The federal government has officially sent a default notice to Stellantis after the manufacturer transferred part of its production from Canada to the U.S. Industry Minister Mélanie Joly announced the notice in an appearance before the International Trade Committee in Ottawa.
Move of Compass production appears to violate commitments made to Ottawa
In October, Stellantis announced that upcoming production of the new Jeep Compass would be transferred from Brampton, Ontario, to Illinois. According to Minister Joly, that move violates federal agreements linking production to the Brampton and Windsor facilities.
According to the Minister, Stellantis’ commitments were an integral part of contracts associated with the NextStar Energy battery plant in Windsor, a joint venture between LG Energy Solution and Stellantis, which received a federal contribution of approximately $500 million from the Strategic Innovation Fund.
Mélanie Joly: “Defending these jobs means defending the Canadian economy”
In parliament, Joly denounced the manufacturer's unilateral action: "We will hold our ground to protect our workers, our industries, and our economy."
Stellantis is making this and other production adjustments at a time when the U.S. administration’s trade policies are once again disrupting the North American auto industry. Donald Trump has been repeating for months that he wants cars manufactured in the U.S., and he boasted this week about the relocation of Canadian plants stateside.
Contracts read late, but firmly invoked
Mélanie Joly, who was not responsible for the file when the agreements were signed, says she became aware of the contracts around October 15, after receiving 24 hours' notice from Stellantis's Global CEO, Antonio Filosa, regarding the production transfer. This was followed by a series of tense exchanges with Conservative MP Adam Chambers, who asked her if the contracts contained a specific guarantee on jobs in Brampton. The Minister maintained: "What I can tell you is that there is a jobs guarantee."
According to Mélanie Joly, the federal funding for the battery plant explicitly included a link to the jobs in Brampton: "It was clear: the investments in the battery plant, which are essential and which we will continue to defend, were linked to the Brampton facility."
Ottawa initiates a dispute resolution process
Last month, Ottawa launched an official procedure against Stellantis. In a letter addressed to Filosa, Minister Joly recalled that Stellantis had agreed to maintain its full presence in Canada, including Brampton, in exchange for major financial support from the federal government and Ontario.
"Any breach of this commitment will be considered a default," the letter dated October specified.
3,000 workers still waiting
Around 3,000 employees at the Brampton plant remain temporarily laid off. The plant, undergoing renovation to accommodate a new production line, has been shut down since February.
The new uncertainty regarding the Ontario plant puts increased pressure on Ottawa, which seeks to maintain the stability of the Canadian automotive sector as North American trade relations are rapidly reconfigured.