Joly says feds will serve Stellantis with notice of default on funding contracts

The federal government is escalating its fight with automotive giant Stellantis over the company’s decision to move some production to the U.S., despite receiving hundreds of millions of dollars in Canadian taxpayer incentives in recent years.

Industry Minister Mélanie Joly said Thursday that the government will serve Stellantis with a notice of default under the funding contracts related to projects in both Windsor and Brampton, Ont.

The move, which Joly announced while speaking before the House of Commons’ international trade committee, comes amid the ongoing fallout from Stellantis’s revelation in October that it’s scrapping plans to build a Jeep model at its Brampton plant, leaving the roughly 3,000 workers there without a vehicle to build — at least for now.

“When it comes to protecting auto jobs, we will not let these industries down,” Joly said in opening remarks. “We’ll stand firm for the sake of our workers, our industries and our nation because defending these jobs means defending Canada’s economic backbone and the livelihoods of countless families.”

Last month, Joly said the government had initiated a formal dispute resolution process with Stellantis as a result of its decision.

The global carmaker has insisted that it has not shuttered the Brampton plant, and that it’s working with the government and other partners “to find viable solutions” for the facility.

Stellantis has received at least $222 million under the deal to re-tool both the Brampton and Windsor plants. NextStar Energy, a joint venture between Stellantis and South Korean firm LG Energy Solution, has also received more than $530 million in federal funding for an electric vehicle battery plant in Windsor.

Joly has maintained that those contracts included job guarantees for Brampton, but not all of the agreements have been made public.

At a separate parliamentary hearing happening at the same time Thursday, a Stellantis executive said she had not yet seen Joly’s announcement, but insisted the company is honouring its commitments.

“We do not agree that we are in breach of contract,” said Teresa Piruzza, director of external affairs and public policy at FCA Canada Inc., the Canadian arm of Stellantis.

Piruzza repeatedly said the Brampton plant is “on an operational pause,” meaning that Stellantis continues to “review the operations at that plant in terms of what the plan is for production moving forward.”

She argued that the company’s investments at the Windsor plant, including the re-addition of a third shift, illustrate Stellantis’s ongoing commitment to Canada — and its compliance with the deal.

Piruzza said hiring for the third shift will create 1,400 to 1,500 new jobs, and that the process began last month. The shift will start early next year, she said.

Stellantis exec contradicts government official

Piruzza was speaking in-person before the House’s government operations and estimates committee after failing to appear before the panel via videoconference last week, which Stellantis attributed to technical problems — a justification some members questioned at the time.

But chair Kelly McCauley, the Conservative MP for Edmonton West, appeared to strike a softer tone on Thursday, saying IT issues are “relatively common” with the committee’s Zoom meetings.

Piruzza said the technical problems were outside her and Stellantis’s control. “I know you were frustrated by my non-attendance,” she said Thursday. “Believe me, I was frustrated as well.”

Piruzza was there to discuss Stellantis’s re-tooling deal with the federal government. MPs on the panel had asked for weeks for unredacted copies of the 2022 contract and received paper copies on Thursday that they were instructed not to share.

Stellantis has no problem with parliamentarians seeing the unredacted deals, Piruzza said, “with appropriate confidentiality safeguards in place.”

The committee previously got copies that some members said contained redactions that masked key sections of the deal.

Those redactions of commercially sensitive information were first suggested by Stellantis, top officials from Innovation, Science and Economic Development Canada — Joly’s department — said at last week’s meeting.

But on Thursday, Piruzza said it was the other way around. “The government proposed redactions and we agreed to the proposed redactions as appropriate,” she said.

At the end of the hearing, committee members discussed the possibility of having the department officials return to speak to the apparent contradiction, but did not make any firm plans.

On Thursday, Joly also clarified that she has read the full Stellantis contracts, following testimony from the department officials last week that suggested otherwise. She said she was not in her position as industry minister at the time the deals were signed and therefore hadn’t seen them then, but has read them since — saying she did so in mid-October when the issues with Stellantis arose.

“I was in fighting mode, and I was finding how to make sure that we would make Stellantis on the hook,” she said. “And what was clear in that contract is that the investments in the battery plant, which are super important, which we stand for and will continue to defend, were linked to the Brampton facility.”