Canada threatened on Thursday to sue automaker Stellantis and recover hundreds of millions of dollars in government funding, after the company shifted planned vehicle production to the United States and agreed to sell its idled assembly plant in Brampton, Ontario. The Stellantis Brampton plant dispute has become a flashpoint in President Donald Trump’s trade war with Canada. Industry Minister Melanie Joly said Ottawa had issued the company a formal notice of default.
Joly said the notice over the Stellantis Brampton plant gives the company 30 days to address the alleged breaches of its funding agreement or face legal action. She told reporters in Toronto that Ottawa had sent a notice of default and that the company had 30 days or else. She added that Canada would sue the company. Joly is seeking a response by December 12.
What Ottawa says Stellantis did wrong
Joly said Stellantis broke the agreement by abandoning production at Brampton without identifying a replacement vehicle. Her letter to Trevor Longley, chief executive of Stellantis Canada, said the company had halted Jeep Compass production at the plant, failed or refused to identify a replacement vehicle, kept no production at the facility and closed the plant. The letter said the planned sale to Canadian armoured vehicle maker Roshel showed the company was no longer negotiating in good faith.
Stellantis announced on Monday that it had agreed to sell the Brampton plant to Roshel. The deal is expected to close by the end of the year if it goes ahead as planned. The company offered to repay government funding received for the Brampton project but declined to disclose the amount. Stellantis Canada later said it would voluntarily return 24 million dollars in federal government support received for the plant’s original retooling plan.
The funding behind the Stellantis Brampton plant
Canada committed up to 529 million Canadian dollars, about 380 million United States dollars, in 2022 to help Stellantis retool its Brampton and Windsor plants for electric vehicle production. Ontario pledged 513 million Canadian dollars under the same accord. Federal money actually paid to Stellantis stood at roughly 222 million Canadian dollars as of December 2025. At least 55 million dollars of that total was tied to Windsor. Joly warned that if Stellantis stays in breach, it could face penalties including termination of the federal funding deal and a requirement to repay all or part of the funding it has received, plus interest.
The Stellantis Brampton plant has sat idle since 2024, when production stopped so the facility could be retooled to build the next-generation Jeep Compass. Stellantis paused that plan in February 2025, one month after Trump returned to office and began issuing tariffs on imports from Canada and other countries. The company later said it would shift production of the Jeep Compass to Illinois. The company gave trade and market conditions as the reason. More than 2,000 Canadian workers were left without jobs.
Workers and politicians react to the Stellantis Brampton plant sale
Prime Minister Mark Carney accused Stellantis of betraying Canadian workers and called the sale of the Stellantis Brampton plant a partial solution that failed to meet the company’s obligations. Lana Payne, president of Unifor, the union that represents Stellantis workers in Canada, said a meeting on Thursday with the company, the union and both governments failed to produce a resolution. Payne said the time to stop the sale had passed. She said the sale has occurred and that reversing it would be doubly difficult.
The Stellantis Brampton plant dispute has hardened positions on both sides. Stellantis workers in Canada voted last month to give their union a mandate to strike, with 97.3 percent of members who took part in the vote in favour of authorising labour action. The union represents more than 9,000 Stellantis workers across Canada. Pierre Poilievre, leader of the Conservative Party, has pressed the government to make its agreements with Stellantis public.
Why the Stellantis Brampton plant matters to Canada
The Stellantis Brampton plant matters to Canada because autos are the country’s second-largest export, and Carney has noted that the sector employs 125,000 Canadians directly and almost 500,000 more in related industries. Trump’s tariffs have put pressure on an industry that is deeply integrated with manufacturing in the United States. Trump has repeatedly pushed automakers to move production south of the border. Joly said federal and Ontario officials plan to meet with Stellantis’s global chief executive.
Stellantis is the world’s fourth-largest carmaker. The company said in September it was considering a sale of the Brampton factory to Roshel because a return to car production there was financially unfeasible. The dispute over the Stellantis Brampton plant now turns on whether the company meets the terms of its funding agreement within 30 days.