tout over $37 million in investments at two Kingston-based companies. The minister said the projects are “strengthening local manufacturing and driving economic growth in the region,” and he expects at least one of them will support the growing electric vehicle (EV) manufacturing sector he and his government have set their sights on dominating.
Fedeli pointed to 2018, when the Progressive Conservative (PC) government took office in Ontario, saying that since then, “our government has been working literally around the clock to strengthen our economy and foster the right conditions for businesses to want to grow and succeed right here at home.”
“The results,” he enthused, “have been absolutely unprecedented.”
“Since taking office, material businesses have added more than 800,000 new workers and new jobs in Ontario; that is just spectacular. This year alone, we’ve seen companies hire 160,000 new workers,” he said.
“So this is just something we’ve never seen in Ontario. Since we’ve been targeting EV and auto deals, they have attracted $44 billion in four years. And I’ll let you in on the worst-kept secret: We’re going to hit 50 billion this year without fail.”
Not everyone is as excited about the investments as Fedeli. Last week, Fedeli was part of a contingent, along with the Prime Minister and Premier, announcing a $575 million dollar plus project to expand the Goodyear plant in Napanee.
As is often the case on social media, Ontarians with opinions on the future of EVs were quick to share them. Comments like, “Meanwhile other automotive giants realize EV’s are not the future and are investing more into making internal combustion engines even more efficient and more eco friendly. Seems like a waste of money,” and, “Now we can link the article about them not building the battery plant outside of Odessa due to lack of demand from EV sales, lol. Our tax dollars at work,” received several likes and upvotes, while many argued back.
Kingstonist asked the minister what he would say to “naysayers online, saying there’s been some slowing down in the EV market.”
“Well, I would say we’ve landed $44 billion here in Ontario. These are multi-billion dollar decisions being made by multinationals from all around the world. This is their money that they’re investing,” Fedeli responded.
“There are [EV] mandates around the world, and there are so many benefits to the electric vehicle. We have made cars exactly the same way for 125 years; this is the first time we’ve shifted the technologies. It’s now a computer on a set of wheels, and that’s really what a car is today — Completely different than the internal combustion engine and a power train… There will always be hiccups with new technology, no question. But worldwide sales in EVs were up 31 per cent last year. We see a tremendous future.”
Fideli took the answer another step forward, saying, “But let’s look at what could have happened if we hadn’t attracted EV manufacturing. I think that’s even more important here in Ontario.”
He noted that, prior to 2020, both Ontario and Australia had a chance to invest in EVs and, “Australia said no, and went downwards; they’re completely out of the auto business.”
“When Premier Ford got elected,” he continued, “every one of the auto companies had no future product lined up. That means every one of them, like General Motors, would be closing in Ontario, risking — more than risking — ending jobs for a hundred thousand men and women just in the auto assembly.”
And so, the Ontario government invested in finding out what the problem was and fixing it, he stated, “and then the future products happen to all be in electric vehicles.”
According to Fedeli, the companies all said the same thing: the costs in Ontario are too high. The premier said to the cabinet and caucus, “We are going to do everything we can. We are going to lower taxes, we’re going to cut costs,” Fedeli said, giving the example of the Workplace Safety and Insurance Board (WSIB), “we left the benefits in place but cut the premiums by fifty per cent. That’s a two-and-a-half billion dollar savings just there alone.”
He also noted accelerated capital cost, pointing out that he announced on December 10, 2018, that the province will match the federal capital cost allowance.
“We put them off a year — a billion dollar savings. And I can go on and on, but it adds up to what we presented for the companies: here it is, lower costs by eight billion dollars a year is what we’re offering you and, one by one, [they came back],” he recalled.
“You’ve got GM back in Oshawa, the fastest build they’ve ever had in the history of General Motors in 125 years. They’re back now, they have three shifts, making the Silverado, 2,700 men and women work there… One by one, these companies all said they will make their next product in Ontario. They all happen to be electric vehicles. And this is where they made their bets. This is where we slid our chips all in on the electric vehicle sector.”
But what about Umicore? After breaking ground on a multibillion-dollar battery plant in Loyalist in October 2023, the global materials technology and recycling group put a pause on that plan just 10 months later. Citing “recent significant slowdown in short- and medium-term EV growth projections,” the Belgium-based company said a number of efficiency, cost, and strict capital allocation discipline measures have been initiated, including limiting the company’s capital expenditure for 2024 to below € 650 million (approximately $976,212,250.00 CAD).
Umicore stated at that time that, as part of “maximizing capacity utilization of existing assets, before considering any further expansion,” the company is “assessing the configuration of its existing footprint in Asia and Europe, as well as its expansion project in North America,” and, “pending the outcome of this review and keeping options open, Umicore is delaying spending on the construction of its battery materials plant in Loyalist, Canada.”
Fedeli admitted, “They have paused the plans in Loyalist. But look, we are very confident that once they do their assessment and look worldwide at what’s happening, the reality is, we have three battery plants that all need what they’re going to make at Umicore in Loyalist, and we are very confident that they will decide to continue here once the worldwide reassessment is done.”
He pointed out that the “strategic review” Umicore has undertaken is a worldwide review, noting “we’re very confident that, once the lens focuses here in the Ontario plant, they’ll be reminded that, at the time they announced, there was one, since then two, and now, three battery plants [that] need their product. So we’re highly confident.”
Regardless, he pointed out that the plant is still years away from opening, “so if you look at their site today, you’ll still see equipment that they’re still working there. So the pause is not an on-the-ground pause, it’s a pause about what they want to do worldwide. So, I would say the timing is going to be unchanged. They’re still working on site and making their decisions. Thirty- to forty-thousand jobs are being created in the EV sector in southern Ontario. So I would say prospects are extremely high,” despite not having a clear timeline from Umicore.
“Employment in the manufacturing sector is at one of the highest levels we’ve seen in 15 years,” Fedeli reiterated, “so, all of the things that we’ve done, from bringing employees back, to bringing companies here — last year was 137 foreign direct investments, 137 companies from around the globe moved here to Ontario and invested here, bringing $11 billion and 12,500 employees, just those companies alone — so it’s spectacular stats.”
What is it about eastern Ontario that is attracting all of this investment? Fedeli said, “It’s the talent here. This remarkable area produces extremely well-educated young men and women ready to challenge these jobs. We graduate 7,000 STEM grads — science, technology, engineering, and math grads — every year in Ontario. We’re seeing this in the EV sector, the mobility sector, and the life sciences sector; we attracted $4 billion in life science because they know we have that talent in Ontario. In the tech sector, tens of billions have been attracted to Ontario because we have so many well-trained, well-educated men and women here.”
“In Ontario, the level of education is higher than in any other OECD [Organization for Economic Co-operation and Development] jurisdiction,” the economic development minister concluded.
“This is where the talent resides, and that’s why they are here.”
