The federal government is threatening automaker Stellantis with legal action if the company doesn't “meet its obligations” to Canadians, according to a copy of the letter obtained by CBC News, years after the company agreed to an auto deal promising billions of dollars in performance incentives.
Industry Minister Melanie Jolie wrote to Stellantis CEO Antonio Filosa on Wednesday expressing “extreme concern” about the company's plan to move production of the Jeep Compass from its Brampton, Ontario assembly plant to its Belvidere, Illinois plant.
The change was announced Tuesday night as part of a $13 billion U.S. investment in the company's U.S. operations. The company shares U.S. President Donald Trump's goal of building a “strong” auto sector in the U.S., Filosa told CNBC on Wednesday.
Back in April, the United States imposed a 25 percent tariff on Canadian auto parts and vehicles, with a caveat to the cost of parts made in the United States.
“While the current U.S. tariff environment poses complex challenges, Stellantis has made important commitments to Canada and its workforce,” Joly wrote in the letter.
“If Stellantis chooses not to comply with its obligations, we will act in the best interests of all Canadians, hold the company fully accountable and pursue all options, including legal options.”
Industry Minister Mélanie Joly says the government is ready to meet with Stellantis after the manufacturer announced it would move Jeep production to the United States. Jolie highlighted previous investments in the Brampton, Ont., plant and said the government would “hold them accountable” while providing more investment opportunities.
Two years ago, the company struck an agreement with the federal and Ontario governments that would see both provide up to $15 billion in performance incentives — provided the automaker met a number of conditions, including meeting a production mandate in Brampton.
Stellantis agreed to maintain “a full presence in Canada, including Brampton, in exchange for significant financial support,” Jolie wrote in her letter. “Anything that does not comply with this obligation will be considered a default in accordance with our agreements.”
The minister said during a news conference Wednesday that Ottawa has “been working with the company for several months, knowing that the Brampton plant will be converted.” The automaker's Brampton plant has been idle since 2023 as it upgrades its assembly line for next-generation vehicles.
“We have invested millions of dollars in this facility on the basis that they will invest in a new model, and so if they don't, we will hold them accountable,” the minister said.
A vehicle agreement between Stellantis and the federal and Ontario governments was announced back in 2023. Both governments struck a similar deal with Volkswagen and its subsidiary Power Co. on an electric vehicle battery plant in St. Thomas, Ont., offering up to $13 billion in incentives.
Ottawa said it would provide two-thirds of the funding, with the Ontario government providing the rest.
But the agreement was contingent on several conditions, including the automaker fulfilling its existing commitments in Canada, such as fulfilling its production mandate at the Brampton plant.
A spokesperson for Ontario Premier Doug Ford's office told CBC News that the company's Brampton plant does not meet the terms set out in the auto agreement, particularly those related to project milestones and job creation.
As such, the company did not receive provincial funding, the spokesperson said.
“I'm not going to give them a penny” for the Brampton plant, Ford told reporters during a news conference Wednesday. But he added that the company received $55 million for its Windsor plant “out of the couple billion that the feds, myself and the companies agreed upon.” [to.]”
A Stellantis spokesperson said in an initial statement to CBC News on Wednesday that the automaker has plans for its Brampton plant that it will discuss with the federal government, but did not provide any details.
CBC News asked for clarification on how much money, if any, the company received from the federal or Ontario provincial governments and, if not, whether it violated the terms outlined in the auto agreement.
The company does not comment on the details of its agreements, the spokesman said.
