Ottawa serves Stellantis default notice over Brampton plant

Industry Minister Mélanie Joly says Ottawa is prepared to sue Stellantis to recover “hundreds of millions of dollars” in federal support after the automaker signed a deal to sell its idled Brampton, Ont., assembly plant to defence contractor Roshel.

The federal government served Stellantis with a notice of default on Thursday, Nov. 12, the Canadian Press reported. Joly’s letter gave the company 30 days to show it will correct breaches of a 2022 funding agreement, or she will declare it in default.

“Basically they have 30 days or else, of course, we’ll sue them,” Joly told reporters in Toronto after meeting Stellantis Canada CEO Trevor Longley, the Unifor union and Ontario Premier Doug Ford. “To be frank, I’m fed up.”

Stellantis has offered far less. Longley said in a statement the company “will voluntarily return” $24 million in federal support received for the plant’s original retooling plan. CBC News reported that Joly would not give a figure for what is owed, saying only that Stellantis knows how much, and that government records previously showed roughly $220 million in subsidies went to the company for its Ontario plants.

Joly’s letter says Stellantis breached the agreement by halting Jeep Compass production at Brampton, failing to identify a replacement vehicle, keeping no production at the site and closing the plant. It says the sale to Roshel shows Stellantis is “no longer diligently working in good faith” on a fix, and that she is ending the resolution process. She may add further breaches tied to the sale, which is expected to close by the end of this year.

If the breaches stand, penalties could include termination of the deal and repayment of all or part of the funding plus interest. Ottawa committed up to $529 million in 2022 to retool the Brampton and Windsor plants, and Ontario committed $513 million.

Longley said the sale, which Stellantis announced on Monday, “provides a path to return the facility to productive industrial use” and create jobs with priority hiring for Brampton workers. Roshel CEO Roman Shimonov has said the company is willing to rehire some laid-off Stellantis employees and plans to lease about one-quarter of the site back to Stellantis. Stellantis says about 1,800 workers from the plant remain on layoff.

Unifor national president Lana Payne said the plant is sold and the meeting produced no resolution. “There are, of course, levers that both levels of government potentially could have to reverse that. We didn’t hear that would be the case in this meeting today,” she said. A strike remains a last resort, she said, and the union is not yet in a legal strike position. Members voted 97.3 per cent in favour of a strike mandate last month.

Prime Minister Mark Carney, speaking in Ireland, said being informed of aspects of the sale is not the same as Stellantis delivering a full solution for workers. “A partial solution is a step. It is not a global solution. That is the betrayal,” he said. Conservative Leader Pierre Poilievre called again for Joly to be removed and asked whether the government secured job guarantees in exchange for the money.

Joly said she plans to meet Stellantis global CEO Antonio Filosa and the Ontario government. Joly’s office has said she had no part in negotiating the Roshel deal.

This follows our earlier coverage of the sale of the Brampton plant to Roshel, Carney’s comments on the sale and the strike mandate Stellantis workers gave Unifor. Reporting for this story is from The Canadian Press and CBC News.

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