The Canadian federal government has issued a stern warning to automaker Stellantis, threatening legal action if the company fails to uphold its commitments to Canadians. This comes years after Stellantis agreed to an auto pact promising substantial performance incentives.
Industry Minister Mélanie Joly expressed deep concern in a letter to Stellantis CEO Antonio Filosa regarding the company’s decision to shift production of its Jeep Compass model from a plant in Brampton, Ontario, to one in Belvidere, Illinois. The move was part of a $13 billion US investment in the company’s American manufacturing operations, aligning with U.S. President Donald Trump’s vision for a robust automotive sector in the U.S.
In response to the challenging U.S. tariff environment, Joly emphasized that despite the complexities, Stellantis had made significant commitments to Canada and its workforce. The minister warned that if Stellantis fails to honor its obligations, the government would take legal action to ensure accountability.
Two years ago, Stellantis entered into an agreement with the federal and Ontario provincial governments, where both parties committed up to $15 billion in performance incentives contingent on the automaker meeting specific conditions, including maintaining production in Brampton. Failure to fulfill this commitment would be considered a default under the agreements.
During a press conference, Minister Joly highlighted the ongoing engagement with Stellantis, emphasizing the importance of their commitment to invest in the Brampton facility. The Brampton plant has been inactive since 2023 as it undergoes retooling for a new vehicle lineup.
The auto pact between Stellantis and the governments was established in 2023, resembling a similar deal struck with Volkswagen and its subsidiary for an EV battery manufacturing plant in St. Thomas, Ontario. While Ottawa pledged two-thirds of the funding, the Ontario government would provide the remainder.
Not meeting the conditions set in the auto pact, including project milestones and job creation, has led to Stellantis not receiving provincial funding for the Brampton plant. Ontario Premier Doug Ford expressed reluctance to provide further funding, citing the company’s failure to meet the pact’s requirements.
Stellantis mentioned plans for the Brampton plant but did not disclose details when questioned by CBC News. The company refrained from commenting on the specifics of its agreements with the federal and provincial governments.
The situation underscores the importance of Stellantis fulfilling its commitments to Canada to ensure a thriving automotive industry and safeguard the interests of Canadian workers.