Ottawa gave $105 million to Stellantis for Ontario. plant before automaker reveals US plans
After giving Stellantis about $105 million to refurbish two Ontario plants, the federal government is now reviewing the contract to see whether the automaker breached the deal by announcing it was moving some production to the US.
Stellantis last week publicly revealed its plans to move its Jeep Compass production from Brampton, Ontario to Illinois.
Asked by CBC News whether he intended to recover taxpayer money already given to Stellantis, Finance Minister François-Philippe Champagne suggested the government was taking action.
“We are definitely going to enforce our contractual rights,” said Champagne, who was involved in contract negotiations with Stellantis.
“You just have to look at their circumstances, what was promised and what is being delivered.”
Finance Minister François-Philippe Champagne was asked if he was looking for a return on investment after auto maker Stellantis moved production from Ontario to the U.S. after the government provided the company millions in aid to encourage production in Canada.
Stellantis’ new US expansion plan has been described as a major blow to Canada and the White House has celebrated it as a victory.
US President Donald Trump has indicated that he wants to dominate auto manufacturing. His Commerce Secretary, Howard Lutnick, told an audience in Toronto this month that he wants to eliminate auto assembly from Canada.
The Canadian government has now confirmed to CBC News that it has committed more than $18.6 million to Stellantis in the 2023 fiscal year and $85.9 million in the 2024 fiscal year to retrofit its Windsor and Brampton plants.
But that’s only one-fifth of the money Ottawa gave to Stellantis.
In 2022, the federal government announced it will invest $529 million to help automakers modernize those two plants to boost electric vehicle production in Canada.
The money came from the Strategic Innovation Fund to support jobs in Windsor and Brampton. The responsible department said it is standard that this funding is distributed in stages when a company submits a claim for the costs incurred in meeting certain commitments.
“We made sure at that time that we had the proper protections in place for the workers,” Champagne said.
Industry Minister melanie jolie It said on Tuesday the government was reviewing a series of confidential agreements with Stellantis to find out whether the automaker’s transfer announcement violated any terms.
Canadian politicians of all types expressed anger and disappointment over Stellantis moving Jeep production from Brampton, Ontario, to Illinois – and Ottawa is considering taking legal action.
In a letter to the company’s CEO last week, Jolie warned Stellantis that it has “legally binding commitments” to maintain “its entire Canadian footprint, including Brampton” in return for financial support.
The letter points to Stellantis’ commitments under the Strategic Innovation Fund and an agreement related to the company’s NextStar Energy project.
As of March last year, Ottawa had given Stellantis $268 million for the Nexstar project, according to the federal government’s public accounts.
The government is also distributing funding as the company produces battery modules and cells, but it would not release those funding numbers, citing commercial confidentiality.
It is not clear whether the money can be recovered
Even though Ottawa has owed millions of dollars to the automaker, it’s unclear how much ability it has to enforce the contracts or get the money back.
When asked whether she had the power to recover the money, Jolie did not say.
“We believe we are able to put a lot of pressure on the company, because when we sign contracts with companies to support them, of course everything is linked to job creation,” Jolie said in French on Tuesday.
Jolie also said that she is talking to other car companies.
“I talked again this weekend and Friday with Honda, Ford, and I certainly will continue to talk with GM,” she said.
Unifor national president Lana Payne called Stellantis’ decision to move scheduled production of Jeep models from Brampton, Ontario, to Illinois “extremely serious.” Payne told Power & Politics that Canada must ‘do everything right now’ to preserve jobs and production until trade talks conclude.
The government has struck deals and announced support to help these major auto manufacturers with Canada’s transition to electric vehicles.
After Stellantis announced it would move some production to the US, Flavio Volpe said the government needed to send a message to other automakers that there would be “real consequences” if they kowtow to the White House.
“We’re not going to set a precedent here where you can say, ‘I don’t care about the consequences in Canada,'” said Volpe, president of the Automotive Parts Manufacturers Association.
The Prime Minister has said that the head of Stellantis promised him there would be a new production plan for Brampton. But Mark Carney revealed that the decision is dependent on finalizing the Canada-U.S.-Mexico Agreement (CUSMA) which is up for review next year.
The White House is hitting Canada’s auto sector by imposing a 25 per cent tariff on all finished vehicles that do not comply with CUSMA. Canada retaliated A matching counter-tariff.
But since then, Trump signed an executive order banning truck imports, including from Canada Also 25 percent tariff.
Jolie said Tuesday that she would release “further news” about Stellantis by the end of the day, but no announcement had been made by afternoon.
After the Conservatives pressed for it, a parliamentary committee voted to study the government’s confidential contracts with Stellantis to see if they include terms designed to protect Canadian auto jobs.
