Canada launching dispute against Stellantis for moving production from Brampton plant

Ottawa is launching a dispute resolution process against Stellantis over the company’s decision to move planned vehicle production from its Brampton plant to the U.S., Industry Minister Mélanie Joly said Monday.

Joly told the House of Commons industry committee she sent the company a letter informing it Ottawa is initiating the formal, 30-day settlement process to “recover” taxpayer funds and “bring back production” to the Brampton facility.

“These actions are not symbolic,” Joly told the committee in French. “They are the direct consequence of the violation of clear commitments.”

Stellantis announced last month it is moving planned production of its Jeep Compass from Brampton to Illinois, which prompted the federal government to threaten legal action.

Ottawa argues the move by Stellantis breached federal contracts tied to manufacturing in Brampton and Windsor.

The move by the multinational auto giant is happening as U.S. President Donald Trump seeks to use tariffs to pillage key Canadian economic sectors, such as automotive and steel, and pull manufacturing jobs into the U.S.

Some 3,000 workers remain furloughed at the Brampton plant; they were laid off while the company was revamping its facility to prepare for the new production line. That work has been on pause since February.

“If the Brampton facility ceases its production, there will be a violation of a contract,” Joly said, after Conservative MP Rachel Dancho pressed her for details.

Joly was grilled by MPs over documents detailing federal funding agreements tied to Stellantis.

One is a $15-billion special contribution agreement between NextStar Energy and the federal government for a battery plant for electric vehicles; a third of the money is supposed to come from the Ontario government, with the remaining two-thirds coming from the federal government. NextStar is a joint venture between LG Energy Solution and Stellantis.

Another agreement sets out how the federal government would provide NextStar with some $500 million in funding through the strategic innovation fund.

Quizzed on funding agreement details in a series of testy exchanges, Joly said the strategic innovation fund agreement ties federal support to manufacturing in Windsor and Brampton, but she did not elaborate.

High-level bureaucrats from Innovation, Science and Economic Development Canada refused to explain anything to the committee about job commitments in the agreements, adding that Ottawa must first clear the release of that information with Stellantis.

“There’s commercial confidential clauses in various agreements that I’m not at liberty of sharing the details of today,” said Deputy Minister Philip Jennings. He also said the department is in discussions with Stellantis about disclosing as much of those agreements as possible.

The federal government has dispersed about $42 million to NextStar — significantly less than the $15 billion figure — said Charles Vincent, a senior assistant deputy minister in the department. He told the committee the $15-billion figure is linked to sales of battery cells and modules, but the Windsor facility has not yet started making the cells.

Conservative MPs expressed frustration throughout the hearing over the lack of specifics after Ottawa promised billions of dollars in subsidies to a foreign company that is now offshoring production.

Conservative MP Brad Vis asked Jennings if the “sweetheart deal” Ottawa signed with NextStar was “the worst policy blunder in the history of Canada.”

The company’s president, Jeff Hines, testified last week that the company’s decision to move its Jeep production out of Canada was “not taken lightly.”

Hines told the committee his company is looking at options to bring laid-off workers back to their jobs.

Joly said she is working closely with labour unions such as Unifor — something unusual for a federal industry minister, who normally interfaces mostly with businesses. And she said she has Vic Fedeli, Ontario’s economic development minister, on “speed dial” because the auto sector that forms “the very backbone of the Ontario economy” is at stake.

“If we don’t fight for all of these jobs and for the auto industry, it will have an impact, yes, on Ontario, but as a Quebecer I understand it will have an impact on the rest of the country,” Joly said.

The City of Brampton says every auto job in teh city generates “five to six spin-off jobs.”

Stellantis has said it has plans for the Brampton plant following the U.S. automaker’s announcement that it plans to shift production of the new Jeeps to the U.S., but Unifor Local 1285 President Vito Beato told Brampton City Council earlier this month he was skeptical following years of assurances from the company that the Jeeps would be made in Brampton.

The city is seeking “intervenor status” in the matter, which “would allow the City of Brampton to join in any legal or regulatory hearings related to the Stellanits decision, ensuring local concerns are reflected.”

The Brampton plant’s union council says it “unequivocally rejects” Stellantis moving Jeep production away from Brampton, and that members “will take all necessary steps to reverse this decision, in coordination with Unifor’s national leadership.”

– With files from INsauga.com