Canada Threatens Legal Action Against Stellantis Over Sale of Brampton Plant

Industry Minister Mélanie Joly announced Thursday that the federal government has issued a formal notice of default to Stellantis, demanding the company reverse its sale of an idled assembly plant in Brampton, Ontario.

The government warned that if the automaker fails to comply within 30 days, it will initiate legal action to recover hundreds of millions of dollars in federal support provided for the facility's retooling.

Stellantis announced on Monday that it finalized the sale of the plant to Roshel Inc., a manufacturer of armoured vehicles, for an undisclosed amount.

The Brampton facility has been idled since 2023, leaving approximately 2,200 to 3,000 workers on layoff benefits after the company abandoned plans to produce the Jeep Compass there.

The dispute underscores the ongoing economic friction between Canada and the United States, as automakers adjust production strategies in response to tariffs and shifting trade policies under President Donald Trump.

"I’m fed up. Workers are fed up," said Mélanie Joly, the Industry Minister, during a press conference in Toronto following a failed meeting with company officials and union representatives.

Prime Minister Mark Carney previously characterized the sale as a betrayal of the workforce and the company's obligations to Canada.

Trevor Longley, the chief executive officer of Stellantis Canada, stated in a release that the company would voluntarily return $24 million in federal support received for the original retooling project.

"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," said Longley.

Lana Payne, the national president of the Unifor union, expressed frustration that the company proceeded with the sale despite repeated requests to keep the plant idle until trade conditions improved.

"We are in the same place," said Lana Payne, the national president of Unifor. "The company has sold the plant."

Stellantis shifted its planned Jeep Compass production to a factory in Belvidere, Illinois, after the United States imposed 25 percent tariffs on Canadian-made vehicles in early 2025.

The federal government and Stellantis remain at odds over the total amount owed, as the company's offer to return $24 million falls significantly short of the government's expectations.

"We sent a notice of default and, basically, they have 30 days — or else, of course, we will sue them," said Joly.

It remains unclear if the company will attempt to negotiate a settlement or proceed with the transfer to Roshel, leaving the future of the Brampton site and its former employees unresolved.