Ontario gives electric car battery firm $17M

A Mississauga company that makes electric car batteries will get nearly $17 million from the Ontario government, a move Premier Dalton McGuinty said was about investing in promising sectors and not about picking winners and losers.

McGuinty is promising $16.7 million to help Electrovaya create about 240 new jobs in addition to the 50 workers it currently has, while the company itself will invest nearly $95 million in its expansion.

The move follows an investment of $263 million to bring video game developer Ubisoft to Toronto in June, as well as a $23-million investment for Toronto’s Starz Animation Studio, which specializes in high-end computer-animated films, announced in May.

The premier also held an event at a Chevrolet dealership last month, promising rebates for people who buy electric cars.

But McGuinty denies the funding amounts to picking winning companies — a concept that had been promoted by former Economic Development Minister Michael Bryant, and played down by the province.

"It’s not so much land on specific enterprises, but on specific sectors and opportunities," McGuinty said at Electrovaya’s plant in Mississauga, Ont., Tuesday.

"A lot of people around the world will tell you that you’ve got to get in the game when it comes to electric batteries."

We know that’s going to be a very important part of our future, and if you look at it that way, then we have a bit of a gem here, Electrovaya.""

McGuinty said he’s known about the company and its work for some time, and it happened to put in an application that met with the government’s overall priorities.

Electrovaya’s patented battery technology lets cars drive further on a single charge than electric vehicles with other batteries — technology which will help the Liberal government attain its goal of making one out of every 20 cars driven in Ontario electric by 2020.

Last month, McGuinty announced rebates of up to $10,000 for people who buy electric cars, a move that critics warned could actually hamper the development of next-generation technology.

The plan will give buyers of plug-in hybrids and battery electric cars rebates between $4,000 and $10,000 for vehicles purchased after July 1, 2010.

One auto industry analyst said by "bribing consumers" to buy electric the government was indirectly diverting resources from other more promising technologies.

McGuinty had said in announcing the rebates that the province was looking to attract new auto production to the province and make it easier for people to buy clean cars.

At the time of the Ubisoft announcement, McGuinty defended investing in a company that grossed roughly $1.7 billion last year, arguing the province faced stiff competition to land the studio.

Digital media, he added, is a fast-growing sector that’s eclipsing the traditional media industry, "so we know that is sure-fire winner."

In a controversial speech in May, Bryant said it was time for Ontario to become more involved in its businesses and begin picking winners and losers to protect jobs, adding a U.S. stimulus package, estimated to be as high as $13 trillion was going to prompt Ontario into further investments.

McGuinty tried to temper those remarks a few days later, saying he was leery of picking specific companies to support.

Bryant eventually stepped down to take on a similar role as president and CEO of Invest Toronto.

source