Canada Seeks to Claw Back GM Funding After Ontario Job Cuts

Melanie Joly Photo by Graham Hughes /Photographer: Graham Hughes/Bloo

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(Bloomberg) — Industry Minister Melanie Joly said the Canadian government will seek to recover money from General Motors Co. after the company’s decision to lay off 500 workers at a truck plant in Oshawa, Ontario.

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It’s the second time in less than six months GM has cut jobs at a Canadian assembly plant, following its October decision to end BrightDrop electric van production in Ingersoll, Ontario. 

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“I had a meeting yesterday with people from GM and I told them that we would be getting our money back,” Joly said on Canadian Broadcasting Corp. on Friday. “If GM doesn’t want to continue to invest more in Canada, we will invest more in other players. We’ll fight for these workers and we’ll find them jobs.” 

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Joly said the government is still determining the amount it wants to claw back, but it’s in the “millions” and is tied to both the Oshawa and Ingersoll plants. GM builds Chevrolet Silverado pickup trucks in Oshawa, partly for export to the US. 

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In 2022, the federal and Ontario governments announced they would each invest as much as C$259 million ($192 million) to upgrade the two factories — funding Ontario Premier Doug Ford said at the time would secure 2,600 jobs.

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“We want justice for Canadian taxpayers, who have no time for those who don’t believe in us,” Joly said.

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GM did not immediately respond to a request for comment. It confirmed in a statement Thursday that it’s moving ahead with previously announced plans to move Oshawa to two shifts from three on Feb. 2, resulting in about 500 layoffs. 

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The company said preparations continue for production of its next generation of gas-powered full-size pickups at the plant, supported by a C$280 million investment.

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Joly contrasted GM’s pullback with Toyota Motor Corp.’s recent launch of production of a new version of its best-selling RAV4 compact SUV in Ontario and noted Honda Motor Co.’s pause on its Canadian EV supply chain plans hasn’t led that company to reduce its workforce.

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Canada is aggressively courting new automakers, including Hyundai Motor Co., Volkswagen AG, and Chinese companies, she said.  

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Auto investment has been tied to the competition for a multi-billion-dollar submarine contract, with Germany’s Thyssenkrupp Marine Systems and South Korea’s Hanwha Ocean Co. the leading contenders. Canada and Korea recently signed an agreement to explore bringing Korean auto manufacturing to Canada.

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Prime Minister Mark Carney also inked a deal with President Xi Jinping that allows 49,000 Chinese electric vehicles into Canada per year at a lower tariff rate. Canada is also looking to attract Chinese investment in the auto sector, with some conditions.

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US President Donald Trump’s tariffs on foreign cars have upended the integrated North American auto supply chain, dealing a significant blow to Canada’s sector. 

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Stellantis NV canceled plans in October to build the Jeep Compass in Ontario, leaving thousands of workers off the job. Joly said in December the government was formally serving Stellantis with a notice of default on its taxpayer-backed financial aid. 

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—With assistance from Mathieu Dion.

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