The federal government in Ottawa is threatening legal action against automaker Stellantis (STLA) after the company sold its main Canadian production plant.
The government of Prime Minister Mark Carney claims that the sale of an idled assembly plant outside Toronto breaches a federal funding agreement that Stellantis entered into.
Carney’s government has given Stellantis 30 days to address its concerns or face legal action.
Stellantis canceled plans to build its Jeep Compass vehicle at the Canadian plant and shifted production to a factory in Illinois due to U.S. auto tariffs on foreign made vehicles.
Earlier this week, Stellantis announced that it was selling the plant outside Toronto to armored vehicle manufacturer Roshel for an undisclosed sum.
The move puts 3,000 unionized autoworkers permanently out of work and has caused widespread anger among labour groups in Canada.
Prime Minister Carney has called the situation at the Stellantis plant a “betrayal” of workers.
However, Stellantis is one of several companies that have shuttered or reduced their operations in Canada amid U.S. tariffs.
Carney’s government is in a legal battle with U.S.-based steelmaker Cleveland-Cliffs (CLF) after it announced in September of this year that it’s laying off 500 workers in Canada due to tariffs.
Earlier this year, General Motors cut the third shift at its assembly plant near Toronto, resulting in roughly 700 layoffs.
And Honda Motor Co. (HMC) has canceled plans for a massive $15 billion Canadian electric vehicle manufacturing complex.
In all, Canadian vehicle production has been cut nearly in half over the last 10 years, from 2.3 million vehicles made in the country in 2016 to 1.2 million in 2025.
STLA stock has declined 64% over the past 12 months to trade at $3.86 U.S. per share.
