It’s no secret Canada has been doing its best to try and bring jobs to its citizens with the Canadian government giving millions in incentives to both GM and Stellantis over the years.

But with both firms recently announcing job cuts and the end of production for some models in the country, Canadian officials are now crying foul and now want both companies to pay back the money they got for allegedly going back on their collective words.

Talks have been ongoing

Talks between Stellantis and Canadian officials have been ongoing since November with the bulk of the discussions focusing on when and how the automaker will repay the CA$1 billion in public funds the company got to retool its Brampton assembly plant to help keep jobs in the country. The plant made the Jeep Compass but Stellantis announced last year that it would be moving Compass production out of Brampton and into a plant in Illinois despite receiving the money prior.

As expected, the Canadian government was not pleased with the news and have since sought ways to make Stellantis pay for the snap decision. Industry Minister Melanie Joly stated “A lot of our support was linked to production, and therefore if there was no production, obviously there was no funding,” she said during a recent cabinet meeting.

GM in the crosshairs

In addition to Stellantis, GM has also drawn the ire of officials with the company recently scaling back operations in the country. This included axing the slow selling EV600 EV delivery van and eliminating the third shift at its Oshawa assembly plant. Joly also pulled no punches when addressing GM’s alleged backtracking and said the Canada will attempt to recover a large chunk of the CA$260 million in incentives given to GM to help keep operations at Oshawa and other facilities going.

The axing of the vehicle once known as the Brightdrop was attributed to low demand and sluggish sales which did little to recoup the high production costs the van had. The Brightdrop was also sacrificed as part of a broader pivot back to gasoline vehicles after the company’s initial all-in gambit on EVs and electrification produced less than expected results.

What’s next for Canada?

While Canada has expressed strong interest in recovering the money from both companies and is certainly confident in its approach, the art of actually recovering the funds may be alot harder than they expect.

According to Toronto lawyer Mark Warner who was interviewed by the Wall Street Journal, their efforts could be blunted by not only the structure of the loans but also other legal aspects that were baked into the original agreements themselves. “Recovering funds from the companies can be seen as an aggressive response with an air of finality that governments traditionally want to avoid in order to preserve a chance for continuing investment,” he told the newspaper.

But while it remains to be seen if Ottawa’s potential trip through the legal system will garner any results, Canadian officials are still playing the long game. The country is attempting to convince Hyundai and Volkswagen to move production to Canada and a recently signed trade deal with China could give Chinese automakers the right incentive to build their vehicles in North America and finally give them access to Canadian car buyers too.