OTTAWA—The deal to lure Volkswagen’s giant electric vehicle battery plant to Canada will cost the federal treasury $16.3 billion, the Parliamentary Budget Office estimates.
In a new report released Wednesday, the PBO says that over the life of the agreement — which promises to match U.S.-style subsidies until 2033 — the cost to land the German carmaker’s “gigafactory” in St. Thomas will likely be $3 billion more than Ottawa has publicly announced.
They just lie and lie and lie …
Chrystia Freeland disputes report VW deal will cost $16.3B — $3B more than publicly announced
… But it could cost more than expected because in order to level the playing field with the U.S. — as the federal Liberals have promised — Ottawa would have to give VW tax breaks on future corporate income taxes, which it calculates at another $2.8 billion.
That’s because Canada’s income tax law “stipulates that any amount of money received by a business from a government in the form of a contribution, grant, or subsidy is included in the consideration of income if that amount has not been deducted from the capital cost of property acquired … and is therefore subject to applicable corporate income taxes,” the PBO said.
