Industry Minister Melanie Joly addresses media at Sheraton Center Toronto Hotel following sale of Stellantis, November 12, 2026.
Sophie Bouquillon | Toronto Star | Getty Images
Canada has threatened to sue auto giant Stellantis over the planned sale of an idled assembly plant in Brampton, Ontario, alleging breaches of a federal funding agreement after the carmaker announced plans to shift production to the U.S. amid President Donald Trump‘s trade war.
Speaking at a news conference on Thursday, Industry Minister Mélanie Joly said the government had served Stellantis with a formal notice of default, giving the company 30 days to address its concerns 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.
Joly said Stellantis had violated its contractual commitments to the Canadian government and the workers at Brampton by announcing an agreement to sell the plant to armored vehicle manufacturer Roshel earlier in the week. She added that the company was now “on the hook” for hundreds of millions of dollars over the move.
Canadian Prime Minister Mark Carney has described the situation at the Brampton plant as “unacceptable” and a “betrayal” of its workers.
The standoff comes as the U.S. and Canada remain locked in a bitter trade dispute, with Trump repeatedly putting pressure on automakers to move vehicle production south of the border.
Stellantis, which owns auto brands including Dodge, Fiat, Chrysler and Peugeot, had scrapped plans to build its Jeep Compass at the Brampton plant and shifted future production to a factory in Illinois amid U.S. auto tariffs and other market pressures.
Stellantis Canada CEO Trevor Longley said in a statement shared with CNBC that the company would return $24 million it received in government support for the Brampton Assembly’s original retooling plan. This amount, however, falls significantly short of the Canadian government’s own estimate of what the company owes.
New York-listed shares of Stellantis year-to-date.
“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.
“As Canada’s largest automotive employer, this decision also allows Stellantis to focus its resources on sustaining competitive manufacturing operations in Canada in the face of challenging market realities,” he added.
Jeep Grand Cherokee SUVs at a dealership in Mississauga, Ontario, Canada, on Friday, Oct. 17, 2025.
Bloomberg | Bloomberg | Getty Images
Stellantis said Monday that it had agreed to sell the Brampton assembly plant to Roshel for an undisclosed amount.
It also acknowledged its obligations to employees at the facility and said it remains prepared to work with Unifor, Canada’s largest private sector union, to negotiate a settlement to assist union-represented employees.
Stellantis stock has fallen sharply since the start of the year, with its Milan-listed shares down more than 60% for 2026 so far.
— CNBC’s Michael Wayland contributed to this report.