NextStar: Massive Federal Investment Warrants Difficult Questions

(Image courtesy of CBC)

The NextStar Energy project is a recipient of one of the largest government grants to a for-profit private entity in Canadian federal history, a staggering $500 million. There is a total lifetime estimate of billions being poured into it, in conjunction with both the federal and Ontario governments. 

However, NextStar has faced scrutiny over the years since it was approved in 2022, for allegedly planning to prioritize foreign workers over local, Canadian ones. With the looming threat of America’s tariffs on our auto industry in addition to these job concerns, it is critical to look at what this massive investment from the federal government entails.

The Project

NextStar is a large-scale electric vehicle battery manufacturing plant located in Windsor, Ontario, a joint venture between the Netherlands’ Stellantis and South Korea's LG Energy Solution, with $500 million being promised by the government in the fall of 2022. 

Completion of the plant is almost done, and full battery production is expected to begin by the end of 2025. It is supposed to create 5,100 new jobs in the community, half of them directly employed at the plant itself, according to a Workforce WindsorEssex report.  

However, this project has been a source of controversy over the years, with eyebrows being raised over such a large investment being poured into two foreign companies over local Canadian automakers. 

A Checkered Development

Towards the end of 2023, there was an outcry over the NextStar project hiring 900 South Korean workers instead of filling those positions with Canadian labourers. This also prompted a heated exchange between former Prime Minister Justin Trudeau and Conservative Leader Pierre Pollievre in parliament at the time. 

In the spring of last year, Canada’s Building Trades Union wrote a scathing letter to Trudeau, asking for his intervention with the executives of the NextStar project to prevent local workers from being sidelined. There was frustration expressed over why the federal and Ontario governments would pour an exuberant amount of money into foreign companies that weren’t prioritizing Canadian personnel. 

This is especially concerning as the Windsor-Essex area has one of the highest jobless rates in Canada, clearly in need of an employment boost provided by such a large project.

With the current Prime Minister Mark Carney’s announcement of $2 billion dollars to protect Canada’s auto industry from America’s automobile tariffs levied at the beginning of April, one can only hope that this fund prioritizes Canadian auto workers and industry.