Government moves to recover $260 million loan as it abandons stalled $7 billion project near Montreal
Quebec’s Caisse de dépôt et placement du Québec has lost its $200m investment in Northvolt after the Swedish parent company filed for bankruptcy, marking a significant setback in the province’s push to develop a battery industry.
The failed $7bn project near Montreal had been described as the largest private investment in Quebec’s history, according to CBC News.
The Quebec government confirmed it spent $510m on the venture, including a $270m investment in the Swedish parent company that was also lost, reported The Canadian Press.
Ottawa had pledged up to $4.4bn in support, while Quebec committed as much as $2.9bn, but construction never began.
Economy Minister Christine Fréchette announced Tuesday that Quebec is withdrawing all support for Northvolt Batteries North America.
“Since the company did not present a satisfactory plan with respect to Quebec’s interests, we are asserting our rights to recover the maximum amount of our investment,” Fréchette said in a statement reported by CBC News.
The province has filed court documents stating that Northvolt’s North American branch owes more than $260m on a government loan used to purchase land for the factory, as per CTV News.
Quebec is seeking to withdraw nearly $200m from frozen accounts and is asking the court to authorize a sale or repossession of the land.
Northvolt Batteries North America called the decision “regrettable,” adding it was not bankrupt and still had “solid financial resources to relaunch the project,” reported The Canadian Press.
The company said it had been in discussions with potential buyers until this week.
American battery startup Lyten, which acquired Northvolt’s European assets, also explored taking over the Quebec site.
But Catherine Pelletier, spokesperson for Fréchette, told The Canadian Press that Lyten’s funding requests were “disproportionate” and the province would not risk more taxpayer money.
Lyten’s chief marketing officer Keith Norman said the company accepted Quebec’s decision but would still be open to working with the government.
The project, announced in September 2023 at an event attended by then-prime minister Justin Trudeau, bypassed environmental reviews and was expected to create 3,000 jobs, reported CBC News.
Quebec had also allocated 352 megawatts of power for the plant, which will now be redirected.
Fréchette insisted the collapse of the Northvolt venture does not undermine Quebec’s wider battery industry.
She said nearly 3,000 people are currently building battery plants in Bécancour and added the sector remains “very much alive,” as per The Canadian Press.
Opposition parties pointed to planning and execution failures.
Quebec Liberal Leader Pablo Rodriguez said, “We’ve put all our eggs in one basket. It’s a failure both in terms of planning and execution.”
Québec Solidaire’s Ruba Ghazal described the project as “yet another CAQ fiasco,” while Parti Québécois MNA Pascal Paradis said it was “poorly planned, mismanaged and poorly negotiated,” according to CBC News.
