Conservatives call for tax relief for GM worker severance packages

The Opposition Conservatives are calling on the federal Liberal government to reduce taxes on severance packages for laid-off General Motors workers in Ingersoll, Ont.

Conservative Leader Pierre Poilievre penned a letter Sunday, co-signed by labour critic Kyle Seeback and local MP Arpan Khanna, addressed to Finance Minister François-Philippe Champagne calling for an exemption to the withholding taxes that ding severance pay.

In a draft version of the letter seen by The Canadian Press, the Conservatives argue taxes on a big chunk of GM’s lump-sum severance payments could deprive out-of-work employees of “tens of thousands of dollars,” adding “insult to injury.”

The federal Tories said waiting until after tax season to recover funds is not a reasonable solution for workers who recently lost their regular paycheques and still need money for their mortgages and grocery bills.

"These men and women worked hard, played by the rules and built things this country depends on. The least your government can do is stop taking their money at the worst possible moment," the letter said.

"That is why I am asking you to use your existing authority to reduce the amount of tax withheld on these payments for workers affected by the GM CAMI layoffs."

The letter comes just ahead of the start of tax-filing season and days after Carney unveiled his new strategy for the automotive sector.

GM announced last year it would end its BrightDrop electric-vehicle production at the CAMI Assembly plant in Ingersoll, citing weaker-than-expected market demand and a challenging regulatory environment in the U.S. 

More than a thousand employees have been laid off.

Meanwhile, GM’s Oshawa Assembly is shuttering one of three shifts, laying off some 500 employees in a move expected to affect upward of a thousand workers across the supply chain.

Unifor, the union representing the GM employees, has accused U.S. President Donald Trump of upending Ontario’s auto sector and hitting the Ingersoll GM plant on multiple fronts. Trump introduced 25 per cent tariffs on non-U.S. auto content and policies that upended the U.S. EV industry.

Prime Minister Mark Carney announced a new automotive industrial strategy last Thursday, which he vowed would “drive investment” in the sector and set a “sovereign path” to reduce auto emissions.

The strategy would remove the EV sales mandate in exchange for stricter auto-emissions standards and re-introduce the EV rebate program.

It comes on the heels of a deal the prime minister made in Beijing, granting a set quota of Chinese EVs into the country at a minimal tariff rate. Carney has also said Ottawa has been in talks with Korean and Chinese investors interested in Canada’s auto sector.

The Conservatives dismissed Carney’s new auto strategy in their letter for being unhelpful to auto-sector workers who have been left reeling as their industry buckles.

“Canadians are still waiting for your government to deliver the trade deal with the United States you promised by July 21 (2025) and a clear plan to protect Canadian jobs,” the Conservative MPs wrote.

“Instead of presenting a serious plan to defend our auto workers, you've just announced a rebate that will subsidize American-made EVs.”

Canada is entering into talks this year over renewing the Canada-United States-Mexico Agreement, as the free-trade pact comes up for review among the signatories.

Carney said Thursday his objective remains getting all tariffs removed, but that is clearly not Trump’s objective, so Canada must “prepare for all possibilities.”

Picture Courtesy: THE CANADIAN PRESS/Patrick Doyle