Another jolt to Canada’s electric vehicle sector.
The Japanese car maker, Honda, is suspending plans to build an EV plant north of Toronto, according to multiple news reports from the Japanese media.
The auto manufacturer paused development of the $15 billion project a year ago saying it would review the EV market, but lower demand in the U.S. for EVs has led Honda to now halt its plans.
Asked about the media reports, Honda Canada said it had nothing to report at this time.
The announcement for the project two years ago was a significant deal for the auto industry in Canada — a $15 billion vehicle assembly plant and battery production facilities with $5 billion coming from the Ontario and federal governments.
This latest move appears to have caught Canadian lawmakers by surprise. Prime minister Mark Carney acknowledged the EV industry is facing headwinds.
"There are challenges with the US tariffs, unjustified tariffs in the auto sector," he said. "We’ll continue to work with companies in the sector, helping them reposition, reinvest, supporting workers there. We’ll continue to do what’s necessary, including getting the right deal in Canada’s interest."
But that wasn’t enough for the opposition. Conservative leader Pierre Poilievre laid the blame squarely at Carney’s government.
"This follows on the collapse of auto production under this Liberal government," he said. "It’s fallen by 50 percent since the Liberals took office. Most of that collapse happened before the tariffs even took place, but under the leadership of then-industry minister Francois Philippe Champagne, what we’re seeing from Mark Carney is not a plan but an illusion."
Poilievre’s trade critic and Member of Parliament Adam Chambers also weighed in, saying it’s not enough to say that demand for EVs is down.
"When the government put subsidies in the window for Canadian manufacturers to build electric vehicles, that actually caused some to move some of the traditional manufacturing outside of Canada and into the U.S. because they were going to make room for their electric vehicle manufacturing lines," Chambers said.
Ontario’s Minister of Economic Development, Vic Fedeli, tried to put a less-than-negative spin on events. He said Honda would get no public money unless it went ahead with the project, adding that Honda provided assurances to Canada and to Ontario.
"There’s very tight guardrails," he said. "They tell us they’re here to stay and still there are a lot of changes in the auto sector. We’ve seen it. You’ve got Trump tariffs, you’ve got all of the other uncertainty. So we understand the pause these companies are taking."
But at the provincial level, lawmakers like New Democrat leader Marit Stiles say, no matter what, the communities where these auto plants were to go, will suffer.
"I know that the people in those communities are very concerned because they were also hoping for that," Stiles said. "Their hopes were very high. This was going to mean jobs and opportunities and, of course, spinoff jobs in those communities. Instead what are we seeing, these are going belly up and we’re seeing other jobs not happening — jobs disappearing."
The auto industry in North America is facing challenges. Canada's Minister of Industry, Mélanie Joly, said American tariffs and American policies are creating headaches for automakers to scale back or delay investment in the EV sector. But recent spikes in the price of gasoline, expected to continue for, perhaps, the rest of the year due to the conflict with Iran, could be the catalyst to give the EV market a shove forward.
