Prime Minister Mark Carney says Canada’s auto industry is facing real pressure from U.S. tariffs, after reports said Honda has indefinitely suspended plans for a $15 billion electric vehicle and battery plant in Alliston, Ontario. According to CTV News, Carney did not directly name Honda, but said the federal government will continue working with companies in the sector to support workers, encourage reinvestment, and pursue a deal that protects Canada’s interests.
The reported pause comes at a difficult time for Canada’s electric vehicle strategy. Nikkei Asia reported that Honda is shifting its North American focus toward hybrids because of slower electric vehicle demand in the United States. Honda had already announced in May 2025 that it would delay the Ontario project for two years while it reviewed market conditions.
Finance Minister François Philippe Champagne said the situation appears to reflect a broader global slowdown in the electric vehicle transition. Speaking to CTV’s Your Morning, he said the market has been shifting in Europe, the United States, and other regions, partly because of policy changes south of the border.
Industry Minister Melanie Joly’s office also said automakers are facing significant global change, including pressure from American tariffs and U.S. domestic policy shifts. Her office said Canada will continue supporting existing auto facilities while working to protect production, jobs, and long term competitiveness.
Honda Canada told CTV News it had nothing to report at this time. The proposed Alliston facility had been expected to begin operating as early as 2028 and was promoted as a major step in Canada’s plan to build a stronger electric vehicle and battery supply chain.
Conservative MPs criticized the federal government’s auto strategy, arguing that market demand for electric vehicles has not developed as quickly as expected. Conservative trade critic Adam Chambers said manufacturers are delaying or slowing electric vehicle production after governments encouraged them to shift capacity toward EVs.
Automotive Parts Manufacturing Association president Flavio Volpe offered a different view, telling CTV News that the bigger factor is the Trump administration’s removal of U.S. federal electric vehicle tax credits and incentives in 2025. He said Honda had planned to serve the large American market from Canada, and that weaker U.S. demand has affected the business case.
Volpe added that Honda’s current Canadian operations remain strong, with the company producing hundreds of thousands of vehicles annually and supporting a healthy supply chain. However, the potential expansion tied to the $15 billion EV and battery plan is now reportedly paused indefinitely.
The situation highlights how closely Canada’s auto future is tied to U.S. market access, trade policy, consumer demand, and government incentives. For more updates on Canadian business, trade, and industry news, visit Weekly Voice and the Canada news section.
