Quebec’s Economy Minister, Christine Fréchette, confirmed that most of the money Quebec taxpayers spent on Northvolt’s proposed battery plant is now lost after the Swedish parent company went bankrupt.
Northvolt declared bankruptcy on March 12 in Sweden, making it the largest corporate collapse in the country’s modern history.
Sweden’s right wing Sweden Democrats is calling for a government investigation into the bankruptcy, citing the significant amount of state funds invested in the company and the resulting mass job losses.
This failed investment was part of a $2.9 billion subsidy from Quebec and $4.4 billion from the federal government to build an EV battery ‘giga-factory’ on the outskirts of Montreal.
Additionally, Quebec granted Northvolt $240 million to purchase land, which, according to Minister Fréchette, is secured by security interests and assets in Northvolt’s North American subsidiary.
Parti Québécois opposition member Pascal Paradis criticized Premier François Legault for previously claiming in the legislature that Quebec had a Swedish factory as collateral, a statement Paradis argues is untrue.
The exchange between Fréchette and Paradis failed to clarify how much of the government’s investment retains any value under the current circumstances.
While Northvolt’s North American subsidiary remains active, its future is uncertain and dependent on the Swedish court-appointed trustee overseeing the parent company’s bankruptcy process.
Unlike Canada, Sweden’s government did not provide major subsidies to Northvolt last year despite its financial struggles.
A Parliamentary Budget Office report last year found that Liberal government subsidies in the electric vehicle sector exceed private capital investments by 14%, with total subsidies amounting to $52.5 billion.