Canada Cuts Tariff-Free Quotas for GM and Stellantis Over Reduced Local Production

Canada has sharply reduced tariff-free import quotas for General Motors (GM) and Stellantis after both automakers scaled back their domestic production, the Department of Finance announced Thursday. The move underscores the Canadian government’s push to protect local manufacturing and enforce compliance with its auto remission framework.

According to the statement, GM’s annual duty-free import quota will be cut by 24.2%, while Stellantis faces a steeper 50% reduction. The decision follows both companies’ failure to meet commitments tied to maintaining production and investment levels in Canada.

Earlier this year, Canada warned it would impose a 25% counter-tariff on all U.S.-made vehicles that do not meet the requirements of the United States-Mexico-Canada Agreement (USMCA). However, automakers producing vehicles domestically and following through on pledged investments were granted exemptions for a limited number of U.S.-assembled, free-trade-compliant imports.

Finance and National Revenue Minister François-Philippe Champagne and Industry Minister Mélanie Joly criticized GM and Stellantis for neglecting their obligations to Canadian workers and the country’s auto industry. Champagne specifically condemned GM for reducing operations at its Oshawa and Ingersoll plants in Ontario and Stellantis for canceling production at its Brampton facility.

“These unacceptable decisions are in contravention of their legal obligations to Canada and Canadian workers,” Champagne said, reaffirming Ottawa’s commitment to protect its auto sector.

Stellantis recently announced it would shift Jeep Compass production from Ontario to the United States, while GM halted BrightDrop electric van manufacturing in Ontario due to declining demand.

Both automakers have yet to respond publicly to the government’s actions. The policy update was first reported by CBC News and later confirmed by Reuters.