The high-stakes gamble to secure EV battery production in Canada has delivered an equally high-stakes drama. Confidential government agreements, valued at billions in taxpayer dollars to fund the NextStar Energy plant, a joint venture between Stellantis and LG Energy Solution in Windsor, Ontario, are now under intense scrutiny.
Copies of the contracts reveal dozens of conditions that, if violated, grant federal officials the power to terminate the deals and even impose clawbacks. This seems the government’s insurance policy against getting fleeced, but the exact terms remain a mystery due to heavy redaction.
The urgency stems from Stellantis’s announcement that it is shifting production of a Jeep model from its Brampton, Ontario, facility to Illinois, even while injecting $13 billion into its U.S. operations. Despite the automaker’s vague assurances of “plans for Brampton,” the move has fueled fears that the plant’s approximately 3,000 workers face permanent job losses.
Federal officials have since insisted that the NextStar contracts, a $500 million Strategic Innovation Fund (SIF) agreement from 2022 and a staggering $15 billion production subsidy deal from 2023, include job protections.
Industry Minister Mélanie Joly recently upped the ante, suggesting that the subsidy deal explicitly conditioned the funds on Stellantis maintaining its “full Canadian presence, including Brampton”. Joly warned in a letter to the CEO that any failure to honor this commitment would become a breach of the “legally binding” agreement, opening the door for legal action.
Yet, copies of the agreements obtained through access-to-information requests tell a more ambiguous story. While the initial 2022 deal requires NextStar to employ 2,500 full-time staff and maintain that number, the later, more costly subsidy agreement uses less restrictive language, only stating that NextStar “intends to use commercially reasonable efforts” to meet that job creation goal. Crucially, in the uncensored text, there is absolutely no explicit mention of Brampton. This leaves Canadian taxpayers wondering: did the government actually secure the Brampton commitment they claimed?
