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.
A spokesperson for Stellantis, which owns auto brands including Jeep, Dodge, Fiat, Chrysler and Peugeot, was not immediately available to comment when contacted by CNBC on Friday morning.
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 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 reportedly said Thursday that the company would return $24 million in federal subsidies after announcing plans to sell the Brampton plant, a figure that falls well below the government's estimate of what the company owes.
"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 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.
