Honda to Receive $220 Million in Canadian Government Support for Plant Retooling
By Robb M. Stewart
The Canadian government will help fund Honda's planned retooling of a plant in southern Ontario to expand the production of hybrid-electric vehicles in an effort to help secure jobs and support an auto industry that is still under pressure from U.S. tariffs.
The federal government said Friday it will invest 313 million Canadian dollars, the equivalent of about US$220 million, in the Alliston facility through its Strategic Response Fund.
Ontario's government will provide a further C$156 million to Honda's C$867 million development plans.
The carmaker on Monday disclosed plans for C$166 million capital investment in upgrades and retooling at the Alliston site to support the production of next-generation hybrid and gasoline-powered models, including the reintroduction of engine manufacturing. The work will maintain a workforce of more than 4,000 and support its Canadian auto production volumes, Honda said.
Federal Industry Minister Melanie Joly said the project will ensure production in Canada of the latest Honda Civic and CR-V models, increase electrified vehicle production and modernize manufacturing technologies.
It comes as the auto industry in Canada continued to feel pressure from hefty tariffs imposed last year by the Trump administration on foreign vehicles. In an effort to support the industry and a government electrification push, Ottawa this week exempted more fully-electric and hydrogen-power vehicles from a luxury tax, raising the threshold to vehicles priced at up to C$150,000 from C$100,000.
At the same time, Ottawa is looking to reclaim what it says is hundreds of millions of dollars extended to Stellantis to retool an Ontario plant for the next-generation Jeep Compass. Stellantis has shifted the production site for the new Compass to a factory in Illinois, and has agreed to a deal to sell the manufacturing plant located in the Toronto area. The company has also said it will voluntarily return C$24 million of federal government support to upgrade the idled plant.
Write to Robb M. Stewart at robb.stewart@wsj.com
(END) Dow Jones Newswires
November 13, 2026 12:30 ET (17:30 GMT)
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