Ottawa limits how many US vehicles Stellantis and GM can import tariff-free
The federal government is hitting back at Stellantis and General Motors by limiting the number of tariff-free vehicles the automakers can import from the U.S. to sell in Canada, CBC News has learned.
The two multinational manufacturers will no longer be exempted from paying Canada’s retaliatory tariffs on many US-assembled vehicles as before, the sources said.
The move is expected to put pressure on companies to reinvest in Canadian production and workers so they can recoup these profits and avoid large tariff bills.
Ottawa is taking a tough stance after Stellantis announced its plans to expand in the US, including moving production of the Jeep Compass in Brampton, Ontario, to Illinois.
General Motors also confirmed Tuesday that it is ceasing production of its BrightDrop electric delivery vans at a plant in Ingersoll, Ontario, due to demand.
In April, the Canadian government offered rebates to auto companies so they wouldn’t have to pay the cost of Canada’s 25 percent retaliatory tariffs on the U.S. auto sector.
The federal government has announced that auto makers will be allowed to import a certain number of U.S.-assembled vehicles – those that comply with CUSMA – free of retaliatory tariffs imposed by Ottawa in response to Trump’s levy.
But this benefit came with certain conditions – automakers had to continue making vehicles in Canada and complete already planned investments.
If companies broke that condition, the government warned it would limit how many tariff-free vehicles companies could import from the U.S.
Sources told CBC News the government now believes Stellantis and GM are no longer meeting that requirement, so Ottawa is reducing its discount rate quota until the companies live up to their promises.
CBC News is not naming the sources with knowledge of the government’s move because they were not authorized to speak publicly about it.
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.
Industry Minister Mélanie Joly has called Stellantis’ move unacceptable and threatened legal action, citing the fact that the government gave millions of dollars to the company.continuesTrust Stellantis while maintaining its Canadian footprint.
Jolie warned on Tuesday that she was looking for ways to put maximum pressure on the company to meet its commitments.
Ontario Premier Doug Ford also threatened to sue GM if they breached their contract and did not find any new products for the Ingersoll plant.
Prime Minister Mark Carney said Thursday that GM has indicated it will honor its obligations to pay workers, but that is not enough.
“We are not satisfied with this,” he said.
In an announcement with Ford, Carney said they are working to explore what else can be done with the GM plant and whether it could be part of Canada’s upcoming defense industrial strategy. Carney is working on a plan to move Canada away from excessive dependence on the US
Carney also pointed to ongoing talks with the Trump administration to provide relief to some sectors from US tariffs.
The Prime Minister warned that if Canada does not make progress on those negotiations, the government will “do whatever is necessary to protect our workers.”
“That starts with building out, taking control over there. But it’s also not unreasonable access to our market if we don’t have access to another market,” Carney said. “We’re not at that point.”
Prime Minister Mark Carney was asked by reporters about his approach to U.S. trade talks, highlighting discrepancies with Ontario Premier Doug Ford, who has advocated for tougher dealings with the Trump administration.
US President Donald Trump has indicated that he wants to dominate auto manufacturing. 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 the Canada-U.S.-Mexico Agreement (CUSMA).
Trump’s Commerce Secretary Howard Lutnick told an audience in Toronto this month that he wants to eliminate auto assembly from Canada.
Carney said Canada pays the lowest tariffs on autos and auto parts in the United States, but he said it needs to do so as part of a “larger set of conversations” with Americans.
“We have the best deal on autos, but we have to work to make it even better,” he said.
Conservative Leader Pierre Poilievre took aim at Carney Thursday morning, saying he has broken his promise to negotiate a victory with Trump and protect Canada’s auto sector.
“We really need to keep our promise and defend auto workers in our negotiations with Americans,” Poilievre said.
The Trump administration is exploring whether auto imports pose a national security threat.
