Stellantis and GM lose Canadian tariff exemptions after shuttering Brampton and Ingersoll plants.
Ottawa to impose duties on U.S.-made vehicles due to unmet production commitments.
Government funding agreements under legal review following Stellantis’ plant withdrawal.
Canada will revoke counter-tariff exemptions for Stellantis and General Motors, forcing both companies to pay duties on U.S.-made vehicles imported into the country after failing to meet production obligations tied to government support.
The federal government notified both automakers Thursday that they no longer qualify for full remission of Canadian counter-tariffs on imported vehicles. The decision follows recent announcements by Stellantis and GM that they would cut production at facilities in Brampton, Ontario, and Ingersoll, Ontario, respectively.
The policy change affects the amount of duty companies will pay on cross-border vehicle imports. Stellantis will be permitted to claim duty remissions on just 50 % of its imports. GM will be limited to a 24.2 % remission quota, according to a source familiar with the decision.
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Under existing trade rules, Canadian tariff remissions were conditional on companies maintaining domestic operations. While Canada repealed several retaliatory tariffs against the United States in September, it retained duties on certain goods such as steel, aluminum, and automobiles, with exemptions granted on a case-by-case basis.
The new restrictions come after Stellantis cancelled plans to build the next-generation Jeep Compass in Brampton, shifting that production to Illinois. The Brampton plant had received federal and provincial funding as part of a retooling agreement, alongside support for an electric vehicle battery plant in Windsor.
General Motors also confirmed it would cease production of its BrightDrop electric delivery vans at its CAMI plant in Ingersoll, putting 1,144 jobs at risk.
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“This decision aligns with the government’s long-standing position: we expect these companies to meet their contractual obligations and respect their commitments towards Canada and their workers,” said the Department of Finance in a news release.
Industry Minister Mélanie Joly met with GM executives in Ottawa Thursday, following earlier meetings with Stellantis’ Canadian leadership. Joly stated the government intends to apply “maximum pressure” to ensure automakers meet their obligations.
Union leaders and industry groups supported the move. Unifor President Lana Payne, whose union represents autoworkers at both affected facilities, said federal pressure is necessary to counter relocation efforts by U.S. executives.
The federal government is also examining legal options related to previous contracts and production commitments made by Stellantis in exchange for public funds.
On Thursday, Prime Minister Mark Carney said the government will not include auto tariffs in current negotiations with the U.S. and expects discussions to resume during the 2026 review of the Canada-U.S.-Mexico Agreement (CUSMA). He added that Canada would take necessary steps to protect domestic workers and the industry if progress stalls.
The tariff changes follow warnings from the Trump administration that it intends to redirect auto production back to the United States through sector-specific trade measures.
Source: Toronto Star
