Confidential government agreements valued at billions of dollars aimed at supporting a Stellantis-associated electric vehicle battery plant in Windsor, Ontario, include numerous conditions that, if breached, empower federal authorities to terminate the contracts and potentially demand repayment, as per documents obtained by CBC Windsor.
While there is uncertainty regarding guarantees related to the company’s overall presence in Canada, some sections of the contracts remain redacted, leaving the full terms undisclosed.
The federal government and NextStar did not provide responses to inquiries prior to the article’s publication.
Parliament has closely scrutinized the content of these unpublished contracts following Stellantis’ announcement of transferring production of a Jeep model from Brampton, Ontario, to Illinois, alongside a substantial $13 billion investment in U.S. operations.
Despite Stellantis’ reassurances about retaining a presence in Brampton, concerns have emerged over the potential permanent job losses facing the plant’s approximately 3,000 workers, most of whom have been laid off since 2023 for facility retooling, especially with ongoing challenges from U.S. tariffs affecting the Canadian auto sector.
Federal officials have asserted that the agreements with the company include safeguards for jobs, an aspect that the official opposition has persistently questioned, leading to demands for the release of the contracts by the Liberal government.
Uncovered within a release of over 150 pages of government records by the Privy Council Office last August, CBC Windsor found copies of the agreements related to the battery plant. These records were obtained through an informal request for previously disclosed documents.
The initial agreement from 2022 involves a pact between the federal government and NextStar Energy, the entity behind the battery plant, to offer up to $500 million in taxpayer support through the Strategic Innovation Fund (SIF).
NextStar, a joint venture between Stellantis and LG Energy Solution based in Seoul, commenced the project in Canada’s automotive hub that same year. Both Stellantis and LG are signatories to the agreement and are listed as guarantors.
The subsequent deal, inked in 2023, is a Special Contribution Agreement between NextStar and the federal government to furnish up to $15 billion in production subsidies, with one-third of the amount to be covered by the province.
This agreement followed NextStar’s suspension of factory construction in Windsor to secure additional public funding, coinciding with a significant deal between the government and Volkswagen for another battery plant in Ontario, while the U.S. government offered incentives for companies establishing EV operations south of the border.
In a statement from July 2023, federal and provincial officials noted that the production subsidy agreement contained “a number of conditions,” one of which stipulated that “Stellantis will uphold its existing commitments in Canada and Ontario, including a production mandate at its plant in Brampton, Ontario.”
Industry Minister Mélanie Joly has hinted at such a condition in the NextStar deals and raised the prospect of legal action against Stellantis.
Stellantis is said to have concurred with the Government of Canada and the Province of Ontario to maintain its complete Canadian footprint, including Brampton, in return for substantial financial assistance, as outlined in a letter from Joly to the company’s CEO.
Premier Doug Ford’s spokesperson mentioned that Ontario has its set of contracts with stringent safeguards in place but did not disclose the amount disbursed to NextStar by the province.
The federal contracts contain various conditions, such as NextStar being obligated to maintain ownership and operations of the Windsor plant throughout the agreement period, undisclosed capital expenditure in Canada, and conditions for repayment in case of default.
The federal government has not disclosed the exact sum provided to NextStar thus far, although $268 million of the $500 million in SIF funding had been disbursed as of last year, according to public accounts.
Finance Minister François-Philippe Champagne has indicated the government’s intention to enforce contractual rights with Stellantis, hinting at potential efforts to recoup funds disbursed under the deals.
The government’s contracts with Stellantis have previously drawn attention, notably in 2023 when foreign worker utilization at the Windsor battery plant sparked controversy, prompting a request from a House committee for copies of the agreements to review their terms. The redacted copies obtained by CBC Windsor appear to be the same documents provided to the House committee in response to that inquiry.
Recently, another House committee has demanded copies of the agreements and set a two-week deadline for their provision.