Confidential government agreements valued at billions of dollars to support a Stellantis-backed electric vehicle battery plant in Windsor, Ontario, come with numerous stipulations that grant federal authorities the authority to terminate the contracts and potentially demand repayment if breached, according to documents acquired by CBC Windsor. The exact terms of the agreements remain partially redacted, leaving uncertainties regarding guarantees pertaining to the company’s operational presence in Canada, as asserted by elected officials.
Following global automaker Stellantis’ decision to relocate production of a Jeep model from Brampton, Ontario, to Illinois and invest $13 billion in U.S. operations, the content of these undisclosed contracts has faced significant scrutiny in Parliament. Despite Stellantis’ assurances of retaining operations in Brampton, concerns have arisen over potential permanent job losses for the approximately 3,000 workers at the plant, many of whom have been on temporary layoff since 2023 due to facility retooling and ongoing challenges in the Canadian auto industry.
Government officials have affirmed that the agreements with Stellantis incorporate job protection measures, a point of contention repeatedly raised by the official opposition, prompting calls for the Liberal government to disclose the contracts. Unearthed within over 150 pages of government records released in August by the Privy Council Office, the copies of the battery plant agreements were obtained by CBC Windsor through an informal information request process.
The initial agreement, dating back to 2022, between the federal government and NextStar Energy, the entity behind the battery plant, outlines up to $500 million in taxpayer support from the Strategic Innovation Fund (SIF). NextStar, a joint venture between Stellantis and LG Energy Solution based in Seoul, initiated the project in Canada’s automotive hub the same year. Stellantis and LG are both named as guarantors in the agreement.
The subsequent deal, inked in 2023, entails a Special Contribution Agreement between NextStar and the federal government, providing up to $15 billion in production subsidies, with a third of the amount to be contributed by the province. This agreement materialized after NextStar paused construction on the Windsor plant to secure additional public funding, coinciding with a substantial deal struck by the government with Volkswagen for another battery plant in Ontario.
The federal contracts impose a range of conditions, including requirements for NextStar to maintain a set number of full-time employees, engage in capital expenditures in Canada, and seek ministerial approval for changes in company ownership. The agreements also delineate circumstances constituting an “Event of Default,” with detailed dispute resolution processes that could lead to contract termination if unresolved.
Despite assertions that the production subsidies from the province are in the form of tax breaks, the federal contract specifies cash payments. The ongoing financial commitments and operational obligations of NextStar in Windsor are emphasized in the agreements, with potential repercussions for non-compliance, including repayment demands and contract termination.
While the exact amount disbursed to NextStar by the federal government remains undisclosed, public accounts indicate that $268 million of the $500 million SIF funding had been allocated by the previous year. Finance Minister François-Philippe Champagne hinted at potential efforts to recover funds disbursed under agreements with Stellantis, emphasizing the government’s intent to uphold contractual rights.
The scrutiny over government contracts with Stellantis is not unprecedented, as past controversies involving foreign workers at the Windsor battery plant prompted a House committee request for contract copies to assess their terms. The redacted versions obtained by CBC Windsor appear to be the documentation provided in response to that inquiry, with another House committee recently demanding access to the agreements within a specified timeframe.
