Ottawa declares Stellantis in default after Brampton plant sale
The automaker's plan to sell its idled Ontario facility to an armoured vehicle maker violates a 2022 subsidy agreement, the industry minister said.
OTTAWA · Industry Minister Mélanie Joly has declared Stellantis in default of a 2022 funding agreement after the automaker announced its intention to sell its idled Brampton, Ont., plant to an armoured vehicle manufacturer. In a letter to the company's CEO, Joly said the government is terminating a resolution process and that the planned sale indicates Stellantis is not working in good faith. The company has 30 days to take corrective action or the government could seek to terminate the agreement and recoup subsidies. Stellantis had already announced it would voluntarily repay at least $220 million in government funding.
"I must conclude that Stellantis is no longer diligently working in good faith to prepare a satisfactory plan under the Resolution Process. Accordingly, the Resolution Process is terminated," Joly's letter reads. The minister's spokesman, Mathis Denis, said the government had been negotiating with Stellantis for a year but determined the automaker violated the terms of the agreement. "This is not the outcome we wanted, and we have no choice but find Stellantis in default of their obligation," Denis said. Stellantis and Roshel Inc. signed a memorandum of understanding regarding the potential sale in September, and the automaker announced its intent to proceed on Monday. The 2022 agreement saw the federal government commit up to $529 million for Stellantis plants in Brampton and Windsor, Ont., to help retool for increased production of electric and gas-powered vehicles. Stellantis idled the Brampton plant in late 2023 to retool for the Jeep Compass, but paused that plan in early 2025 and later announced the vehicle would be built in Illinois instead.
More than 2,000 workers at the Brampton plant have been on layoff since 2023, continuing to receive 70 per cent of their pay and benefits. Ardis Snow, the plant's Unifor chairperson, said the sale news was devastating for workers facing financial hardship and mental-health challenges. "They just want to come back to work," Snow said. He said about 2,200 employees remain on layoff, and the pay they receive does not go far in the Greater Toronto Area, with some having moved to more affordable regions.
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"Our members are struggling," Snow said. "I've cried with my members. I've cried for my members." He said some who have sought new jobs are offered work paying $25 an hour, compared to the $45 they made at Stellantis, and others see a path to a full pension disappearing. Snow vowed to lead efforts to unionize any workforce hired at the Brampton plant under Roshel, stating the defence contractor's plants do not pay close to what Unifor members make at car plants.
Prime Minister Mark Carney said Thursday his government had been informed of "some aspects" of Stellantis's plan before the deal was announced. Conservative Leader Pierre Poilievre has called on Carney to remove Joly as minister over the plant sale and reiterated that call on Thursday. "Why not release the deal, Mr. Carney? Your government handed over our money. Canadians deserve to know how much they paid and what they got in return," Poilievre said during a news conference in Calgary.
Joly's office has insisted the minister "had no part in negotiating the deal with Stellantis or Roshel" and did not meet with the armoured vehicle manufacturer. The minister is attending a meeting in Toronto on Thursday with Unifor, Stellantis and Ontario government officials in an attempt to find a way forward for laid-off workers. Yadude Books reported earlier this month that Unifor believed a sale to Roshel was underway after the automaker refused to confirm or deny it. Roshel, which is based in Brampton, says it will pursue defence and automotive contracts for the plant, using the existing assembly line and equipment. Company owner Roman Shimonov said the plant could once again employ thousands and that he is pursuing a federal light utility vehicle contract worth $4.9 billion. The sprawling plant was built by American Motors Corp. and acquired by Chrysler, now Stellantis, in 1987. Its final products were the Dodge Charger and Challenger muscle cars.
With files from The Canadian Press, CBC News and The Globe and Mail