Canada Gives Stellantis 30 Days to Settle Funding Dispute or Face Lawsuit Over Brampton Plant Sale
Ottawa has issued a 30-day ultimatum to Stellantis, threatening legal action over the automaker’s decision to sell its idled assembly plant in Brampton, Ontario. The Canadian government claims the company violated federal funding commitments after scrapping local production plans to move work to the United States. Speaking to reporters in Toronto on Thursday, Industry Minister Mélanie Joly confirmed that the government served the carmaker with a formal notice of default. “We sent a notice of default and, basically, they have 30 days — or else, of course, we will sue them,” Joly said. Joly stated that Stellantis broke contractual promises made to both the federal government and Brampton workers when it agreed to sell the facility to armored vehicle producer Roshel. She noted that the decision leaves the automaker “on the hook” for hundreds of millions of dollars. Canadian Prime Minister Mark Carney condemned the move, calling the situation at the Brampton plant “unacceptable” and a “betrayal” of the factory’s workforce.
Production Shifts South Amid Trade Pressure
The clash follows mounting pressure from U.S. President Donald Trump, whose administration has used auto tariffs and trade disputes to push vehicle manufacturing across the southern border. In response to market forces and U.S. Trade policies, Stellantis canceled plans to build its Jeep Compass in Brampton, transferring future assembly of the vehicle to a plant in Illinois. Stellantis also oversees brands such as Dodge, Fiat, Chrysler, and Peugeot. Stellantis announced the sale of the Brampton assembly plant to Roshel on Monday for an undisclosed sum. In a statement, Stellantis Canada CEO Trevor Longley acknowledged the uncertainty surrounding the facility but defended the sale as a viable alternative for the site. He confirmed the company will return $24 million in public funds previously provided for the original retooling plan at Brampton Assembly. However, that figure remains far below the sum the Canadian government claims it’s owed. “We recognize the disappointment and uncertainty surrounding the future of the facility,” Longley said. “While our decision to sell the plant represents a change from the original plans for Brampton, the agreement we have advanced with a Canadian manufacturer provides a path to return the facility to productive industrial use.”
Longley added that the transaction allows the firm, as Canada’s largest automotive employer, to focus resources on maintaining competitive operations in Canada amid tough market conditions.
Financial Strain and Labor Negotiations
The dispute comes during a difficult financial period for the automaker. Stellantis has seen its Milan-listed shares drop by more than 60% so far in 2026. Addressing its workforce, Stellantis acknowledged its commitments to plant staff and stated it’s ready to negotiate a support settlement with Unifor, Canada’s largest private sector union.