Canada’s federal Conservatives are urging the Liberal government to reduce taxes withheld on severance packages for laid-off General Motors workers in Ingersoll, Ont.
Conservative Leader Pierre Poilievre wrote to Finance Minister François-Philippe Champagne on Sunday, calling for relief from withholding taxes applied to lump-sum severance payments. The letter was co-signed by labour critic Kyle Seeback and local Conservative MP Arpan Khanna.
The Conservatives argue the current withholding rules could leave workers short by “tens of thousands of dollars” at the very moment they lose their regular paycheques.
Conservatives push for tax relief on severance pay
In a draft of the letter obtained by The Canadian Press, the party says waiting for a refund after filing taxes is not a practical answer for newly laid-off workers dealing with immediate costs.
They point to everyday expenses like mortgages and groceries. They also frame the withholding as an unnecessary financial hit for employees who are already facing sudden job loss.
The letter asks Champagne to use existing authority to reduce the amount of tax withheld on severance payments tied to the GM CAMI layoffs.
Layoffs at GM CAMI in Ingersoll
GM announced last year it would end BrightDrop electric-vehicle production at the CAMI Assembly plant in Ingersoll.
The company cited weaker-than-expected market demand and a challenging regulatory environment in the United States. More than 1,000 employees have been laid off.
Oshawa cuts add pressure across the supply chain
GM’s Oshawa Assembly plant is also set to shutter one of its three shifts.
That move will lay off about 500 employees. It is expected to affect up to 1,000 workers across the supply chain, according to the report.
Unifor blames U.S. policy shift and tariffs
Unifor, the union representing GM employees, has pointed to U.S. President Donald Trump’s policies as a major disruption to Ontario’s auto sector.
The union says new tariffs and changes affecting the U.S. EV industry have hit the Ingersoll operation on multiple fronts.
Carney’s auto strategy draws Conservative criticism
The letter comes days after Prime Minister Mark Carney unveiled a new automotive industrial strategy.
Carney said the strategy would drive investment and set a “sovereign path” to reduce auto emissions. It would remove the EV sales mandate, tighten auto-emissions standards, and re-introduce the EV rebate program.
The Conservatives dismissed the strategy as unhelpful to workers facing layoffs now. They argue the policy does not address immediate job insecurity in the sector, and they criticize the rebate plan as potentially supporting American-made EVs.
Trade talks and tariff uncertainty still looming
The Conservatives also press the government on trade, saying Canadians are still waiting for the deal with the United States the government promised by July 21, 2025.
Canada is expected to enter talks this year on renewing the Canada-United States-Mexico Agreement, as the pact comes up for review.
Carney has said his objective remains removing tariffs, while also warning Canada must prepare for multiple outcomes. For Conservatives, the severance withholding issue is a test of whether Ottawa will deliver quick relief to workers caught in the fallout.
