Government to Serve Stellantis With Default Notice on Funding Contracts, Minister Joly Says

Ottawa is serving Stellantis with a notice of default on its federal contracts as the automaker proceeds with plans to relocate a portion of its production to the United States, despite receiving hundreds of millions of dollars in Canadian funding.

Industry Minister Mélanie Joly told a parliamentary committee on Dec. 4 that the automaker’s production shift breaches government contracts tied to manufacturing both in Windsor and Brampton, Ont.

Joly’s announcement while addressing the House of Commons’ international trade committee comes nearly two months after Stellantis said it will shift production of the Jeep Compass from the Brampton Assembly Plant in Ontario to Belvidere, Illinois. The move is part of a US$13 billion investment in the company’s manufacturing operations in the United States and affects some 3,000 jobs at the Brampton facility.

“When it comes to protecting auto jobs, we will not let these industries down,” Joly told the committee. “We will stand firm for the sake of our workers, our industries and our nation because defending these jobs means defending Canada’s economic backbone and the livelihoods of countless families.”

Joly sent a letter on Oct. 15 to Stellantis Global CEO Antonio Filosa that accused the company of reneging on its commitments to the Canadian and Ontario governments to “maintain its full Canadian footprint” in return for substantial financial subsidies.

Stellantis signed a 2023 “Auto Pact” with both Ottawa and the province that would see both governments provide up to $15 billion for EV battery investment contingent on the automaker satisfying a series of conditions, including meeting a production mandate in Brampton.

Stellantis has received at least $222 million so far as part of its agreement with Ottawa to upgrade both the Brampton and Windsor facilities. This amount came from the total federal pledge of up to $529 million to re-tool the plants.

Joly called the company’s decision to move Jeep Compass production across the border “unacceptable” in her letter, saying that “anything short of fulfilling that commitment will be considered as default under our agreements.”

She also announced last month the government had launched a formal dispute resolution process, saying the contracts included job guarantees for Brampton.

Joly was not industry minister when the contracts were negotiated but she said she has read them since, noting she studied them after receiving 24-hour notice from Stellantis about the production move.

Joly told the House of Commons during Dec. 4’s question period that she wanted to hold Stellantis accountable to the contractual obligations because “we can’t open that floodgate of basically our automakers leaving the country.”

Stellantis Response

A Stellantis executive speaking at a Dec. 4 parliamentary hearing said she had not yet seen Joly’s notice of default announcement, but emphasized that the company is fulfilling its obligations and had not breached its government contract.

“We have invested billions in Canada,” said Teresa Piruzza, the director of external affairs and public policy at FCA Canada Inc., the Canadian division of Stellantis. “We are adding a third shift and 1,500 jobs at the Windsor assembly plant. Our research and development centre in Windsor has also enhanced their capabilities and added over 600 professional jobs at that location.”

Liberal MP Vince Gasparro noted that 3,000 employees from the Brampton plant remain out of work and asked Piruzza if that violated the federal contracts.

“Brampton is on an operational pause,” she replied. “It has not closed, and those employees remain employees of Stellantis.”

She later said that Stellantis is continuing to review operations at the Brampton plant to determine a plan “for production moving forward.” She said the investments made by Stellantis at the Windsor facility, which include the reinstatement of a third shift, demonstrate both its dedication to Canada and its fulfillment of the contract.

Piruzza said hiring for the third shift began last month and the workers hired will start early next year.

Company Contracts

Piruzza was supposed to appear before the committee via Zoom last week, but Stellantis said technical issues arose preventing her appearance.

Some committee members questioned if the tech issues were authentic at the time because Piruzza was set to talk about Stellantis’ re-tooling deal with Ottawa.

Members of the panel had also requested unredacted versions of the 2022 contract for several weeks, following the receipt of copies that some members claimed included redactions obscuring critical parts of the agreement.

The parliamentarians were provided with new unredacted copies on Dec. 4 that they were told not to share.

Piruzza told the committee during her Dec. 4 appearance that Stellantis has no objections to the MPs reviewing the unredacted agreements, as long as “appropriate confidentiality safeguards” were implemented.

Joly’s department initially said the redactions were made by Stellantis but Piruzza claimed it was the opposite.

“The government proposed redactions and we agreed to the proposed redactions as appropriate,” she told the committee.

The committee members talked about having department officials come back to address the contradiction, but did not finalize any specific arrangements.

The contracts were also a focus of question period that day as Tory MP Kyle Seeback questioned Joly about the contracts and whether the Liberal government had read them before signing. He also questioned if the contracts contained job guarantees.

“We take it very seriously when it comes to investing taxpayers’ money,” Joly replied. “And when it comes to Stellantis, we had a deal. They broke it, and we’ll make sure that we get our money back. Period.”

Tariff Ties

Prime Minister Mark Carney has described the decision to move production to the United States as a “direct consequence of current U.S. tariffs and potential future U.S. trade actions.”

U.S. President Donald Trump has imposed a number of tariffs on Canada this year, including 25 percent tariffs on vehicles and auto parts in April. He has also announced 25 percent tariffs on all medium- and heavy-duty trucks entering the United States beginning in November.

Carney said investment decisions in Canada’s auto sector will continue to be impacted by tariffs until the United States-Mexico-Canada Agreement (USMCA) is reviewed in 2026, but said he still expects Stellantis “to fulfill the undertakings they have made to the workers of Brampton.”