Ottawa threatens Stellantis with legal action over Brampton plant reversal
The federal government is threatening automaker Stellantis with legal action if the company doesn't "respect its obligations" to Canadians, according to a copy of a letter obtained by CBC News, years after the company agreed to an auto pact promising billions of dollars in performance incentives.
Industry Minister Melanie Joly wrote to Stellantis chief executive officer Antonio Filosa on Wednesday to express "extreme concern" over the company's plan to move production of its Jeep Compass model from a Brampton, Ont., assembly plant to one in Belvidere, Il.
The shift was announced on Tuesday evening as part of a $13 billion US investment into the company's American manufacturing operations. The company shares U.S. President Donald Trump's goal of having a "strong" automotive sector in the U.S., Filosa told CNBC on Wednesday.
The U.S. imposed a 25 per cent tariff on Canadian automotive parts and vehicles, with a carveout for the value of U.S.-made parts, back in April.
"While the current U.S. tariff environment is creating complex challenges, Stellantis has made important commitments to Canada and to its workforce," Joly wrote in the letter.
"Should Stellantis choose not to respect its obligations, we will act in the interest of all Canadians and hold the company to full account, and exercise all options, including legal."
The company had entered an agreement with the federal and Ontario provincial governments two years ago that both would provide up to $15 billion in performance incentives — contingent on the automaker meeting a set of conditions that included fulfilling a production mandate in Brampton.
Stellantis agreed to maintain its "full Canadian footprint, including Brampton, in exchange for substantial financial support," Joly wrote in her letter. "Anything short of fulfilling that commitment will be considered as default under our agreements."
The minister, during a press conference on Wednesday, said that Ottawa has "been engaging with the company for months now, knowing that the Brampton facility was going to be retooled." The automaker's Brampton plant has been idle since 2023 as it revamps its assembly line for a new generation of vehicles.
"We've invested millions of dollars in that facility based on the commitment they would be investing in a new model, and so that's why if they don't do so, we'll hold them to account," the minister said.
The auto pact between Stellantis and the federal and Ontario provincial governments was announced back in 2023. Both governments struck a similar deal with Volkswagen and its subsidiary, Power Co., for an EV battery manufacturing plant in St. Thomas, Ont., with up to $13 billion in incentives on the table.
Ottawa said it would put up two-thirds of the funding, with the Ontario government providing the rest.
But the agreement was contingent on several conditions, including that the automaker uphold its existing commitments in Canada — such as fulfilling its production mandate at the Brampton plant.
A spokesperson for Ontario Premier Doug Ford's office told CBC News that the company's Brampton plant did not meet the conditions set under the auto pact, specifically those related to project milestones and jobs creation.
The company has therefore not received provincial funding, the spokesperson said.
"I'm not going to give them a penny" for the Brampton plant, Ford told reporters during a Wednesday news conference. But he added that the company had received $55 million for its Windsor plant "out of the couple billion that the feds and I and the companies agreed [to.]"
A Stellantis spokesperson said in an initial statement to CBC News on Wednesday that the automaker has plans for its Brampton plant that it would discuss with the federal government, but did not provide any details.
CBC News followed up to ask for clarification on how much money — if any — the company has received from the federal or Ontario provincial government, and if it hasn't, whether it broke the conditions outlined in the auto pact.
The company does not comment on the details of its agreements, the spokesperson said.
cbc.ca
