As Volkswagen plans to expand in Chattanooga and Puebla, the Canadian government is loaning €400 million ($433.8 million USD) to the German automaker in exchange for possible future supplier business.
Export Development Canada, a Crown corporation (an entity owned entirely by the Government of Canada), announced the “financing is designed to create opportunities for qualified small and medium-sized Canadian companies to win new business with the global automotive giant as they grow their operations in North America.” The loan is being extended to Volkswagen with “market-rate interest and administrative fees.”
“There’s no doubt Canada needs Volkswagen more than Volkswagen needs Canada,” said Phil Taylor, spokesperson for EDC, to the Windsor Star.
The financial agreement gives smaller Canadian companies exposure to Volkswagen as they tool up their North American operations for future product. Suppliers can register their products or services on a website run by EDC.