Ottawa is “very confident” it can resolve a dispute with the automaker Stellantis if the Ontario government pays its “fair share,” industry minister Francois-Philippe Champagne says.

Stellantis, one of the world’s largest automakers that makes vehicles including Chrysler, Ram and Fiat, said Monday that it halted construction on a $5 billion electric vehicle battery factory in Windsor, Ont., alleging that the federal government “has not delivered what was agreed upon.”

The automaker and South Korean battery maker LG Energy Solution announced the facility last year. It was expected to create 2,500 jobs in Windsor – a hub for automotive manufacturing in Canada.

Click to play the video:

Stellantis halts construction of electric car battery factory in Ontario

All levels of government would provide financial support but the full amounts have not been disclosed. Stellantis said again Tuesday that Ottawa has not held up its end of the bargain.

The story continues below the ad

“I am very confident that we can come to an agreement with LG and Stellantis,” Champagne told reporters in South Korea on Tuesday.

“The message to our colleagues in Ontario is: pay your fair share, and we’ll end this gridlock if you want it.”

The impasse prompted Ontario Premier Doug Ford on Monday to point the finger at Ottawa, saying the federal government must support the automaker in the same way as Volkswagen.

Click to play the video:

Premier Ford calls on FBI to ‘step up’ after Stellantis halts construction of Windsor, Ont. EV battery plant

A recently announced deal for the German automaker to build an electric vehicle battery facility in St. Thomas, Ont., includes subsidies worth up to $13 billion plus a $700 million grant.

“It really worries me,” Ford said.

“We need the federal government to come to the table and show their support as they have done all along.”

The story continues below the ad

The province put up $500 million for both deals, Ford added, and is securing roads and power for the facility. The federal subsidies to Volkswagen, the government has said, were intended to allow Canada to compete with the United States, where the Inflation Reduction Act (IRA) added production subsidies for batteries.

Click to play the video:

Is Canada’s support for Volkswagen’s investment in electric battery plant worth it?

“We will go toe to toe with any state in the United States,” Ford said.

“The only thing we can’t do is go toe-to-toe with the US federal government. That’s the federal Canadian government’s job, and they can do that. We’re confident they made a promise to the people of Windsor — I was there down with the Prime Minister – now they must keep their promise to the people of Windsor.”

Champagne said the company approached Ottawa after the IRA became law in August 2022 and agreed to speak with them “in the spirit of fairness.” He said the government was open to doing so to remain competitive with the US, adding that he hoped to meet the head of LG Energy Solution on Wednesday.

The story continues below the ad

“Believe me, it’s very difficult to attract these investments. We fought very hard for them to invest in Canada and we really want them to continue to invest, and now it’s time for our friends in Ontario to pay their fair share , says Champagne.

“When we say pay their fair share is to make sure that they would be with us in terms of production support… These facilities are there for probably 50 to 100 years, so there will be a lot of economic benefits to the people of Ontario, and that’s why we think it’s only fair in the federation that the province pays its fair share when it comes to these strategic investments.”

Click to play the video:

Volkswagen EV battery plant will contribute $200 billion to Canada’s economy: Trudeau

However, Ontario Economic Development Minister Vic Fedeli said Monday that matching what the U.S. can offer is “out of our league.”

“We’re involved in capital dollars for Stellantis — so is FB, by the way, because we’ve been partners, almost 50-50 partners all the way down the line,” he said.

The story continues below the ad

“But on the operating cost, this IRA that the federal government and the states have, this is up to the federal government to match. They’ve made commitments to Volkswagen, they’ve made commitments to Stellantis and we expect them to keep those commitments.”

Click to play video: '$5 billion electric vehicle battery facility to be built in Canada's motor city'

$5 billion electric car battery facility to be built in Canada’s motor city

Meanwhile, the president of Canada’s largest private sector union also called on Ottawa on Monday to immediately resolve the Stellantis dispute.

“It’s outrageous that tens of thousands of jobs are at risk because they haven’t been able to agree on government investment,” Unifor national president Lana Payne said in a statement, adding that companies like Stellantis “don’t make threats, they make decisions.”

“Once those decisions get to a certain point down the road, they’re very difficult to reverse and we can’t afford to let these jobs slip through our fingers.”

The story continues below the ad

Click to play video: 'Canada's quest to become a major electric car player'

Canada’s quest to become a major electric vehicle player

The Canadian Taxpayers Federation said Monday the government should reject Stellanti’s demands.

“If you hand out billions of dollars in taxpayer cash to one car company, naturally the others will follow,” CTF Ontario director Jay Goldberg said in a statement.

“Taxpayers can’t afford to throw money at every company under the sun and Ottawa needs to say no before it wastes billions more.”

Ford’s appeals to the federal government follow one from mayor of Windsorwho urged Ottawa over the weekend to get a deal done.

— with files from The Canadian Press

© 2023 Global News, a division of Corus Entertainment Inc.