Montreal, Quebec
Quebec Premier Francois Legault is facing mounting pressure over his government’s investment in a planned battery factory near Montreal, as Swedish manufacturer Northvolt AB cuts costs following a slowdown in demand for electric vehicles.
Opposition Leaders Demand Transparency
Opposition leaders at the Quebec legislature on Tuesday demanded more information about the deal secured with Northvolt last year, including a "schedule of payments." The Quebec government has given Northvolt a $240-million guaranteed loan to help the company buy land about 30 kilometres east of Montreal to build its plant. The government has invested a further $270 million in Swedish parent company Northvolt AB, alongside a $200-million investment from Quebec’s pension fund manager.
Government Under Fire for Lack of Transparency
The opposition Liberals are criticizing the government for setting aside a 354-megawatt energy block for the project, which former economy minister Pierre Fitzgibbon said earlier this month could be delayed until 2028. Moshe Lander, a senior lecturer in economics at Concordia University in Montreal, said the government should provide more information about how many jobs and how much revenue the project could generate.
Government Investment in Jeopardy
The Quebec Solidaire party is calling for an emergency debate in the legislature on the project’s future, but the Speaker rejected the request. Gabriel Nadeau-Dubois, a spokesperson for Quebec Solidaire, said that Premier Legault "has played poker with the money of Quebecers, and now he seems like he might be losing the game."
Experts Weigh In
Economist Moshe Lander believes that at this point, Quebec should "cut (its) losses and run," rather than risk more public funds on a project that might never get off the ground. "They never really had an exit strategy for how they were going to get their money back, how they were going to make a return on it," he said.
Premier Legault’s Response
In response to the criticism, Premier Legault stated that his government is committed to supporting the development of the battery supply chain in Quebec. "We will continue to work with Northvolt to ensure that this project is successful and benefits the people of Quebec," he said.
The Future of the Project Uncertain
The future of the $7-billion Northvolt battery plant project remains uncertain, as the company faces significant challenges in the wake of a slowdown in demand for electric vehicles. The Quebec government’s investment in the project has been criticized for lacking transparency and accountability.
Timeline of Events
- 2022: The Quebec government signs an agreement with Northvolt AB to invest $270 million in the company.
- 2023: The company announces plans to cut 20% of its global staff, citing a slowdown in demand for electric vehicles.
- Present day: Opposition leaders are demanding more information about the deal secured with Northvolt last year.
Sources
- "Northvolt cuts 20% of global staff as electric vehicle demand slows" (Bloomberg)
- "Quebec government invests $270 million in Northvolt AB" (Reuters)
- "Opposition leaders demand transparency on Northvolt deal" (Montreal Gazette)