The federal government is warning automaker Stellantis about possible legal action if the company fails to “respect its obligations” to Canadians, following an agreement that promised billions in performance incentives.
Industry Minister Mélanie Joly sent a letter on Wednesday to Stellantis CEO Antonio Filosa, voicing “extreme concern” regarding the company’s decision to shift production of its Jeep Compass model from the Brampton, Ont., assembly plant to one in Belvidere, Ill., as shared with and later posted on Joly’s social media.
This move was revealed on Tuesday evening as part of a $13 billion US investment into the automaker’s operations in America. Filosa mentioned to CNBC on Wednesday that the company supports U. S. President Donald Trump’s vision for a “strong” automotive sector in the country.
A 25 percent tariff on Canadian automotive parts and vehicles was imposed by the U. S. back in April, although there’s an exemption for U. S.-made parts.
“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 her 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.”
WATCH | Ottawa threatens to sue Stellantis for moving production to U. S.:
Ottawa threatens legal action against Stellantis
Canadian politicians across parties expressed anger and frustration over Stellantis relocating Jeep production from Brampton, Ont., to Illinois – prompting Ottawa to consider legal measures.
The company had previously signed an agreement with both federal and Ontario provincial governments two years ago that outlined up to $15 billion in performance incentives-conditional upon meeting certain requirements including maintaining a production mandate at Brampton.
Stellantis committed to keeping its “full Canadian footprint, including Brampton,” in exchange for significant financial support,” Joly wrote. “Any failure to uphold that commitment will be seen as a default under our agreements.”
The minister noted during a press conference on Wednesday that Ottawa has been “engaging with the company for months now,” aware that retooling at the Brampton facility was upcoming. The plant has been inactive since 2023 while it undergoes updates for new vehicle models.
“We’ve invested millions of dollars into that facility based on their commitment they would be investing in a new model; that’s why if they don’t follow through, we’ll hold them accountable,” she stated.
The auto pact between Stellantis and both levels of government was announced back in 2023. A similar arrangement was made between both governments and Volkswagen along with its subsidiary Power Co., aimed at establishing an EV battery manufacturing site in St. Thomas, Ont., which includes up to $13 billion in incentives.
Ottawa indicated it would contribute two-thirds of this funding while Ontario would cover the remaining portion.
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Stellantis’s assembly plant is pictured in Brampton, Ont., on Wednesday. (Evan Mitsui/CBC)
However, this agreement depended on several conditions being met-including maintaining existing commitments within Canada like fulfilling production requirements at Brampton plant.
An Ontario Premier Doug Ford spokesperson told that Stellantis’s Brampton facility failed to meet auto pact conditions regarding project milestones and job creation.
As such, no provincial funds have been provided yet according to them.
“I’m not going to give them a penny” for the Brampton plant,” Ford said during a news briefing on Wednesday but added they had received $55 million for their Windsor facility “out of the couple billion that the feds and I agreed [to].”
` A spokesperson from Stellantis mentioned initially via statement on Wednesday that there are plans concerning their Brampton plant which they’d discuss with federal officials but didn’t share any specifics.| followed up seeking clarification about how much financial aid – if any – they received from either level of government or whether they breached auto pact terms should nothing come through.
A representative explained no comment would be given regarding details around agreements.
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Ottawa threatens legal action against Stellantis
Canadian politicians across parties expressed anger and frustration over Stellantis relocating Jeep production from Brampton, Ont., to Illinois – prompting Ottawa to consider legal measures.
The company had previously signed an agreement with both federal and Ontario provincial governments two years ago that outlined up to $15 billion in performance incentives-conditional upon meeting certain requirements including maintaining a production mandate at Brampton.
Stellantis committed to keeping its “full Canadian footprint, including Brampton,” in exchange for significant financial support,” Joly wrote. “Any failure to uphold that commitment will be seen as a default under our agreements.”
The minister noted during a press conference on Wednesday that Ottawa has been “engaging with the company for months now,” aware that retooling at the Brampton facility was upcoming. The plant has been inactive since 2023 while it undergoes updates for new vehicle models.
“We’ve invested millions of dollars into that facility based on their commitment they would be investing in a new model; that’s why if they don’t follow through, we’ll hold them accountable,” she stated.
The auto pact between Stellantis and both levels of government was announced back in 2023. A similar arrangement was made between both governments and Volkswagen along with its subsidiary Power Co., aimed at establishing an EV battery manufacturing site in St. Thomas, Ont., which includes up to $13 billion in incentives.
Ottawa indicated it would contribute two-thirds of this funding while Ontario would cover the remaining portion.
An Ontario Premier Doug Ford spokesperson told that Stellantis’s Brampton facility failed to meet auto pact conditions regarding project milestones and job creation.
As such, no provincial funds have been provided yet according to them.
“I’m not going to give them a penny” for the Brampton plant,” Ford said during a news briefing on Wednesday but added they had received $55 million for their Windsor facility “out of the couple billion that the feds and I agreed [to].”
` A spokesperson from Stellantis mentioned initially via statement on Wednesday that there are plans concerning their Brampton plant which they’d discuss with federal officials but didn’t share any specifics.| followed up seeking clarification about how much financial aid – if any – they received from either level of government or whether they breached auto pact terms should nothing come through.
A representative explained no comment would be given regarding details around agreements.
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