$80M in compensation for Central Elgin after land annexed by neighbouring St. Thomas

Nearly $80 million is changing hands in an agreement between the Municipality of Central Elgin and the city of St. Thomas for land annexed by St. Thomas to make room for a planned Volkswagen electric vehicle (EV) battery plant.

The value of the deal will come from a combination of cash and services, with a total of $15 million to be transferred to Central Elgin's coffers, and roughly $65 million in the form of wastewater treatment capacity on the table.

"What we wanted is a hybrid between compensation today, and down the road," said Central Elgin Mayor Andrew Sloan. "That treatment capacity allows us to benefit from it not today, or tomorrow, but for generations."

Last year, the province passed legislation that allowed St. Thomas to annex 607 hectares of farmland from Central Elgin to attract Volkswagen to build a massive EV battery factory. It's a move that was lauded by some as a great opportunity to bring thousands of direct, and spin-off jobs to the area and breathe new life into the local economy.

But neighbours who live on the land bordering the site have been critical to the move due to worries over what they called a lack of communication, noise, and pollution. Sloan told CBC in the past the move put strain on the relationship between his municipality and St. Thomas.

"This provides a working relationship [with St. Thomas] going forward. That was my goal," Sloan said. "At the end of the day, this [Volkswagen Plant] is an historic investment in the area"

The deal will provide a total of 7,700 cubic metres per day of wastewater treatment upon the completion of St. Thomas's upcoming wastewater treatment plant, Sloan added.

1,700 cubic metres of that water treatment capacity is to support the residential redevelopment of the former St. Thomas Psychiatric Hospital grounds in Central Elgin.

"That treatment capacity (on the former hospital grounds) alone should be enough to service 2,000 homes," Sloan said, adding that he expects the deal to help greatly with the growth that's forecast to come to the area when the Volkswagen plant opens in 2027.

"It's an opportunity for economic growth, and we want to be there and be ready," said Sloan of the Volkswagen plant.

In terms of monetary compensation, Sloan said, Central Elgin expects to receive $10 million on July 1, and the last $5 million over the course of several years beginning in 2027.