Ontario and the Feds have come to an agreement on funding the Stellantis EV battery plant in Windsor. Martin Regg Cohn writes:

So why did the premier and the prime minister dig so deep? And deeper still?

They couldn’t risk Stellantis pulling up stakes — and pulling the rug out from the rest of the auto sector.

There is no simple political calculus, no easy economic calculation for placing so big a bet in so broad a bidding war. You do what you have to do.

Or you do nothing at all. And watch the sector spiral into nothingness.

When the provincial and federal governments first ponied up a witch’s brew of sweeteners and concessions to lure a Stellantis electric vehicle battery plant last year, it seemed like a good idea at the time. At a good price.

But then things changed:

Once U.S. President Joe Biden opened the door to massive subsidies for American EV battery-making, the corrosive effect was always going to leach into Canadian decision-making. With a better offer over the border, you can’t blame Stellantis for holding us over a barrel.

Why put itself at a competitive disadvantage knowing its rivals would gain an edge? Why would we?

When the carmaker downed tools, suspended construction and made plans to relocate to the highest bidder, it wasn’t bluffing. Stellantis wasn’t so much putting a gun to our head as it was pointing the way to its next move — as logical as it was inevitable.

As the company’s CEO Carlos Tavares told my colleague Rob Ferguson this week, he had to make a rational business decision in a world where everyone wants to come out on top. It’s also a defensible governmental decision in a world where no one wants to hit bottom.

To be sure, labour and business both will cheerfully if optimistically tally up the potential multiplier effects of a car sector that generates spinoff jobs throughout the economy — from mining of rare minerals to assembly of commonplace auto parts. Multipliers don’t always add up, but they are not nothing.

Which is why Unifor, which represents auto industry workers, lavished praise on two politicians from two different parties it doesn’t always love.

“Thousands upon thousands of workers’ livelihoods were hanging in the balance throughout this dispute,” said Lana Payne, president of the country’s largest private sector union. “We would like to thank Prime Minister (Justin) Trudeau, Premier Doug Ford and the company.”

Such is the world we live in.

Image: The Toronto Star