Canada Threatens to Sue Stellantis Over Brampton Plant Sale
Canada has given Stellantis 30 days to fix alleged breaches of a federal funding agreement or face a lawsuit, escalating a dispute over the carmaker’s decision to sell its idled assembly plant in Brampton, Ontario, and move planned Jeep production to the United States.
Industry Minister Mélanie Joly said on Thursday that Ottawa had served the world’s fourth-largest carmaker with a formal notice of default and ended the dispute-resolution process between the two sides.
“We sent a notice of default and, basically, they have 30 days — or else, of course, we will sue them,” Joly told reporters in Toronto after meeting representatives of Stellantis Canada and the union Unifor.
The minister is seeking a response by December 12. If Stellantis does not act, Ottawa says it could terminate the funding deal and demand repayment of all or part of the money it has received, plus interest.
A plant left idle since 2023
The row centres on the Brampton plant, which has been idle since 2023, when production stopped so the site could be retooled to build the Jeep Compass. Stellantis later scrapped that plan and shifted Compass production to Illinois, a move made as US tariffs push carmakers to build more vehicles south of the border.
On Monday, Stellantis announced it had agreed to sell the Brampton site to Roshel, a Canadian armoured-vehicle maker, for an undisclosed amount. The sale is expected to close by the end of the year.
Joly said the planned sale showed the company was no longer negotiating in good faith. In a letter to Trevor Longley, the chief executive of Stellantis Canada, she said the company had breached its 2022 funding agreement by halting the Brampton retooling, failing to identify a replacement vehicle, maintaining no production at the facility and closing the plant. Under the agreement, the plant cannot be sold before 2033 unless specified conditions make it commercially unviable.
Ottawa committed up to C$529 million under the 2022 deal to retool the Brampton and Windsor plants for electric and petrol-powered vehicle production. The government says hundreds of millions of dollars are now at stake.
Stellantis offers to repay $24 million
Stellantis has offered to return some of the support voluntarily. Longley said on Thursday that the company would repay $24 million in federal subsidies, a figure well below what Ottawa believes it is owed. The company also said it was prepared to work with Unifor on a settlement.
About 1,800 workers at the Brampton plant remain on layoff. Lana Payne of Unifor said Stellantis had breached its commitments to workers.
The market reaction was swift. Stellantis shares closed down 6.1% in New York on Thursday at $3.86, after falls of 3.6% on Tuesday and 3.5% on Wednesday, CNBC reported.
Tariffs reshape North American car production
The dispute is the latest sign of how US tariffs are reshaping North American auto production, after Trump threatened to double tariffs on Mexico this week in a separate row over migration. Canada has argued that the tariffs are pulling investment and jobs out of its auto sector, while Washington says the duties are bringing manufacturing home.
The Canadian Press reported that Joly may add further alleged breaches to the notice tied to the sale of the plant to Roshel.
For now, the clock is running. Stellantis has until mid-December to show it will correct the conditions Ottawa has identified — or the two sides will meet in court. The outcome will be watched closely across the industry, not least because Trump, Xi and Putin are set to meet in Shenzhen on November 19, where trade is expected to feature prominently.
