The federal and provincial governments will invest more than $130 million each in an Ontario Honda plant to help it pivot to produce hybrid-electric vehicles.
Prime Minister Justin Trudeau and Ontario Premier Doug Ford announced the news Wednesday.
The Honda of Canada Mfg plant in Alliston, Ont. was built in 1986 and is the country’s second largest car manufacturer. It produces the Honda Civic and the CR-V, with the capacity to complete more than 400,000 vehicles per year and 190,000 engines.
The plant currently produces gas cars and engines and is the largest employer in the Simcoe region. It hosts around 4,200 manufacturing jobs.
“Our government has a plan to build the future of auto manufacturing right here in Ontario,” Ford said. “We are so pleased that Honda has made this investment in Ontario and know that the cars of the future will be built here in Alliston and all across Ontario for decades to come.”
Honda Canada will spent around $1.4 billion to upgrade and retool the plant, including a grant of $131.6 million from the provincial government. The federal government has agreed to match Ontario’s contribution for a total government investment worth upwards of $263 million.
The 2023 CR-V and CR-V Hybrid will be built at the retooled Alliston plant.
Jean Marc Leclerc, president and CEO of Honda Canada, said the announcement was “an important milestone” in the company’s bid to transition to electric vehicles.
Globally, the auto giant plans to sell only zero-emissions vehicles in North America by 2040. It will retool its plants incrementally across the next 20 years.
Confirmation of Honda Canada’s investment to transition to producing hybrid vehicles comes as gas prices across Ontario soar. The average price in Ontario is $1.73 per litre, according to the Canadian Automobile Association. It cost $1.24 at the same time last year.
“By helping Canadians build – and then drive – cleaner vehicles, we’re delivering on our plan to build a better future for all,” Trudeau said.
More than 65,000 new battery-only and plug-in hybrid electric cars were registered in Canada during the first nine months of 2021, up from 54,353 in all of 2020 and 56,165 in 2019, according to Statistics Canada.
The figures represent five per cent of new cars registered, compared with three per cent in both 2020 and 2019.