Industry and Technology Committee on Nov. 3rd, 2025

[Raquel Dancho, Conservative, Kildonan—St. Paul, MB]

Right, and in the other SIF agreement with the NextStar facility, the job commitments were released. It stands to reason, as I mentioned earlier.... Why wouldn't they release these ones as well? It's not commercially sensitive.

Are you asking them to release the job numbers?

[Philip Jennings]

Yes, we are in discussions already with Stellantis about releasing as much of the contract as possible.

[Raquel Dancho, Conservative, Kildonan—St. Paul, MB]

Okay. Yes, you mentioned that.

The minister kept saying that these are linked, but now what I'm understanding from what she said at the end, and what you've just confirmed, is that the letter for the resolution process is specifically about the Brampton SIF agreement. Is it reasonable, then, to say that it's really just the Brampton-Windsor retooling SIF agreement funding that is at risk, and not the NextStar plant funding? Is that a fair assessment? Do you see what I'm asking?

[Philip Jennings]

Yes.

[Raquel Dancho, Conservative, Kildonan—St. Paul, MB]

She's bringing down the hammer, so to speak—or she's saying she is—to enforce a resolution mechanism that they follow through on their commitment for the Brampton retooling SIF agreement, but in other testimony today, she linked all of the agreements, sort of alluding to that, and in her letter publicly she mentioned it as well. She said, “In particular, the legally binding commitments that Stellantis made by accepting support through both the Strategic Innovation Fund and...the Special Contribution Agreement with NextStar Energy”.

What I'm trying to really get at is that she's saying that we're looking at all of the money we're giving you with all of these three commitments and it's all on the line if you don't follow through and get these 3,000 jobs. That's what she's telling the public, but then what I'm putting together here is that this is not really the case. This is what I'm asking you to correct for me.

These Brampton SIF agreements, that's really the only funding she's looking at. Is that what I'm understanding?

[Philip Jennings]

I'm sorry that I sound evasive when I'm saying this, but what I can say is that there are some commercial confidential clauses in the various agreements that I'm not at liberty to share the details of today.

[Raquel Dancho, Conservative, Kildonan—St. Paul, MB]

Understood, but you have this agreement on you here. You have this one for NextStar.

Under section 14.1(g), it says, “the Recipient has not met or satisfied a term or condition under any other contribution Agreement or agreement of any kind with Her Majesty”, and that's the only clause in this entire multi-billion dollar contract—up to—with the NextStar plant that would possibly link this funding being contingent on another agreement. Is that correct?

[Philip Jennings]

In terms of this, was it in the public domain?

[Raquel Dancho, Conservative, Kildonan—St. Paul, MB]

Yes.

[Philip Jennings]

That is the clause that makes the link, but I just want to make sure it's clear. I don't want to mislead the committee in any way. There are other agreements that I'm not at liberty to share.

[Raquel Dancho, Conservative, Kildonan—St. Paul, MB]

Okay. Thank you.

[The Chair, Liberal, Ben Carr]

Thank you very much, Ms. Dancho.

Ms. O'Rourke, you have five minutes.

[Dominique O'Rourke, Liberal, Guelph, ON]

Just for clarification, are we talking about tax incentives rather than subsidies or funds disbursed?

[Philip Jennings]

The term we use is “production incentives”. As I mentioned before, at the time when these were negotiated, the investment climate was very generous in the U.S. in terms of trying to attract these kinds of investments, and for good reasons at the time.

We still believe it to be the case that the future of the vehicle is electrification. At the time, the decision was really made to try to match what the U.S. actions were and what we call production subsidies or production incentives. At the end of the day, the government commits itself to giving a certain amount of money per kilowatt hour of production in those plants, matching what was offered under the Inflation Reduction Act in the United States.

It's based on production. If nothing ultimately gets produced, there's no money that goes out the door from the federal government. As production goes up, then it goes out. There are often maximum amounts that can be provided. As I said, we have an agreement with Ontario to cover one-third of those production incentives.

[Dominique O'Rourke, Liberal, Guelph, ON]

Thanks.

We were also studying productivity and how we need to be competitive with the States. This was sort of levelling the playing field for domestic automakers. Would that be correct?

[Philip Jennings]

That's correct.

We already are a very important player in terms of the automotive sector. We really want to make sure that we maintain that importance and relevance, so at the end of the day, if automaking is becoming electric over the long term, we want to make sure that Canada and its workers play a part in that.

[Dominique O'Rourke, Liberal, Guelph, ON]

In my next question, really quickly, I want to confirm that I heard you right. I heard you say that the amount in question is $42 million—not $15 billion but $42 million—and that there are job targets. Is that correct?

[Philip Jennings]

That's correct, yes.

[Dominique O'Rourke, Liberal, Guelph, ON]

Okay. We're talking about a completely different scope here. It's still important. What's important at the end the day is to hold Stellantis accountable, but what's also important is to have the right facts.

I have a quick question. Usually in a contractual relationship—we see it in the NextStar contract that we have—any material change has to be shared. U.S. tariffs would be a material change. Did Stellantis share that material change with the minister or ministry? Did it take steps at any time to mitigate, or was the government completely blindsided by Stellantis's decision?

[Philip Jennings]

The honest answer is that we were informed of this decision just prior to its being announced publicly. Also, to be fair, the retooling of the Brampton plant had been on pause since February earlier this year. As a department, we had many interactions with Stellantis in trying to understand when that would change. There was certainly speculation that there could be an issue, but we were never informed directly by the company until the day the announcement was made.

[Dominique O'Rourke, Liberal, Guelph, ON]

Contractually, that's their obligation, to keep the ministry involved in any material changes and to bring forward suggestions on mitigation.

I'm looking at section 6.4 on “Guarantee”. I don't know what's in the contract, which we haven't seen yet. The language we have in that particular NextStar agreement says that “the Guarantors guarantee the complete performance and fulfillment of every obligation of the Recipient under this Agreement, including without limitation”.

Did Stellantis fail to fulfill every obligation in its contract?

[Philip Jennings]

What I can confirm is that we are in very active discussions, which include the minister, Unifor and the Ontario government, with Stellantis at this moment, given the confirmation that the Jeep Compass mandate that had been planned for Brampton is no longer going to be in Brampton.

At the end of the day, the breach occurs if the jobs don't return to Brampton and there's no mandate in Brampton. We're trying to understand the company's plans, and if there are plans to return the mandate, when that would take place. As the minister stated....

Again, I have not seen the final letter she sent, but she's given them 30 days to respond to her request to get some clarification on this mandate question for Brampton.

[Dominique O'Rourke, Liberal, Guelph, ON]

Great.

In the same vein, section 6.6, which is the “Amendment” section of the NextStar plant agreement, says, “The Recipient shall provide written notice to the Minister of any changes which may have an impact on [the] Statement of Work or on the Benefits Commitments”. It also says:

In the event that supply chain shortages, trade levies, materially adverse market conditions...have a material impact on the Project, the completion schedule of the Project or the timeline...the Minister agrees to engage in discussions...to consider options...if deemed appropriate [to amend].

Did Stellantis ever provide written notice of the material impacts on its ability to meet its obligations? Did they request an amendment, or is that what we're looking at in the next 30 days?

[The Chair, Liberal, Ben Carr]

Answer very briefly, please, Deputy Minister.

[Philip Jennings]

I'm not aware of a written statement. I can look, but I'm not aware of it.

As I said, the first I was aware of Brampton being confirmed at risk was when they notified us the day of.