Canada has warned Stellantis that it could face legal action after the carmaker’s decision to sell its idled Brampton assembly plant deepened a dispute over public funding and the future of its workers.
Industry Minister Mélanie Joly said the federal government had issued the company with a notice of default alleging breaches of a 2022 funding agreement. The notice, dated 12 November, gives Stellantis 30 days to demonstrate that it will correct the conditions identified by the government.
Joly said Ottawa was prepared to sue. The letter says the government could terminate the funding agreement and demand the return of all or part of the money provided. The notice sets out the government’s position; it is not a court finding that Stellantis has breached the agreement, and a threat of action does not itself mean a lawsuit has been filed.
The action follows a 9 November agreement by Stellantis to sell the Ontario plant and associated equipment to Roshel, a Canadian manufacturer of armoured vehicles. The companies did not disclose a price. Stellantis said the transaction was expected to close by the end of 2026, subject to conditions including applicable government and regulatory requirements.
Dispute over public funding
The federal government committed up to C$529 million in 2022 towards a Stellantis investment covering the Brampton and Windsor facilities. Ontario separately committed up to C$513 million. The plans were intended to modernise the plants and support production of electrified vehicles.
Those commitments are ceilings for a project involving both sites. They should not be confused with the amount actually paid for Brampton, or with a final determination of what the company may have to return.
Joly has said Stellantis is responsible for hundreds of millions of dollars, without giving a precise figure. Stellantis Canada chief executive Trevor Longley said the company would voluntarily return C$24 million in federal support received for the original Brampton retooling plan. The two statements describe different sums, and the amount ultimately recoverable remains unresolved.
The minister’s letter points to the absence of production at the facility and the failure to identify a replacement vehicle. A government-led resolution process has also been terminated. Joly said officials intended to meet the company’s global chief executive, Antonio Filosa, with the Ontario government.
A partially redacted copy of the 2022 funding agreement contains a provision concerning circumstances beyond Stellantis’s reasonable control that make the plant commercially unviable and its efforts to find alternative work for the site. Whether the provision applies is unresolved, and not all terms in the copy are visible. Before the notice, Stellantis declined to comment on specific legal interpretations or discussions with the government while those matters were being addressed.
Brampton was closed for retooling, with the Jeep Compass originally planned for production there. In October 2025 Stellantis announced that the model would instead be made at its Belvidere plant in Illinois. Canada’s government has argued that the subsequent approach to the Brampton site did not satisfy the company’s commitments.
Workers seek clarity
The plant’s uncertain future has left laid-off production workers waiting for a resolution. Stellantis says about 1,800 workers from the Brampton plant remain on lay-off and have continued to receive 70 per cent of their pay, as well as benefits, since operations stopped for retooling.
Unifor, the union representing workers at the site, has opposed the sale and questioned whether enough was done to preserve automotive production. Its national president, Lana Payne, criticised the timing of the government’s response after a meeting involving the company, the union and federal and provincial representatives. The meeting did not produce a resolution.
Roshel has said it is willing to hire some of the laid-off Stellantis employees. Stellantis has said the proposed deal provides a route back to productive industrial use and that it wants to work with Unifor towards a negotiated resolution for affected staff. The prospect of some new jobs does not, by itself, settle the position of every worker.
Prime Minister Mark Carney has described the proposed sale as a partial solution rather than a full answer for the workforce. The dispute is unfolding against pressure on Canada’s automotive sector from US tariffs and a wider push by President Donald Trump for manufacturers to shift production to the United States.
For now, the notice begins another formal stage in a dispute that predates this week’s sale agreement. Whether the parties reach a settlement, and what happens to the plant and the disputed funding, remain open questions.
