Dodge Chargers are parked at a finished vehicle storage facility used by Stellantis in Windsor, Ont., in Oct., 2025.Dax Melmer/The Globe and Mail
On Wednesday, laid-off employees at the Stellantis plant in Brampton, Ont., received a robocall delivering bad news: they had no jobs to go back to.
It was another stall on the road for Canada’s automotive strategy, which has seen federal and provincial governments dole out mounds of cash and add regulations and protective tariffs in a floundering attempt to create more jobs and build a state-of-the-art electric vehicle industry.
Stellantis workers weren’t alone in being caught off guard that their jobs were moving to the U.S. Ottawa and Ontario were also surprised. The governments had boasted about funding Stellantis’s plant upgrades, and the company had promised to produce “the electric vehicles of the future” at the Brampton factory once it finished retooling for both gas and electric Jeep Compass vehicles.
The federal and provincial governments had also committed up to $15-billion in funding, in part contingent on production, for Stellantis’s NextStar EV battery plant, a partnership with LG Energy Solutions in Windsor, Ont. Industry Minister Mélanie Joly says the agreement with Stellantis requires the company to maintain its existing Canadian footprint.
The federal government is now threatening to sue Stellantis. The auto manufacturer says it is looking into producing a different model in Brampton, but it has given few details.
Gary Mason: The electric vehicle industry in Canada is losing power. It’s time to recharge it.
Opinion: Canada’s electric vehicle strategy has failed, and there are lessons to learn
Donald Trump’s automotive tariffs and his cuts to EV subsidies have created massive disruption within the sector. But the truth is, Canada’s EV strategy never made much sense.
The idea of building EVs here using Canadian minerals, creating high quality jobs and reducing emissions was appealing. Unfortunately, it was a fantasy. The attempt to create the illusion of a growing industry has required constant consumer and business subsidies, barriers to selling gas-powered vehicles, and tariffs to keep out cheap Chinese competition.
Like a multivehicle collision, the failures in Canada’s EV industry are piling up. Ottawa and Quebec pledged $2.7-billion to Swedish EV battery manufacturer Northvolt before it went bankrupt. Quebec has said its portion of the investment has been “lost.”
Last week also brought news that the planned expansion of Ultium CAM, a plant in Bécancour, Que., that produces materials for EV batteries, wouldn’t move forward. As a result, plans from Vale SA to create a nearby nickel sulphate plant were scrapped. Ottawa and Quebec had promised $300-million to support the first phase of Ultium CAM, a joint project of General Motors and South Korea’s POSCO Future M.
Even if everything in Canada’s EV strategy had gone according to plan, it was a costly bet. In 2022, the Parliamentary Budget Officer said that the $28.2-billion in federal and Ontario government subsidies for two electric vehicle battery plants would take 20 years to break even, rather than the five years the Liberal government had suggested.
These projects in most cases leave the intellectual property and the most valuable technical knowledge in foreign hands. Lower level jobs aren’t guaranteed to Canadians either. At NextStar, union leaders reported that workers from South Korea, including electrical installers and forklift drivers, were brought in to set up the plant.
Consumers only seem interested in buying EVs when they can get heavy subsidies. With EVs only making up around eight per cent of new sales, Prime Minister Mark Carney was forced to suspend this year’s minimum sales requirement for electric vehicles. The entire policy is under review.
Instead of doubling down on former prime minister Justin Trudeau’s dubious industrial strategy, Mr. Carney and the premiers should focus on creating a more hospitable business environment.
Canada can lead EV supply chain despite trade war and murky policies, industry players say
Businesses in Canada face a heavy regulatory burden, and protectionist barriers dampen competition, stifling innovation and driving up consumer costs. Restructuring the economy so companies aren’t relying on handouts and are instead forced to innovate and become more efficient is better for the economy, and cheaper for taxpayers.
If the goal is to reduce carbon emissions, the federal government can repeal the ban on Chinese EVs, which would be more widely adopted as they sell for as little as $14,000.
Mr. Carney recently spoke to business leaders about the importance of having a competitive corporate tax system. He has an opportunity to act in the upcoming federal budget. It would make more sense than throwing even more money at Canada’s stalled EV strategy.