Construction of Battery Component and Assembly Plants for Electric Vehicles

Made-in-Canada Plan Ensures Energy Security for United States and Its Military

– Fernand Deschamps –

A matter of serious concern for Canadians and Quebeckers is the pay-the-rich schemes governments at the federal and provincial levels are engaged in. They are handing money over hand over fist to narrow private interests in mining and manufacturing, besides those in the health care and other public sectors, transportation, energy and communications. Public monies are handed over to narrow private interests, mostly supranational with U.S. ownership, in the name of a green economy, prosperity, and national security despite evidence that they are done at the behest of the U.S. administration and serve the U.S. war economy of which Canada has been made an appendage. 

The pay-the-rich schemes further integrate Canada into the U.S. war economy and machine, against the most fundamental desire of Canadians and Quebeckers who want Canada to be a Zone for Peace.

The Trudeau government's 2023 federal budget announced that Canada's role is "to become a clean electricity superpower with a cross-Canada electricity grid that is more sustainable, more secure, and more affordable. It must also provide essential minerals. "From the resource workers that mine critical minerals or provide clean energy to the world, to the engineers designing next generation batteries, to the autoworkers assembling the electric vehicles people want to buy, we can ensure that Canadians produce the goods and resources that Canada and our allies will need for generations to come," the promo for the budget said.[1]

Deputy Minister of Finance in Private-Public Revolving Door

Interestingly, the 2023 federal budget presented by Minister of Finance Chrystia Freeland at the end of March had been prepared by a team that included Michael Sabia, appointed Deputy Minister of Finance in the Trudeau government in December 2020. According to Le Devoir, "He had his hands in the creation of the Goods and Services Tax (GST), was in turn Deputy Secretary to the Cabinet at the Privy Council Office, number two at Canadian National, head of Bell Canada and President of the Caisse de dépôt et placement du Québec" and until December 13, 2020, held "the position of Chairman of the Board of the Infrastructure Bank of Canada." "Since February 2020, Michael Sabia has also been Director of the Munk School of Global Affairs and Public Policy at the University of Toronto." The Munk School is a think tank co-founded by Janice Gross Stein, who in 2022 co-chaired Canada's Indo-Pacific Advisory Committee, which aims, among other things, to target China and engage in military exercises to provoke China.[2]

Michael Sabia was appointed CEO of Hydro-Québec on August 1, 2023 by Francois Legault's government to succeed Sophie Brochu, who left her post on April 11, 2023. In a radio interview on October 12, 2022 she openly said that she doesn't want Hydro-Quebec to become the "Dollarama" of electricity for huge private interests whose eyes are riveted on Quebec because Hydro-Québec can also generate what qualifies as "sustainable green energy." She said: "What we should not be doing is attracting an undue number of industrial kilowatt-hours wanting to pay cheap rates, and after that to be saying to ourselves: We'll have to build dams to power them because we lack the energy." 

One of the mandates entrusted to Michael Sabia is to find "clean" electricity to power all the future plants being set up in Quebec for the production of battery components (anodes and cathodes) and their assembly into a final product that will have both civilian and military applications.

Proof of the stranglehold of private interests on governments is illustrated in concrete terms by the most important element of the federal budget: $80 billion in subsidies to large corporations and their private companies to invest as they see fit in "low-carbon electricity, manufacturing and other elements of a clean economy." Private companies will be able to access federal public funds – which account for up to 40 per cent of federal government spending – as they see fit. The budget states that "the approach is not intended to substitute government for the private sector, nor to supplant market-based decision-making." In short, the people pay, but "the market" decides. Hardly a week goes by without government officials announcing, in one form or another, subsidies to private enterprises.

Announcements of Component and Battery Assembly Plant Construction in Ontario and Quebec

The announcements in 2022 and 2023 that the Stellantis Group and LG will build battery manufacturing plants in Windsor, and Volkswagen in St. Thomas, Ontario, were accompanied by billions of dollars of pay-the-rich schemes to build the plants and produce the batteries.

The Windsor Stellantis/LG facility, for example, is expected to manufacture 400,000 batteries a year, according to a Toronto Star report. This supranational conglomerate, should it be paid the lowest amount of subsidy per battery produced ($3,600), will be paid approximately $1.44 billion in public funds per year.

Volkswagen has said its plant in St. Thomas will produce 1 million batteries annually when fully operational by 2027. Volkswagen would be paid a total $3.6 billion per year in public funds if paid subsidies at the lowest end of the range, and $6 billion at the highest. The federal government has publicly committed to around $13.2 billion in payments to Volkswagen over 10 years.

According to Pierre Fitzgibbon, Quebec Minister of the Economy, Innovation and Energy, this is "the price to pay" for complying with the conditions imposed by the U.S. Inflation Reduction Act (IRA), adopted by the Biden administration in 2022. The IRA provides a legal framework for the many pay-the-rich schemes to companies that manufacture everything the U.S. considers to be part of the so-called "green industry." Supranational companies across North America and Europe are now demanding such schemes wherever they set up shop.

