Honda Canada indefinitely suspends $15B Alliston, Ont. EV plant, blames U.S. tariffs

Honda Canada has indefinitely suspended its plans for a $15-billion electric vehicle complex in Alliston, Ont., pointing to American auto tariffs as the cause.

While the company is hitting the brakes on expanding, it says the decision does not affect current employment or production levels in the province.

Honda Canada confirmed the rumours today, putting an end to the planned EV complex at its Alliston, Ont. plant. Last May, the automaker had put the expansion on ice, stating it would re-evaluate the electric vehicle market in two years.

“Based on our revised strategic objectives, we have determined that an indefinite suspension of the value chain project is appropriate at this stage,” the company said in a statement. It added it will continue reviewing future procurement and business strategies while carefully monitoring market conditions.

Brendan Sweeney, president and CEO of the Pacific Manufacturing Association of Canada, said the company is reacting to government tariffs south of the border. Those measures placed a 25 per cent tariff on all auto parts not compliant with the Canada-United States-Mexico Agreement.

“Free trade with the United States is and should be the first and foremost priority for the automotive industry in Canada, and for the automotive industry in North America, for that matter,” Sweeney said.

READ MORE: Honda to extend halt indefinitely on $15 billion Canadian EV plant: reports

Prime Minister Mark Carney called the decision “disappointing” today, adding that Canada is prepared to start renegotiating a free trade agreement with the U.S.

“We’re ready to sit down for those negotiations,” Carney said. “There are big opportunities for both of us if we can come to an agreement. It takes the Americans to focus, and I’m sure once they’re finished with their discussions with China, they’ll focus.”

The news comes as the Japanese automaker announced its first-ever annual loss of $3.68 billion, which it attributed to a lack of demand for EVs.

The planned expansion had promised around 1,000 new manufacturing jobs in Alliston by 2028. However, Honda says the announcement will not impact the more than 4,000 workers currently at the Ontario plant or affect current production levels.

“Their 11th million vehicle rolled off the assembly line quite recently,” said Vic Fedeli, Ontario’s minister of economic development, job creation and trade. “They’ve been here 40 years; they told us that they’re here to stay.”

Ottawa and Ontario had each promised $2.5 billion toward the project, but none of that money has been disbursed.

READ MORE: Honda indefinitely suspends Canadian EV plant plan