Canada threatens to sue Stellantis over idled Brampton plant
Canada gave Stellantis 30 days to answer alleged breaches of a federal funding deal after the carmaker agreed to sell its idled Brampton plant, with Ottawa saying hundreds of millions of dollars are at stake.
A 30-day ultimatum
Canada has served Stellantis with a formal notice of default, giving the carmaker 30 days to address alleged breaches of a federal funding agreement or face legal action. Industry Minister Mélanie Joly announced the notice at a news conference in Toronto on Thursday, saying Stellantis violated its contractual commitments to the government and to workers in Brampton, Ontario.
Prime Minister Mark Carney called the situation "unacceptable" and a "betrayal" of workers. "We sent a notice of default and, basically, they have 30 days — or else, of course, we will sue them," Joly told reporters.
The disputed bill
The dispute follows Stellantis agreeing on Monday to sell its idled Brampton assembly plant to Roshel, a Canadian maker of armored vehicles, for an undisclosed amount. Stellantis had scrapped plans to build the Jeep Compass at Brampton and shifted future production to a factory in Illinois, amid United States auto tariffs and other market pressures. The sale, expected to close by the end of the year, would end car manufacturing at the Brampton factory, the Wall Street Journal reported.
Stellantis Canada chief executive Trevor Longley reportedly said on Thursday, according to CBC News, that the company would return $24 million in federal subsidies — far below Ottawa's estimate of what is owed. Stellantis said it remains prepared to work with Unifor, Canada's largest private-sector union, to negotiate a settlement to assist union-represented employees.
- Time to respond30 days
- Stellantis offer to return$24 million
- Ottawa's estimate of what is owedHundreds of millions of dollars
- Milan-listed shares in 2026Down more than 60%
What happens next
The amount owed is disputed: Stellantis offered $24 million, while Ottawa says the carmaker is on the hook for hundreds of millions of dollars. The price of the Roshel sale has not been disclosed, and a Stellantis spokesperson was not immediately available to comment when CNBC contacted the company on Friday morning.
Stellantis owns the Jeep, Dodge, Fiat, Chrysler and Peugeot brands. Its Milan-listed shares are down more than 60% in 2026 so far.