From March to September of this year, U.S. car manufacturers GM and Ford, flanked by south Korean (POSCO Chemical, ECOPRO BM, SK and Volta Energy Solutions) and Swedish (Northvolt) battery component manufacturers, came to Quebec to announce the construction of plants at Bécancour, Granby and McMasterville to manufacture battery anode and cathode components and assemble these components into batteries for both electric vehicles and, eventually, other civil applications including energy storage. All have been offered generous loans and subsidies by the federal and Quebec governments to build the plants and produce the batteries.

At the August 17, 2023 press conference announcing Ford's arrival in Bécancour, Premier Legault declared among other things. "My objective in politics is to create better-paid jobs. What I want is for our young people to have challenges here and not have to go into exile to have exciting, well-paid jobs." The government and its partners are working to create a school for energy transition trades. The parties are aiming to have its doors open in September 2024. They will offer education at the secondary (DEP), college (technical) and university levels. The eight school boards in the Mauricie and Centre-du-Québec regions are involved, as are the four regional CEGEPs and the Université du Québec à Trois-Rivières.

The union Unifor presently represents 39,000 workers at Ford, GM and Stellantis assembly plants and equipment manufacturers such as engines, transmissions and wheels in Ontario. It issued a statement last August in which Unifor National President Laura Payne declared: "Ford's investment announcement in Bécancour is an important step towards the reestablishment of a stronger and more sustainable automotive industry in Quebec and Canada. Every job along the automotive supply chain has the opportunity to translate significant economic benefit not only to workers and their families, but also to its surrounding region, and our country." To show that it wants a slice of the pie, Unifor announced on October 6, 2023 that it will be setting up an office in Bécancour with a recruitment team. Already 1,000 unionized workers in the Bécancour industrial park are affiliated with Unifor.

Sleight of Hand to Circumvent Environmental Standards

In the spring of 2023, the Quebec government changed the existing regulations concerning the requirements for an environmental assessment through the Office of Public Hearings on the Environment (BAPE). The regulations had required that any project involving industrial chemical production in excess of 50,000 tonnes per year be subject to an environmental assessment in the form of public consultations. The threshold has now been raised to 60,000 tonnes. Many have said that this change was made to accommodate Northvolt, which plans to produce up to 56,000 tonnes of chemicals annually at its future McMasterville plant.

U.S. Imperialists' Interest in Securing Supply Chain for U.S. Army

The monopoly media often claim that lithium-ion batteries are being produced for electric vehicles and energy storage but military applications are rarely mentioned. According to the U.S. think tank American Security Project, "While the federal government is the largest energy consumer in the U.S., the Department of Defense (DoD) accounts for approximately 76 per cent of the government's energy expenditures. Most of the DoD's energy expenditures come from fossil fuels. Petroleum-based fuels power equipment, expeditionary bases, tactical vehicles, aircrafts, naval vessels, and other platforms. [...] The vulnerability of petroleum-based supplies continues to raise both risks and costs for the DoD. However, the DoD is becoming a substantial investor in new energy sources. [our emphasis]. New investments in alternative fuels and renewable energy can have long-term benefits for energy security by providing an alternative to oil. These investments will also play a vital role in combatting climate change by reducing the DoD's carbon footprint."[3]

The American Security Project quotes retired General David Petraeus, who led the U.S. forces in Afghanistan and was CIA director under President Barack Obama, to hammer home its point: "Energy is the lifeblood of our warfighting capabilities."

U.S. Ambassador to Canada David Cohen reiterated this point in his own way in an address to the Canadian Club of Ottawa on October 31, 2023, focusing on "Canada-U.S. relations and global partners in a changing economy and world." He recalled that Canada and the United States are "linked by their continental defence, and of course by NATO." He emphasized how climate change is a challenge for "global economic and energy security." He stressed the need to "develop new technologies and clean energy sources." He added that "critical minerals" are at the heart of the "energy transition" and that all stages of the supply chain are essential, starting with extraction, processing and manufacturing, where the U.S., Canada and what he calls "like-minded democratic countries" must collaborate.[4] He excludes China from these countries without further explanation, other than to say that Chinese processing and production of critical minerals is such that it threatens U.S. hegemony on the world scale.

To illustrate his point on the need to "deepen our economic integration," Cohen said that Canadian companies are also benefiting from financing and investment opportunities thanks to the IRA and the Bipartisan Infrastructure Act of 2021. He cited the example of the Canada-based mineral exploration company Graphite One which received U.S.$37.5 million from the U.S. Department of Defense under the Defense Production Act to support the development of its graphite mine in Alaska. The Graphite One project is proposed as a vertically integrated enterprise to mine, process and manufacture anode materials primarily for the lithium-ion electric vehicle battery market. 

Ensuring energy security for the United States and its military is critical, and the role that Canada and Quebec will play in securing a supply chain for critical minerals and batteries as new sources of energy is part of those plans.

This article was published in
Volume 54 Number 2 - March 2024

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