After giving Stellantis about $105 million to retool two Ontario plants, the federal government is now reviewing the contract to determine whether the automaker reneged on the deal by announcing it would move some production to the United States.
Last week, Stellantis publicly announced its plans to move production of the Jeep Compass from Brampton, Ontario to Illinois.
Asked by CBC News if he wanted to return taxpayer money already given to Stellantis, Finance Minister Francois-Philippe Champagne suggested the government was taking action.
“We're certainly going to enforce our contractual rights,” said Champagne, who was involved in contract negotiations with Stellantis.
“You just have to look at their circumstances, what was promised and what was delivered.”
Finance Minister Francois-Philippe Champagne was asked if he expected a return on investment after automaker Stellantis shipped production from Ontario to the U.S. after the government gave the company millions in support to boost production in Canada.
Stellantis' new American expansion plan was hailed as a major blow to Canada and was hailed as a victory by the White House.
US President Donald Trump has made it clear that he wants to dominate the automotive industry. His trade minister, Howard Lutnick, told an audience in Toronto this month that he wants to move auto assembly out of Canada.
The Government of Canada has now confirmed to CBC News that it has given Stellantis more than $18.6 million in fiscal year 2023 and another $85.9 million in fiscal year 2024 to retool its Windsor and Brampton plants.
But that's only a fifth of the money Ottawa offered Stellantis.
In 2022, the federal government announced it would invest $529 million to help the automaker modernize those two plants to increase electric vehicle production in Canada.
The money comes from the Strategic Innovation Fund to support jobs in Windsor and Brampton. According to the responsible department, this funding is usually distributed in stages after the company submits claims for reimbursement of expenses incurred in the event of fulfilling certain obligations.
“At that time, we made sure we had the proper protections for workers,” Champagne said.
Minister of Industry Melanie Jolie said Tuesday that the government is reviewing a series of confidential agreements with Stellantis to determine whether the automaker's announcement of a move violates any terms.
Canadian politicians of all stripes have expressed anger and frustration over the move of Jeep Stellantis production from Brampton, Ontario, to Illinois, and Ottawa is considering legal action.
In a letter to the company's CEO last week, Joly warned Stellantis that it has a “legal obligation” to maintain “a full presence in Canada, including Brampton, in exchange for financial support.”
The letter outlines Stellantis' commitment to the Strategic Innovation Fund and the agreement related to the company's NextStar Energy project.
Ottawa had allocated $268 million to Stellantis for the NextStar project as of last March, according to federal government public records.
It's unclear if the money can be returned
Although Ottawa has provided millions of dollars to the automaker, it is unclear how capable it is of enforcing contracts or returning the money.
When asked if she has the right to return the money, Jolie did not answer.
“We are confident that we can put a lot of pressure on the company because when we sign contracts with companies to support them, everything is, of course, about creating jobs,” Joly said in French on Tuesday.
Jolie also said she is in talks with other car companies.
“I had conversations again this weekend and Friday with Honda, with Ford, and I will certainly continue to have conversations with GM,” she said.
Unifor national president Lana Payne calls Stellantis' decision to move planned Jeep production from Brampton, Ontario, to Illinois “egregious.” Payne told Power & Politics that Canada must “do everything in the moment” to preserve jobs and production until trade negotiations are concluded.
The government has entered into agreements and announced support to assist these major automakers in Canada's transition to electric vehicles.
After Stellantis announced it would move some production to the US, Flavio Volpe said the government needed to make it clear to other automakers that if they “resorted” to the White House, there would be “real consequences.”
“We're not going to set a precedent here where you can say, 'I don't care about the consequences in Canada,'” said Volpe, president of the Automotive Parts Manufacturers Association.
The Prime Minister said the head of Stellantis promised him there would be a new production plan for Brampton. But Mark Carney said the decision is contingent on the completion of the Canada-United States-Mexico Agreement (CUSMA), which will be renegotiated next year.
The White House has hit Canada's auto sector with a 25 percent tariff on all finished vehicles that do not comply with CUSMA requirements. Canada returned fire corresponding counter tariff.
But Trump has since signed an executive order restricting imports of trucks, including from Canada. The tariff is also 25 percent.
Jolie said Tuesday she would release “more news” about Stellantis by the end of the day, but had not yet made a statement as of evening.
After the Conservatives pushed for it, a parliamentary committee voted to examine the government's confidential contracts with Stellantis to see whether they included provisions to protect jobs in the Canadian auto industry.
