Honda Canada plans to retool its manufacturing facilities in Alliston, Ont., to expand production of hybrid-electric and gasoline-powered vehicles, with government support for a broader $867-million investment commitment.

The automaker announced the plans Monday, including an initial $166-million investment in upgrades that will bring engine manufacturing back to the site, CBC’s Sammy Hudes reported.

The federal government said it will contribute $313 million toward the broader commitment, while Ontario will provide $156 million. Honda said the work will improve manufacturing quality, efficiency and flexibility.

The company said the investment will help maintain its workforce of 4,000 Canadian employees across the two Alliston facilities and support Canadian production volumes as North American demand for hybrids grows.

“This renewed investment reinforces Canada's critical role in Honda's North American growth and hybrid-electric vehicle strategy and helps position our operations for long-term competitiveness and future opportunities,” Honda Canada president and CEO Dave Jamieson said in a news release quoted by CBC.

The announcement follows Honda’s decision in May to indefinitely suspend plans for a $15-billion Canadian electric-vehicle complex in response to dwindling demand. That project, announced in 2024, would have included vehicle assembly and battery production facilities, with the potential to add 1,000 manufacturing jobs in Alliston.

The EV project had been set to receive upwards of $5 billion in federal and provincial funding, but no money had been transferred. Its suspension did not affect existing employment or production at Alliston, CBC reported.

Honda also announced in May that it planned to introduce 15 new Honda and Acura hybrid models globally by 2030, with North America expected to be the main market for many of them. More than 400,000 vehicles were produced at Alliston last year.

Sources