Electric spark

Honda deal worth $15B to produce 240,000 EVs a year in Ontario

This article was written by Robert Benzie and Rob Ferguson, and was published in the Toronto Star on April 26, 2024.

Premier Doug Ford and Prime Minister Justin Trudeau announced Thursday that Honda will build four new factories in Ontario that will produce 240,000 electric vehicles annually.

This Honda accord is worth a cool $15 billion.

Prime Minister Justin Trudeau and Premier Doug Ford announced Thursday that Honda will build four new factories in Ontario, producing 240,000 electric vehicles annually as the Japanese auto giant expands its footprint.

Fuelled by $5 billion in public money, the expansion will create 1,000 new jobs at Honda, which already employs 4,200 people in Alliston, plus thousands of spinoff positions in parts production and construction of the new facilities.

Honda, which has been building cars in Ontario since 1986, said the new EV assembly plant will open in 2028 — three years after its North American manufacturing hub in Marysville, Ohio, begins turning out electric vehicles.

The initiative also includes an EV battery factory in Alliston and two supporting plants to be located elsewhere in Ontario that will make battery components in joint ventures with Japanese and Korean companies.

Those locations will be announced later, officials said. Honda spokesperson Ken Chiu said it is “too early” to say which electric models are slated for the new assembly plant.

Ottawa and Queen’s Park will each pony up $2.5 billion — the federal government in investment tax credits and the province in incentives and infrastructure improvements for the company.

Trudeau — who praised Ford as “an outstanding partner” and a “strong leader” as the federal Liberals work closely with the provincial Progressive Conservatives — called it “a game-changer for manufacturing in Canada.”

“Honda’s investment is a vote of confidence in Canada, in Canadian auto workers,” the prime minister said.

“This is the largest auto investment in Canada’s history,” Trudeau added. “Together, we’re creating good-paying jobs, growing our economy, and keeping our air clean.”

Honda said the new electric vehicle assembly plant in Alliston will open in 2028

Ford said the investment is “historic” and “delivers on our government’s promise to bring back manufacturing as part of our plan to rebuild Ontario’s economy.”

“From our abundant critical minerals in the Ring of Fire to our highly skilled workforce, Ontario has what it takes to secure the jobs of the future as the world leader in electric vehicle manufacturing, with better jobs and bigger pay cheques,” the premier said.

Jean Marc Leclerc, president and CEO of Honda Canada, said the company’s move “proudly honours the highly skilled associates who have earned a global reputation for manufacturing excellence and represents Honda’s recognition of the long-term attractiveness of the Canadian electric vehicle manufacturing ecosystem.”

Its investment dwarfs the $5-billion Stellantis EV battery factory in Windsor and the $7-billion Volkswagen EV battery project in St. Thomas, each of which will be receiving billions of dollars in subsidies and tax credits from Ottawa and Queen’s Park.

Auto industry analyst Greig Mordue — who has been critical of heavier taxpayer subsidies for the Stellantis and VW plants in Ontario and a Northvolt EV battery plant in Quebec — said the Honda aid is less draining on the public purse.

With those three multibillion dollar plants getting almost $1 in aid for every $2 invested by the companies, “the $5 billion for Honda for a $15-billion investment looks like a pretty good deal,” said Mordue, assistant professor of advanced manufacturing policy at McMaster University and a former auto executive.

In Ottawa, federal Conservative Leader Pierre Poilievre’s office issued a statement expressing doubt the Honda deal would actually create the 1,000 promised jobs.

But Poilievre’s spokesperson Sebastian Skamski did not respond to a question from the Star asking if a future Conservative government would preserve the Trudeau Liberals’ green economy tax credits, which Ottawa projects will cost $93 billion by 2035.

“We have seen before where Justin Trudeau announces massive subsidies that are supposed to create Canadian jobs, only to see him turn around and let those jobs be filled by foreign replacement workers,” the initial statement said, referring to reports last fall that hundreds of foreign workers were slated to be hired at the Stellantis plant in Windsor.

“We can’t trust that (Trudeau’s) latest announcement of $5 billion in Canadian taxpayer money to another large multinational corporation will be any different.”

At Queen’s Park, NDP Leader Marit Stiles said the provincial Tories could do more to bolster the EV industry by expanding electric charging infrastructure across the province.

“I thought the government made a really bad decision and not requiring those new builds to have EV chargers,” said Stiles, criticizing Ford for previously removing mandatory EV plugs for new homes from the building code.

“That’s, to me, exactly the sort of short-sighted move that’s going to mean that down the road, it’s consumers who continue to pay a higher price and we want to make EVs accessible for everyone,” she said.

There is also lingering alarm over Ford Canada’s announcement three weeks ago that it’s delaying electric vehicle production at its Oakville assembly plant until 2027, two years later than expected.

In 2020, the prime minister and premier each ponied up $295 million in taxpayers’ money to help Ford Canada transition the Oakville plant to EV production.

Despite that setback, both levels of government are committed to an electric future for auto manufacturing in Ontario.

Honda’s auto assembly and EV battery factory expands the complex 107 kilometres north of Toronto that currently makes 400,000 gas-powered Civics and CR-Vs annually.

The premier pointed out the province now boasts six major automakers: Ford, General Motors, Honda, Stellantis (parent company of Chrysler, Jeep and Fiat), Toyota and VW.

“Ontario is the only place in the world that six of the largest automakers call home,” he said.

Provincial Economic Development Minister Vic Fedeli said the overall $28 billion in EV investments that Ontario has attracted in recent years has ballooned to $43 billion after the Honda deal.

Author: Ray Nakano

Ray is a retired, third generation Japanese Canadian born and raised in Hamilton, Ontario. He resides in Toronto where he worked for the Ontario Government for 28 years. Ray was ordained by Thich Nhat Hanh in 2011 and practises in the Plum Village tradition, supporting sanghas in their mindfulness practice. Ray is very concerned about our climate crisis. He has been actively involved with the ClimateFast group (https://climatefast.ca) for the past 5 years. He works to bring awareness of our climate crisis to others and motivate them to take action. He has created the myclimatechange.home.blog website, for tracking climate-related news articles, reports, and organizations. He has created mobilizecanada.ca to focus on what you can do to address the climate crisis. He is always looking for opportunities to reach out to communities, politicians, and governments to communicate about our climate crisis and what we need to do. He says: “Our world is in dire straits. We have to bend the curve on our heat-trapping pollutants in the next few years if we hope to avoid the most serious impacts of human-caused global warming. Doing nothing is not an option. We must do everything we can to create a livable future for our children, our grandchildren, and all future generations.”