The federal government is currently scrutinizing the contract with Stellantis after granting the automaker around $105 million to upgrade two Ontario plants. This review comes in response to Stellantis’ recent announcement of relocating its Jeep Compass production from Brampton, Ont., to Illinois.
Finance Minister François-Philippe Champagne stated that the government intends to uphold its contractual rights in light of these developments. He emphasized the importance of assessing the discrepancy between the commitments made by Stellantis and the actions being taken.
The decision by Stellantis to shift production to the U.S. has been viewed as a setback for Canada and was hailed as a victory by the White House. U.S. President Donald Trump has expressed his desire to assert dominance in the auto manufacturing sector, with Commerce Secretary Howard Lutnick indicating plans to draw auto assembly away from Canada.
CBC News confirmed that the Canadian government disbursed over $18.6 million to Stellantis in the 2023 fiscal year and an additional $85.9 million in the 2024 fiscal year for the retooling of the Windsor and Brampton plants. However, this amount represents only a fraction of the total funding promised by Ottawa.
In a bid to boost electric vehicle production in Canada, the federal government pledged $529 million in 2022 to support Stellantis in modernizing the aforementioned plants. The funds were allocated from the Strategic Innovation Fund to bolster employment in Windsor and Brampton. Minister Mélanie Joly revealed that the government is reviewing undisclosed agreements with Stellantis to assess potential breaches related to the relocation announcement.
Despite the substantial financial support provided to Stellantis, the government’s ability to enforce contractual obligations and recover the funds remains uncertain. Joly refrained from confirming if the government could reclaim the money, emphasizing the importance of ensuring compliance with job creation commitments in such agreements.
Stellantis faced criticism for its decision to transfer production operations, prompting calls for a firm stance against such actions. Flavio Volpe emphasized the need to send a strong message to automakers that disregard their commitments. Prime Minister Justin Trudeau mentioned assurances from Stellantis regarding a new production strategy for Brampton, contingent upon the outcome of the upcoming review of the Canada-U.S.-Mexico Agreement.
The ongoing trade issues between Canada and the U.S., including tariffs imposed by both sides, have added complexity to the situation. Efforts are underway to safeguard Canadian auto jobs amidst these challenges. Joly pledged to provide further updates on the Stellantis situation, with parliamentary committees also investigating the terms of the confidential contracts with the automaker.