Battery mega-factory: Northvolt is entitled to a special agreement on its local taxes

After billions in state aid, the battery company Northvolt is now entitled to a special agreement on local taxes.

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“Could we initiate a discussion in the coming days to receive your proposal and reach an agreement on local taxes?” wrote a Northvolt manager last June to the general manager of McMasterville in an email he sent due to the Act on access to documents from public bodies.

Battery mega factory Northvolt is entitled to a special agreement on

City of McMasterville

In a press release issued Tuesday morning, the cities confirmed negotiations with Northvolt to set a specific tax rate.

It is “absolutely extraordinary” that the two cities in which the factory is to be built are negotiating a specific tax rate for a company, says local tax expert Mario Paul-Hus.

“I’m a little surprised. In my memory, this is the first time I have seen a bill setting a tax rate. It really seems like we are rolling out the red carpet for this company,” commented the senior partner of Municonseil Rechtsanwälte.

Keep in mind that Northvolt is already benefiting from almost unprecedented government aid, the value of which could exceed $7 billion.

Unknown tariff

In addition, this tariff will not be published until the end of 2024, when the agreement will be officially concluded, explained Stéphanie Plamondon, spokeswoman for Saint-Basile-le-Grand. It is therefore not yet possible to estimate to what extent Northvolt could benefit from this previously secret agreement.

In an interview, the mayor of Saint-Basile-le-Grand, Yves Lessard, assures that the tariff paid by Northvolt will be “similar to the one we already have”, but refuses to specify it.

But the “rate is not static” and therefore could change over time as we become aware of the size of the newcomer’s tax contribution, he also said.

“A city is not there to make money,” Mr. Lessard stressed, while also assuring that Northvolt would have “no gifts.”

Private bill

To achieve their goals, cities must submit a private bill to the National Assembly. The cities commissioned a law firm to prepare the plan. A deputy must also be appointed to present the legislative document to Parliament.

While we shouldn’t assume that the deal will be bad for either city, its confidential nature could still prove problematic.

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“There is a risk of confronting people with a fait accompli,” explained Mr. Paul-Hus,

In addition, it is “obvious” that the social acceptance of the project could be at risk if the cities do not reach an agreement that is satisfactory to citizens.

“Especially since it is not clear whether people believe so much in the economic benefits,” added the local tax expert.

No tax holiday, assures Northvolt

For their part, the two municipalities explained that the current legal framework is not suitable for this project and therefore new rules must be established.

“As this is a very large company, the impact of taxes on the city’s revenue is so great that the municipal tax law is not suitable for these types of projects,” the two cities said in a press release.

The fact that the factory will be located between two communities would also have encouraged cities to use this passage.

For its part, Northvolt denies seeking a “tax exemption” and assures that it will make a fair contribution to its tax burden.

“It is important to put this decision in context: no commercial property at a single location [n’aura] “A municipal assessment that is just as important as the one expected for Northvolt,” said Emmanuelle Rouillard-Moreau, spokeswoman for the Swedish company.

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