Honda Invests $166 Million to Restart Engine Production at Ontario Plant Amid U.S. Tariffs
Honda is investing $166 million to retool its Alliston, Ontario plant and restart engine production for hybrid and gas vehicles. The move is part of a broader $867 million investment backed by federal and provincial governments to maintain 4,000 jobs as the auto industry navigates U.S. tariffs.
Honda is spending $166 million at its auto plant in Alliston, Ontario, to restart its engine shop and retool for updated hybrid-electric and gas-powered car models. The expenditure is part of a total announced investment of $867 million, which includes $313 million from the federal government and $156 million from the Ontario government. It remains unclear whether the taxpayer contributions are loans or grants, as government departments did not immediately respond to inquiries.
The investment will help maintain 4,000 jobs at the Alliston plant. The facility's engine factory closed in 2024 but will now supply power motors to about one-quarter of the factory’s total production of Civics and CR-Vs sold in Canada. Most cars produced at the Alliston factory for export to the United States will continue to use engines made by Honda in Ohio.
Dave Jamieson, CEO of Honda Canada Inc., stated that the renewed investment reinforces Canada’s role in Honda’s North American growth and hybrid strategy. Industry Minister Mélanie Joly said the federal investment strengthens supply chains and supports well-paying jobs, while Vic Fedeli, Ontario’s Minister of Economic Development, said the provincial support protects workers and sustains the industry.
The announcement comes as General Motors and Stellantis NV have cut Ontario production and idled plants due to U.S. tariffs applied in 2025. Canadian-made content is exempt from Ottawa’s 25-per-cent retaliatory tariffs on U.S. automotive goods. Brendan Sweeney of the Pacific Manufacturing Association of Canada noted that strong consumer demand and long-term corporate belief ensure Honda keeps producing despite tariffs.
Honda recently marked its 40th year of making cars in Canada and is the country’s second-largest producer by volume. The company made more than 400,000 cars in Canada in 2025, bringing its total production since starting operations to over 11 million.