TORONTO — Honda has announced that it will not shift any Canadian production to the United States for the time being, despite reports suggesting that such a move was under consideration.
This statement comes in response to a report from Japan’s Nikkei financial newspaper, which indicated that Honda was contemplating transferring enough production of its Canadian CR-V and Civic models to the U.S. to ensure that 90 percent of U.S. sales would be met with vehicles manufactured domestically.
The automaker is reportedly facing US$4.6 billion annually in tariffs for the 500,000 vehicles it imports into the U.S., including about 300,000 units from Canada, which has led to speculation about shifting production to mitigate costs.
Before April 3, the vehicles entered the U.S. without incurring tariffs, but the situation has changed drastically since then.
Despite the looming tariffs impacting all importers, Honda aims to maintain its current levels of production in Canada, as confirmed by spokesman Ken Chiu.
“We can confirm that our Canadian manufacturing facility in Alliston, Ont., will operate at full capacity for the foreseeable future, and no changes are being considered at this time,” Chiu stated.
This assurance aligns with earlier comments made by government officials who indicated that no operational changes were planned for Honda’s Canadian facility, which currently employs around 4,200 people and produced approximately 375,000 CR-V and Civic vehicles in 2023.
In addition to its Canadian operations, Honda does manufacture the same models in the United States, where recent reports suggested the company might hire more workers and add shifts.
However, Honda has not commented specifically on the Nikkei report regarding potential changes.
Federal Industry Minister Anita Anand also stated that she was assured by Honda that no changes would be made.
During a meeting with the head of Honda Canada, Anand was informed that the automaker remains committed to its operations in Canada.
Ontario Premier Doug Ford and his office revealed that while Honda expressed a desire to increase production in the U.S., it would not come at the expense of its Canadian production.
Despite Honda’s assurances, industry experts have cautioned that the new tariffs may compel companies to reduce production and potentially lay off workers, as the financial implications become increasingly burdensome.
For instance, Stellantis announced a temporary production halt at its Windsor, Ont., plant, as well as additional halts in the U.S. and Mexico on the day the tariffs came into effect.
Similarly, General Motors declared a temporary shutdown at its Ingersoll, Ont., plant last week, although the company attributed this specific decision to lower-than-expected demand for the electric vehicle delivery van produced there.
Toyota Canada, which manufactured nearly 534,000 vehicles in Canada last year, has indicated that it has no immediate plans to alter its production levels.
Prime Minister Mark Carney, during a campaign stop Tuesday, commented that U.S. President Donald Trump’s tariffs were aimed at dismantling the integration of North America’s auto industry.
“We are seeing some of the impacts in the short term with layoffs for some of our automakers and potential shifts in production,” stated Carney.
He expressed doubt that the Trump administration fully understands the deep integration of the industry and indicated that it might be necessary to make permanent the currently temporary tariff exemption on auto parts from Canada.
To mitigate the impact of tariffs on the Canadian auto sector, the federal government announced that producers maintaining their production levels in Canada would be authorized to import a limited number of U.S. assembled vehicles tariff-free.
This announcement came as Mazda confirmed it was halting production of its Canada-bound CX-50 vehicles at its Alabama facility due to the application of Canada’s counter-tariffs.
Conservative Leader Pierre Poilievre criticized Trump’s “unfair targeting of Canada,” while asserting that Canada’s counter-tariffs should remain intact.
NDP Leader Jagmeet Singh suggested that Canada should implement regulations preventing automakers from selling vehicles in the country unless they have a manufacturing presence there.
The tariffs raise significant questions not only about existing production but also about the substantial investments automakers have pledged for electric vehicle production.
Last year, Honda announced a $15 billion commitment to its Canadian operations aimed at constructing an electric vehicle supply chain in Ontario.
This initiative, supported by up to $5 billion in public funding, includes plans to build an electric vehicle battery plant adjacent to its existing facility in Alliston.
Ontario Economic Development Minister Vic Fedeli, who is scheduled to visit Japan on Sunday to meet with Honda, expressed confidence in the future of the electric vehicle investments the province has attracted.
Fedeli suggested that he does not believe an incoming federal government could undo the commitments and tax credit promises that persuaded Honda to invest in the region.
“I believe they’re contractually obliged,” Fedeli remarked.
As automakers grapple with the additional costs associated with tariffs, they must also consider how long these tariffs might remain in effect and what changes could occur in the future.
On Monday, Trump hinted at a potential pause on automobile tariffs to allow manufacturers time to adjust, though few specifics or certainties were provided regarding possible changes.
— With files from Allison Jones, Liam Casey, Kyle Duggan, Nick Murray, and David Baxter
This report by The Canadian Press was first published April 15, 2025.
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