Good morning. The federal government is threatening legal action against Stellantis over its decision to relocate Jeep Compass production from Brampton, Ont., to Illinois, a shift that leaves thousands of Ontario workers in limbo and underscores Canada’s struggle to advance trade talks with Washington. That’s in focus today – plus, the risks of a broad shift against immigration.
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In the news
Economic sovereignty: Trump’s equity investments in Canadian critical mineral companies are raising the stakes for Ottawa.
Economic anxiety: Desjardins Group’s new chief executive warns against being fatalistic about the tariff war, saying he’s “not thinking about nightmares.”
Economic hope: Finance Minister François-Philippe Champagne says he’s “very confident” about Canada’s prosperity.
On our radar
- Bank of Canada Governor Tiff Macklem is speaking to a think tank in Washington today about Canada’s economic outlook, which is full of reasons to be both anxious and hopeful.
Unifor national president Lana Payne and former Stellantis COO Mark Stewart speak to media at the automaker's Brampton plant in July, 2023.Chris Young/The Canadian Press
In focus
Stellantis drives south
After a 2023 news conference in Brampton, Ont., Unifor president Lana Payne climbed into the driver’s seat of a black Dodge as Mark Stewart, then-chief operating officer of Stellantis, took shotgun. Minutes earlier, Stewart had reaffirmed that the automaker would live up to the agreements it made with the federal and Ontario governments under their shared auto-sector funding deal.
At that moment, it felt as though Canadian autoworkers and governments had retaken the wheel after years of uncertainty – including contract renegotiations, pandemic-era shutdowns and the threat of permanent plant closings that had defined the previous decade. The industry had drawn new investment pledges from Stellantis, Honda and others, backed in part by Ottawa’s plan to build an electric-vehicle supply chain anchored in southern Ontario.
Roadtrip
Much of that vision stemmed from a 2022 announcement of a $3.6-billion investment in the auto giant, supported by roughly $1-billion in combined government funding. “Big shout-out to the provincial government and the feds for coming together to secure the next 80 to 100 years in Canada,” Stewart said at the press conference. The investments, promoted jointly by Ottawa and Queen’s Park, were presented as a shared vision for securing jobs and transforming Ontario’s auto sector for the next generation.
Stellantis pledged to retool its Windsor and Brampton assembly plants and build two new R&D centres for electric-vehicle and battery technology. Work in Windsor has advanced, with expanded facilities and a third shift supporting Pacifica and new Charger production.
Brampton’s retooling has been on hold since early this year, extending an idleness that began in 2023.
Retrenchment
The announcement this week from Stellantis of a US$13-billion, four-year investment in plants in Illinois, Ohio, Michigan and Indiana represents the single-largest in the company’s history, chief executive Antonio Filosa said in a news release. It made clear to call out its “already significant U.S. footprint,” in case Donald Trump was reading.
“As we begin our next 100 years, we are putting the customer at the center of our strategy, expanding our vehicle offerings and giving them the freedom to choose the products they want and love.”
The shift of Compass production to the U.S., which came to light after an inquiry from The Globe, unravels much of the Canadian vision shared by Stellantis and Ontario, and is part of a broader realignment across the auto sector as manufacturers consolidate production inside the U.S. tariff wall.
GM is deploying US$4-billion to move models from Canada and Mexico to U.S. plants, Nissan has paused U.S. production of vehicles bound for Canada, and Honda has reportedly explored similar relocations to satisfy new trade incentives.
Stellantis has not indicated any change to its Windsor output, including the Chrysler Pacifica and new Dodge Charger models. The company said yesterday that “Canada remains an important part of its operations.”
That assurance might be met with some skepticism from autoworkers who remember the 2023 press conference, where Stewart said he’d ”given a reassurance in writing to the province, to the feds as well, that we absolutely are committed on the agreements we have with Brampton.”
Those agreements are now at the centre of the federal government’s threat yesterday to sue Stellantis. In a letter to the company’s chief executive, Industry Minister Mélanie Joly said the production shift breaches binding commitments Stellantis made to maintain operations in Canada in return for government support.
“Should Stellantis choose not to respect its obligations, we will act in the interests of all Canadians and hold the company to full account, and exercise all options, including legal.”
Revolt
The warning underscored how Canada’s political outreach to Washington has struggled to gain traction. About a week after Prime Minister Mark Carney met with Trump, Canada’s top trade officials returned to Washington for talks on autos, steel, aluminum and lumber. While discussions have been described as productive, the U.S. has introduced new taxes on Canadian imports. And Stellantis’s move illustrates how American manufacturers are adjusting investment patterns that may prove irreversible, even with a new deal.
Carney said yesterday the Stellantis announcement was “a direct consequence” of U.S. tariffs and the uncertainty surrounding the coming review of the United States–Mexico-Canada Agreement, and that decisions on auto-sector investments will continue to be affected “until a more certain trade environment for the North American sector is established.”
That urgency is compounded by a growing discord among premiers, whose approval ratings have slipped as economic strain deepens across their provinces. In January, the provinces issued a joint statement pledging unity in the face of a trade war. In recent days, Ontario Premier Doug Ford has pressed harder for countertariffs, David Eby for softwood relief, and prairie leaders to abandon levies on China-made electric vehicles – all options that risk political strain at home while complicating Canada’s broader effort to negotiate a coherent trade approach with Washington.
Charted
Shifting views on immigration
Support for immigration in Canada has cratered. Last year was the first time that a majority of Canadians believed there were too many incoming immigrants, according to data from Immigration, Refugees and Citizenship Canada. That’s a problem, Kevin Yin writes.
Bookmarked
On our reading list
On the block: Hudson’s Bay will auction off thousands of art pieces and artifacts. Here’s how you can get a piece of the history.
On the line: How Canada Post workers can still win, even without the public’s backing
First person: A soul-searching snowbird wonders about driving her RV down south this winter.
Morning update
Global markets were higher after a robust start to Wall Street’s earnings season helped offset simmering U.S.-China trade tensions.
Wall Street futures were in positive territory, while TSX futures followed sentiment higher after a fresh record close yesterday.
Overseas, the pan-European STOXX 600 was up 0.43 per cent in morning trading. Britain’s FTSE 100 edged down 0.05 per cent, Germany’s DAX advanced 0.1 per cent and France’s CAC 40 rose 0.78 per cent.
In Asia, Japan’s Nikkei closed 1.27 per cent higher, while Hong Kong’s Hang Seng slipped 0.08 per cent.
The Canadian dollar traded at 71.22 U.S. cents.