Ottawa launches a 30-day dispute process after Stellantis moves Jeep Compass production to the U.S., aiming to recover billions in subsidies.
Ottawa launches action against Stellantis
The federal government has begun a formal dispute resolution process against automaker Stellantis N.V. after the company announced plans to shift Jeep Compass production from Brampton, Ontario, to Belvidere, Illinois.
Industry Minister Mélanie Joly told a parliamentary committee on Monday that the decision breaches contractual commitments linked to billions in taxpayer-funded incentives.
Billions in public funds on the line
Ottawa and the Ontario government jointly committed about $15 billion to help Stellantis and partner NextStar Energy, a joint venture with LG Energy Solution, build an electric-vehicle battery plant in Windsor.
They also offered hundreds of millions more to retool the automaker’s Windsor and Brampton facilities for EV production.
Joly said the federal government will now take “the next step under the contracts to recover Canadian taxpayers’ money.”
The trigger for the government’s move
The conflict surfaced in September when Stellantis revealed that plans to build the next-generation Jeep Compass in Brampton were being scrapped.
Production is instead being relocated to Illinois, a move Ottawa says violates conditions tied to Canadian subsidies.
Joly confirmed that the 30-day formal dispute period began Monday, marking the start of the process to restore jobs and production in Brampton.
Confidential contracts under scrutiny
Officials from Innovation, Science and Economic Development Canada said details of the Stellantis contracts remain confidential due to commercial sensitivity.
Assistant Deputy Minister Stephanie Tanton told MPs that the government is working with the company “to be able to disclose the agreement,” while Deputy Minister Philip Jennings acknowledged that some contract terms “appear to be at risk of breach.”
Automaker denies job losses
Stellantis maintains that “no jobs have been lost” in Brampton, insisting that the plant is “paused, not closed.”
Company spokesperson LouAnn Gosselin said employees are being offered transfers to other Stellantis facilities and that the company continues to work “constructively with government partners” to secure Brampton’s long-term future in automotive manufacturing.
Political pressure builds over transparency
Conservative MP Raquel Dancho criticized the Liberal government for withholding details of multi-billion-dollar subsidies, calling for greater accountability.
Joly responded that Ottawa and Ontario remain united in seeking to restore production in Brampton, adding, “We all want the same thing—bringing back production and protecting Canadian autoworkers.”
Next steps in the dispute
The government’s 30-day dispute resolution period is now underway.
If unresolved, Ottawa may pursue further legal or financial remedies under its contract with Stellantis to recover subsidies or compel production commitments.
As Canada continues its transition to electric-vehicle manufacturing, the outcome of this dispute could shape how future auto-sector deals are structured and enforced.
