Confidential government agreements worth billions of dollars to support a Stellantis-backed electric vehicle battery plant in Windsor, Ontario, are subject to numerous conditions that grant federal authorities the authority to terminate contracts and potentially demand repayment if breached, as per documents obtained by CBC Windsor.
However, the extent of guarantees related to the company’s operations in Canada remains unclear due to redacted sections within the contracts.
The content of these undisclosed contracts has attracted significant attention in Parliament following Stellantis’ announcement of relocating production of a Jeep model from Brampton, Ontario, to Illinois while investing $13 billion in U.S. operations.
Despite assurances from Stellantis about maintaining operations in Brampton, concerns persist about potential job losses for the approximately 3,000 workers at the plant, especially amid ongoing U.S. tariffs affecting the Canadian auto industry.
The federal government and NextStar did not provide responses to inquiries before the article’s publication.
The agreements for the battery plant were discovered within a release of government records by the Privy Council Office in August, obtained through an access to information request by CBC Windsor.
The first contract, dated 2022, between the federal government and NextStar Energy involves up to $500 million in support through the Strategic Innovation Fund (SIF). NextStar, a collaboration between Stellantis and LG Energy Solution, commenced the project in Canada in the same year with both companies as guarantors.
The second agreement, signed in 2023, is a Special Contribution Agreement between NextStar and the federal government, entailing up to $15 billion in production subsidies, a third of which is contributed by the province.
Following a pause in construction to secure additional public funding, the second deal was finalized. The contracts contain clauses outlining various scenarios that would constitute an “Event of Default,” with detailed resolution processes that could lead to contract termination if unresolved.
Requirements within the contracts include job creation targets, maintaining ownership and operations in Windsor, and specific conditions regarding financial obligations and potential repayments in case of default.
The government has not disclosed the total funding provided to NextStar thus far, but $268 million of the $500 million SIF funding had been disbursed by the previous year.
Finance Minister François-Philippe Champagne has hinted at the possibility of recovering funds under the agreements with Stellantis, emphasizing the government’s commitment to enforcing contractual rights.
The government’s contracts with Stellantis have garnered previous attention, notably during a controversy over foreign workers at the Windsor battery plant in 2023, prompting requests from House committees for contract copies. The redacted copies revealed by CBC Windsor seem to be the documents provided in response to those requests. Another House committee has also demanded access to the agreements, setting a two-week deadline for their provision.
