Confidential government agreements worth billions of dollars to support a Stellantis-backed electric vehicle battery plant in Windsor, Ontario, come with numerous conditions that allow federal officials to terminate the deals and potentially demand repayment if breached. Some details within the contracts remain undisclosed due to redactions, leaving certain terms unknown.
The contracts have faced scrutiny in Parliament following Stellantis’ decision to move production of a Jeep model from Brampton, Ontario, to Illinois and invest $13 billion in U.S. operations. Concerns have arisen about potential job losses at the Brampton plant, especially with ongoing U.S. tariffs impacting the Canadian auto industry.
The government asserts that the agreements include job protections, a claim that has prompted the official opposition to call for the release of the contracts. Copies of the battery plant agreements were uncovered within a batch of government records released by the Privy Council Office last August in response to an access to information request.
The initial deal, dating back to 2022, involves an agreement between the federal government and NextStar Energy, the entity behind the battery facility, to provide up to $500 million in taxpayer support through the Strategic Innovation Fund (SIF). NextStar, a joint venture between Stellantis and LG Energy Solution, commenced the project in Canada’s automotive hub that same year.
A subsequent deal signed in 2023, known as the Special Contribution Agreement, outlines up to $15 billion in production subsidies, with a portion funded by the province. This agreement followed NextStar pausing construction on the Windsor factory to secure additional public funding amid competitive incentives offered by the U.S. government.
The government has emphasized that the production subsidies carry conditions, including Stellantis upholding existing commitments in Canada, particularly at the Brampton plant. Industry Minister Mélanie Joly has hinted at potential legal action against Stellantis if these commitments are not met.
The contracts include various stipulations, such as employment targets, supplier encouragement in Canada, and restrictions on changes in company ownership without ministerial consent. The agreements also oblige NextStar to maintain ownership of the Windsor plant and make undisclosed capital expenditures in Canada.
While the federal government has not disclosed the exact amount disbursed to NextStar, public accounts indicate $268 million of the $500 million SIF funding has been allocated so far. Finance Minister François-Philippe Champagne has suggested the government may seek to recover funds granted under the agreements with Stellantis.
The government’s dealings with Stellantis have attracted prior attention, including controversies over foreign workers at the Windsor plant, prompting parliamentary inquiries and demands for contract transparency. The redacted copies obtained by CBC Windsor are believed to be the documents provided to the House committee in response to these requests.