Canada has issued Stellantis a notice of default over its 2022 funding agreement and threatened legal action after the automaker agreed to sell its idled Brampton plant to Roshel.
By Hermes Vector
Canada has issued Stellantis a notice of default over a 2022 funding agreement and threatened to sue the automaker after it agreed to sell its Brampton, Ontario, assembly plant to defence contractor Roshel.
Industry Minister Mélanie Joly said Ottawa sent Stellantis a notice of default and terminated the resolution process between the two sides. "We sent a notice of default and, basically, they have 30 days or else. Of course, we'll sue them," Joly told reporters in Toronto.
Joly's letter to Trevor Longley, chief executive of Stellantis Canada, states that the planned sale to Roshel shows the company is no longer negotiating in good faith. The letter says Stellantis has 30 days to demonstrate it will "correct these conditions" or face penalties, including termination of the funding deal and repayment of all or part of the funding received, plus interest. Joly is seeking a response by Dec. 12.
The letter identifies alleged breaches including halting Jeep Compass production at the plant, failing or refusing to identify a replacement vehicle, not maintaining any production at the facility, and closing the plant. The agreement says the plant cannot be sold before 2033 unless specified conditions render it commercially unviable.
In 2022, the federal government committed up to C$529 million to help Stellantis retool its Brampton and Windsor facilities to produce electrified vehicles, while Ontario committed C$513 million. Federal funds disbursed to Stellantis stood at roughly C$222 million as of December 2025, including at least C$55 million tied to Windsor.
Stellantis has said it will voluntarily return the government support received for the initial Brampton retooling but has not disclosed the amount. Spokeswoman LouAnn Gosselin said by email on Nov. 10 that the company recognizes Canadians expect public funds to be managed responsibly.
About 1,800 Brampton workers remain on layoff, according to Source 1. Source 2 states more than 2,000 workers were laid off when Jeep Compass production was moved to Illinois. Source 1 says workers have continued to receive 70 percent of their pay plus benefits since 2023.
Prime Minister Mark Carney accused Stellantis of betraying Canadian workers and said the sale would not satisfy the company's obligations. He told reporters his government had been informed of "some aspects" of the plan before the deal was announced.
Opposition Conservative Leader Pierre Poilievre renewed his call for Joly's removal and demanded the full 2022 agreement be published. "Why not release the deal, Mr. Carney? Your government handed over our money. Canadians deserve to know how much they paid and what they got in return," he said at a news conference in Calgary.
Unifor, which represents Stellantis workers in Canada, said a meeting involving the company, the union and both levels of government produced no resolution. Unifor President Lana Payne said the sale has occurred and reversing it would be difficult. Roshel chief executive Roman Shimonov has said his company is willing to hire back some of the Stellantis employees who were laid off.
The dispute tests whether subsidy clawbacks are a credible tool when companies redirect investment, and it carries stakes for Canada's auto sector, described by Carney as the country's second-largest export category that directly employs 125,000 Canadians and supports almost 500,000 more jobs in related fields.
Sources
This article was drafted with AI assistance and checked against the sources above. Company claims are reported as claims. Cover image is AI-generated.
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