Canada Threatens Legal Action Against Stellantis Over Funding Agreement

Canada’s federal government is threatening legal action against automaker Stellantis over an alleged breach of its funding agreement, warning that it could seek to recover hundreds of millions of dollars provided to the company.

Industry Minister Mélanie Joly said the government would take Stellantis to court if it fails to meet its contractual obligations. The dispute escalated after Stellantis reached an agreement to sell its Brampton assembly plant to defence-sector company Roshel, raising concerns that more than 2,000 auto workers may lose their opportunity to return to work.

On Thursday, the federal government issued Stellantis a notice alleging a breach of its funding agreement. In a letter, Joly accused the company of violating the terms of a 2022 agreement and gave it 30 days to address the alleged violations. Otherwise, Stellantis could be declared in default of its obligations.

Expressing her frustration, Joly said the development comes at a time when other automakers are demonstrating confidence in Canada by increasing investments in their plants.