Ottawa threatens Stellantis with legal action if it flips Brampton plant
The federal government is threatening automaker Stellantis with legal action if the company “does not respect its obligations” to Canadians, according to a copy of the letter obtained by CBC News, years after the company agreed to an auto settlement promising billions of dollars in performance incentives.
Industry Minister Mélanie Joly wrote to Stellantis Chief Executive Officer Antonio Filosa on Wednesday expressing “extreme concern” over the company’s plan to move production of its Jeep Compass models from an assembly plant in Brampton, Ontario, to Belvidere, Illinois.
The change was announced Tuesday evening as part of a US$13 billion investment in the company’s US manufacturing operations. Filosa told CNBC on Wednesday that the company shares US President Donald Trump’s goal of a “strong” automotive sector in the US.
The U.S. imposed a 25 percent tariff on Canadian automotive parts and vehicles in April, covering the value of U.S.-made parts.
“While the current U.S. tariff environment creates complex challenges, Stellantis has made important commitments to Canada and its workforce,” Joly wrote in the letter.
“Should Stellantis decide not to honor its obligations, we will act in the interest of all Canadians and hold the company to full account, and utilize all options, including legal.”
Industry Minister Mélanie Joly says the government is ready to sit down with Stellantis after the manufacturer announced it would move Jeep production to the US. Joly highlighted past investments in Brampton, Ontario and said the government will ‘take them into account’ while allowing for more investment opportunities.
The company reached an agreement two years ago with the federal and Ontario provincial governments that both would provide up to $15 billion in performance incentives – contingent on the automaker meeting a set of conditions that included meeting a production mandate in Brampton.
Stellantis agreed to retain its “full Canadian footprint,” including Brampton, in exchange for substantial financial support, Joly wrote in her letter. “Any failure to meet that commitment will constitute a default under our agreements.”
The minister said during a press conference on Wednesday that Ottawa “has been in talks with the company for months, knowing that the Brampton facility was being repurposed.” The automaker’s Brampton plant is idle through 2023 as it revamps its assembly lines for a new generation of vehicles.
“We have invested millions of dollars in that facility based on a commitment that they will invest in a new model, and so if they don’t do that, we will hold them accountable,” the minister said.
The auto agreement between Stellantis and the federal and Ontario provincial governments was announced in 2023. The two governments struck a similar deal with Volkswagen and its subsidiary, Power Co., for an EV battery manufacturing plant in St. Thomas, Ontario, with incentives worth up to $13 billion.
Ottawa said it would put up two-thirds of the funding, with the Ontario government providing the rest.
But the agreement was contingent on a number of conditions, including the automaker maintaining its existing commitments in Canada – such as meeting 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 does not meet conditions set out under the auto agreement, specifically related to project milestones and job creation.
That’s why the company has not received provincial funding, the spokesperson said.
“I’m not going to pay them a dime for the Brampton plant,” Ford told reporters during a Wednesday press conference. But he also said the company had received $55 million for its Windsor plant, “out of the two billion dollars that the Federal Reserve, I and the companies agreed to.”
A spokesperson for Stellantis said in an initial statement to CBC News on Wednesday that the automaker has plans for its Brampton plant that it will discuss with the federal government, but did not provide any details.
CBC News sought clarification on how much money – if any – the company has received from the federal or Ontario provincial government, and if not, whether it has broken the terms outlined in the auto agreement.
The company does not comment on the details of its agreements, the spokeswoman said.
