Oct 23 (Reuters) - Canada has sharply reduced

tariff-free import quotas for General Motors ( GM ) and

Stellantis ( STLA ), citing their decisions to scale back

manufacturing in the country, the country's Department of

Finance said in a statement on Thursday.

GM's annual remission quota is cut by 24.2%, and Stellantis' ( STLA )

by 50%, following their failure to meet commitments under

Canada's auto remission framework, the statement said.

In April, Canada said it would impose 25% counter-tariffs on

all vehicles imported from the United States that are not

compliant with the U.S.-Mexico-Canada trade deal.

However, the Canadian finance ministry later said that auto

manufacturers will be allowed to import a certain number of

U.S.-assembled, free-trade-compliant vehicles if they continue

to produce cars locally and complete planned investments.

The government statement, issued by Finance and National

Revenue Minister Francois-Philippe Champagne and Industry

Minister Melanie Joly, criticized GM for reducing production at

its Oshawa and Ingersoll facilities in Ontario, and Stellantis ( STLA )

for canceling production plans at its Brampton assembly plant.

"These unacceptable decisions are in contravention of their

legal obligations to Canada and Canadian workers," Champagne

said, emphasizing the government's resolve to protect the auto

sector.

Stellantis ( STLA ) announced plans to move its Jeep Compass

production from Ontario to the U.S., and General Motors ( GM ) ended

BrightDrop van output in Ontario, citing weaker demand.

GM and Stellantis ( STLA ) did not immediately respond to Reuters'

requests for comment.

The policy shift was first reported by CBC News.