Canada seeks to recover GM incentives after Oshawa layoffs

Industry Minister Melanie Joly says Ottawa will recover millions in taxpayer funding following GM’s decision to cut a shift at its Ontario truck plant.

On the Dash:

• Canada plans to claw back millions in incentives after GM confirmed 500 layoffs at its Oshawa plant.
• The cuts deepen pressure on Canada’s auto sector amid trade tensions and shifting production strategies.
• Ottawa says future auto investment will favor companies that maintain jobs and honor public funding commitments.

Canada will seek to recover millions of dollars in taxpayer funding from General Motors after the automaker confirmed it will lay off about 500 workers at its Oshawa, Ontario, assembly plant, Industry Minister Melanie Joly said Friday.

The layoffs will occur when GM returns the Oshawa facility to a two-shift operation beginning Feb. 2, ending a temporary third shift that had been added to meet strong post-pandemic demand for pickup trucks. Currently, Oshawa builds Chevrolet Silverado pickups, including vehicles exported to the United States.

Sign up for CBT News’ daily newsletter and get the latest industry stories delivered straight to your inbox. 

Joly said Ottawa has already informed GM that it intends to reclaim incentive funding tied to employment and investment commitments at the Oshawa plant and GM’s Ingersoll, Ontario, facility. She said the amount under review totals “millions” of dollars.

“I told them that we would be getting our money back,” Joly said in an interview with Canadian Broadcasting Corp., adding that Canada would prioritize investments with companies committed to maintaining domestic jobs.

However, GM said it continues preparations to produce next-generation gas-powered full-size pickups at Oshawa, supported by a previously announced C$280 million investment. The automaker said the change in production levels is unrelated to U.S. tariffs or Canada’s policy allowing limited imports of Chinese-made electric vehicles.

The Oshawa announcement marks the second major reduction at a Canadian GM plant in less than six months. In October, the automaker said it would end production of its BrightDrop electric delivery vans at the Ingersoll facility, citing slower-than-expected growth in the commercial EV market.

In 2022, the federal and Ontario governments each pledged up to C$259 million to support upgrades at the Oshawa and Ingersoll plants, funding officials said would help secure roughly 2,600 jobs. Joly said the government is reviewing how those commitments align with current employment levels.

Auto workers union Unifor said up to 1,200 workers across the broader supply chain could be affected. The union accused GM of shifting production to the U.S. after Washington imposed tariffs on Canadian-built vehicles, an assertion the company denies.

Canada’s auto sector has faced growing strain from trade uncertainty and delayed investments. Stellantis last year canceled plans to build the Jeep Compass in Ontario, prompting Ottawa to issue a notice of default on government-backed aid. Joly said Canada remains focused on attracting new automakers while holding existing manufacturers accountable for public funding.