Canada Says Stellantis Owes Hundreds of Millions in Subsidies, Rejects $24m Repayment Offer

The Canadian federal government says automaker Stellantis owes hundreds of millions of dollars in subsidies following its decision to sell its assembly plant in Brampton, Ontario, despite the company's offer to repay just $24 million.

Industry Minister Mélanie Joly said the planned sale of the facility to armoured vehicle manufacturer Roshel Inc. violates a 2022 federal funding agreement under which the government provided financial support to help retool the company's plants.

In a statement on Thursday, Stellantis Canada Chief Executive Officer Trevor Longley said the company would return $24 million in federal subsidies, acknowledging that the decision to sell the plant represents a departure from its original plans.

However, Joly said the amount was far below what the government believes the automaker owes.

Government Issues Default Notice

Speaking after a meeting with representatives of Stellantis, the Ontario government and the union representing the plant's workers, Joly said the company was liable for hundreds of millions of dollars.

Although she declined to provide an exact figure, she insisted that Stellantis knew the amount it was expected to repay. Government records had previously indicated that approximately $220 million in subsidies was provided to the company to upgrade its plants across Ontario.

Joly also wrote to Longley, informing the automaker that the government was terminating a resolution process and issuing a notice of default under the 2022 funding agreement.

The minister's letter gives Stellantis 30 days to take corrective action, failing which the government could seek to terminate the agreement and recover the subsidies.

Joly said the company was no longer working diligently and in good faith to develop an acceptable alternative plan for the Brampton facility.

Plant Sale Raises Concerns Over Workers' Jobs

Stellantis announced on Monday that it intended to sell the Brampton assembly plant to Roshel, a Canadian manufacturer of armoured vehicles. The two companies had signed a memorandum of understanding regarding the potential sale in September.

The federal government had previously supported plans to retool the facility to produce the Jeep Compass. However, Stellantis paused the project in early 2025 and announced in October of that year that the vehicle would instead be manufactured at its Belvidere Assembly Plant in Illinois, United States.

More than 2,000 workers at the Brampton facility have been out of work since operations were halted in 2023 to allow for the retooling project. Stellantis says approximately 1,800 workers remain on layoff, although they have continued receiving 70 per cent of their pay and employee benefits.

Part of the proposed arrangement with Roshel could also allow Stellantis to lease some of the property back.

Union Criticises Government's Response

Unifor National President Lana Payne criticised the federal government for failing to act earlier to prevent the situation from reaching the point of a planned sale.

Payne said workers and other stakeholders had opposed the sale, questioning why the government had not taken stronger action in the weeks leading up to the announcement.

She described the proposed sale as the last possible outcome the union wanted, adding that reversing the transaction would now be considerably more difficult.

Joly indicated that the federal government would be unable to block the sale, despite its disagreement with Stellantis over the funding agreement.

Political Reactions Grow

Prime Minister Mark Carney described the planned sale as a betrayal of workers, arguing that a partial solution to the plant's future did not amount to a comprehensive resolution.

Carney also said his government had been informed of some aspects of the proposed transaction before it was publicly announced.

Meanwhile, Conservative Leader Pierre Poilievre called on Carney to remove Joly as industry minister over the handling of the situation. He also demanded the release of the full 2022 funding agreement, arguing that Canadians deserved to know how much public money was provided and what the government received in return.

The 2022 agreement, announced by the then Trudeau government, provided for up to $529 million in federal support for Stellantis plants in Brampton and Windsor, Ontario, to help increase production of electric and gas-powered vehicles.

The dispute over repayment and the future of the Brampton facility now places the automaker's funding obligations, the government's response and the jobs of affected workers at the centre of a growing disagreement.

CBC News