The Canadian federal government has disbursed over $530 million in incentives to NextStar Energy, the company operating a significant battery plant in Windsor, Ontario, according to records. This amount represents a fraction of the multi-billion dollar funding agreements with NextStar, a partnership between Stellantis and LG Energy Solution. The federal government is committed to providing up to $10.5 billion, while the provincial government has pledged up to $5.5 billion for the project.
The specifics of the financial and contractual connections between the federal government and NextStar have come under intense scrutiny since Stellantis disclosed plans to relocate production of a Jeep model from Brampton to the United States. Federal officials have tied the NextStar agreements to job assurances at the Brampton assembly plant and have suggested the possibility of reclaiming some of the tax funds granted to Stellantis over time as part of the deals.
There are two direct funding contracts between the federal government and NextStar. Recent reports from CBC Windsor unveiled redacted copies of these multi-year contracts, revealing that NextStar, situated in a city with Canada’s highest unemployment rate, has committed to hiring 2,500 full-time staff and delivering economic benefits in exchange for the funding.
A detailed analysis of public financial documents shows the actual disbursement by the federal government to date. The initial agreement, signed in 2022, involves up to $500 million through the Strategic Innovation Fund, managed by the industry department. The federal government has already paid out at least $490 million of the committed amount, primarily for capital expenses linked to the plant’s construction phase, which was completed in September.
Furthermore, a second federal agreement signed in 2023 provides for up to $15 billion in production subsidies, with a portion to be funded by the province. This deal was reached after NextStar paused construction of the battery facility in Windsor to secure additional public funding, amidst incentives offered by the U.S. government for electric vehicle projects.
The production at the Windsor plant has commenced, with NextStar announcing the start of cell manufacturing activities. Quarterly claims for federal funding are required under the contract, with disbursements tied to the plant’s production and sales performance. The document indicates that the federal government had paid approximately $40.4 million to NextStar based on filed claims.
The federal government has been reluctant to disclose specific funding amounts paid to NextStar, citing confidentiality and competitive concerns. However, public records suggest significant financial support for electric vehicle battery manufacturers, with NextStar being a prominent recipient. As the funding agreement extends until 2032, the total amount of support for NextStar is expected to increase in the coming years.