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NGA - Legault and Trudeau reunited for Lion

Link:
https://www.lapresse.ca/affaires/entreprises/2021-03-13/usine-de-batteries-electriques/legault-et-trudeau-reunis-pour-lion.php

The Premier of Quebec and the Premier of Canada will meet to announce funding for an electric battery factory

Posted on March 13, 2021
Richard DufourRICHARD DUFOUR
PRESS

Tommy ChouinardTOMMY CHOUINARD
PRESS

For the first time in more than a year, François Legault and Justin Trudeau will meet in person on Monday to jointly announce the financing of a battery plant project from the Quebec builder of electric urban buses and trucks Lion, has learned The Press . It is a total investment of around $ 180 million.

The Prime Minister of Canada and his counterpart from Quebec will come together in an exceptional way. Their most recent meeting dates back to 2019, months before the pandemic. Of course, they have been meeting virtually on a regular basis with the premiers of other provinces since the onset of the health crisis.



The announcement will take place at the Palais des congrès de Montréal - one of the only places, along with the auditorium of the Bibliothèque et Archives nationales du Québec, where Public Health allows government announcements in this red zone. The Palais des congrès is also used for the vaccination campaign in the metropolis, but MM. Legault and Trudeau will be in a remote area that is not occupied by Public Health.

The financial package of the project which will be announced is complex. Basically, Ottawa will provide assistance in the form of grants, while Quebec's contribution will be a “forgivable loan”. Forgiveness will be tied to the creation of jobs by Lion.

The forgivable loan granted to Lion will therefore be different from that which has just been granted to Alstom by the Legault government. Alstom obtained a loan which does not have to be repaid if a number of jobs at the plant are maintained for a certain number of years.

Lion revealed last fall that she planned to build a battery factory in the very short term, a project valued at nearly $ 200 million. Funding for the project was yet to be determined, and the location of the plant had yet to be confirmed.

Batteries made in Saint-Jérôme?
The City of Saint-Jérôme agreed in November to an agreement in principle that a long lease of 25 years on a plot of more than 450 000 ft 2 would be sold to Lion. This agreement was, however, conditional on obtaining the necessary financing by the company to carry out its project. We then pointed to the federal and provincial governments.

In exchange for the right to enjoy free of this land for 25 years, and leave property tax for five years, Lion is committed to build a plant at least 150,000 ft 2 , equipped with 35 'ceilings and parking lots. It will have a purchase option of the field from the 10 th year.

The land in question is located in an industrial zone, rue De Martigny Ouest, near the intersection with the Autoroute des Laurentides.

It was not possible to get more information from Lion executives surrounding Monday's announcement.

Lion currently operates a battery production line at its vehicle assembly plant in Saint-Jérôme. However, these batteries are produced with the help of a third party.

Lion is also due to announce the location of a vehicle assembly plant in the United States in the near future. The current Saint-Jérôme plant has a production capacity of 2,500 vehicles per year.

The plan to list Lion's shares on the New York Stock Exchange also continues to progress. The start of trading under the symbol "LEV" is still expected in the coming weeks. Lion's leap to Wall Street came about through a merger with Northern Genesis, a special purpose acquisition company whose shares are already listed in New York under the symbol “NGA”.

Beyond the Lion project, there is no lack of subjects to fuel the discussion between MM. Trudeau and Legault, whose relations are not very good. There have been periodic skirmishes between the two leaders in recent months.

Other issues
François Legault rants against Ottawa's desire to establish national standards for long-term accommodation centers, for example. He had publicly expressed his impatience with the delivery dates of vaccine doses, while Mr. Trudeau had criticized the provinces for not administering them quickly enough. This is not to mention the "chicane" around the imposition of a quarantine on travelers returning from abroad.

At the top of François Legault's list of priorities in his relations with Ottawa is an increase in health transfers. Quebec is asking for $ 6.2 billion more per year, in order to reduce the federal government's share in funding spending in this sector from 22% to 35%. All the provinces are demanding a total increase of 28 billion.

This issue is crucial for the Legault government, whose budget will be tabled on March 25 - we do not yet know the date of the federal budget, while the possibility of the upcoming call of general elections looms. Quebec Finance Minister Eric Girard has already recognized that an additional federal contribution is essential to get out of the budget hole within five years. Otherwise, it would be necessary, among other things, to cut spending, he warned. The fact remains that Ottawa itself is in deficit.

Federal money has nevertheless served the Legault government well since the start of the pandemic. While Quebec's own-source revenues (mainly taxes and levies) fell 6.9% - or $ 4 billion - from April to November compared to the same period last year, transfers of all kinds from Ottawa jumped 18.6% - or $ 3 billion - with the string of announcements made by Justin Trudeau in recent months.