Canada has threatened to sue automaker Stellantis after the company abandoned plans to manufacture Jeep vehicles at its Brampton, Ontario, plant and moved production to the United States, exposing the mounting consequences of President Donald Trump’s protectionist trade war for Canadian workers and the country’s automotive industry.
Industry Minister Mélanie Joly said Thursday that the federal government had issued Stellantis a formal notice of default, giving the company 30 days to address alleged violations of its funding agreement or face legal action.
“We sent a notice of default and, basically, they have 30 days — or else, of course, we will sue them,” Joly told reporters in Toronto.
The dispute underscores how Trump’s aggressive tariff policies and pressure on foreign automakers are reshaping North American manufacturing, encouraging companies to shift production to the United States while leaving Canadian workers facing uncertainty over their jobs and the future of major industrial facilities.
Joly accused Stellantis of breaking its contractual commitments to the Canadian government and Brampton workers by announcing plans to sell the idled assembly plant to Canadian armored vehicle manufacturer Roshel.
She said the automaker was now “on the hook” for hundreds of millions of dollars over its decision, significantly more than the $24 million in federal subsidies that Stellantis Canada CEO Trevor Longley reportedly said the company was prepared to return.
Canadian Prime Minister Mark Carney has also sharply criticized the company’s decision, describing the situation at the Brampton facility as “unacceptable” and a “betrayal” of its workers.
Stellantis had previously scrapped plans to manufacture its Jeep Compass at the Ontario plant and shifted future production to a factory in Illinois, amid US automotive tariffs and other market pressures.
The relocation comes as Trump continues to push manufacturers toward American production through his administration’s protectionist trade agenda, placing Canadian industrial investment and employment under increasing pressure.
Stellantis announced Monday that it had reached an agreement to sell the Brampton assembly plant to Roshel for an undisclosed amount, effectively abandoning its previous production commitments at the facility.
The company attempted to present the sale as a way to restore industrial activity at the site, despite the uncertainty created by its decision to withdraw from the original manufacturing plans.
“We recognize the disappointment and uncertainty surrounding the future of the facility. 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,” Longley said, according to CBC News.
Stellantis also acknowledged its obligations to employees and said it remained prepared to negotiate with Unifor, Canada’s largest private-sector union, over a settlement to assist union-represented workers.
However, the company’s reported offer to return $24 million in federal subsidies has fallen far short of the Canadian government’s assessment of its financial obligations, intensifying the confrontation between Ottawa and the automaker.
The dispute is unfolding against the backdrop of an increasingly hostile US-Canada trade relationship, with Trump’s tariff policies and repeated demands for manufacturers to move production south of the border threatening to undermine Canada’s position in the North American automotive industry.
Meanwhile, Stellantis has also faced severe financial pressure, with its Milan-listed shares falling more than 60% since the beginning of 2026.