ALLISTON, ONT. — For a few hours, an entire town held its breath.
By mid-afternoon Tuesday, Alliston could finally exhale after learning that Honda Canada is keeping full production at its local plant “for the foreseeable future.”
The collective sigh of relief came in the wake of a Japanese newspaper report earlier in the day that Honda was considering shifting production to the U.S. to avoid auto tariffs.
It was just another day in a global trade war, sparked by U.S. President Donald Trump’s tariffs.
“We can confirm that our Canadian manufacturing facility in Alliston, Ontario, will operate at full capacity for the foreseeable future and no changes are being considered at this time,” the company said Tuesday afternoon. “We constantly study options for future contingency planning and utilize short-term production shift strategies when required, to mitigate negative impacts on our business.”
“This is really a Honda town,” said Neil Garbe, chief administrative officer of New Tecumseth, the local municipality about an hour north of Toronto of which Alliston is a part.
The 4,200 people employed at the Honda assembly and engine plants are just a part of the company’s local impact, Garbe said.
Local retailers, event organizers and even the area hospital’s expansion plans have benefited from the Japanese auto giant’s presence since 1986.
“It touches every part of the community,” said Garbe.
The entire town of New Tecumseth has a population of 43,000, with just over 23,000 of that in Alliston itself.
Like other Ontario communities with a big auto industry presence, it has been a nerve-wracking few months in the area, Garbe admitted, with a fast-moving global trade war potentially having such devastating local impacts.
“It’s such a challenge, right? Because it changes moment to moment. Tweet to tweet,” said Garbe. “It just creates a lot of uncertainty for everyone.”
At the Alliston branch of Royal LePage, the uncertainty has had a chilling effect on what was widely expected to be a hot spring real estate market.
“People fear the unknown,” said Frank Gray Jr., broker and managing partner of the Alliston Royal LePage office, explained. “And it’s because of Trump. It’s like the wave of plagues. Now it’s the plague of Trump. Next will be locusts.”
For small business owners like Frances Pruim, the Trump chaos has been anything but helpful. Still, Pruim said there’s no point being anxious all the time.
“Worrying is not going to change anything,” says Pruim, who runs a used bookstore. “I think that you just need to carry on and hopefully come through with some calmness.”
A Japanese newspaper said Honda was considering moving some of its auto production to the U.S. from Mexico and Canada. Nikkei first reported that Honda was considering the shift as it aims to produce 90 per cent of its cars sold in the U.S. locally, up from the current 70 per cent.
The report sparked an outcry at Queen’s Park and on the federal campaign trail.
Ontario premier Doug Ford vowed to keep Honda in the province, and said the company is already maxed out in the U.S.
“They’re at 100 per cent capacity right now (stateside),” he said Tuesday. “We’re going to keep Honda here and I’ll do everything I can to protect the people and their jobs.”
The head of Canada’s Automotive Parts Manufacturers’ Association said Honda likely wouldn’t need to lay off workers, even if it shifted production of its CRV from Alliston to the U.S., as Nikkei suggested.
“They could move the CRV and still be committed to the Civic,” said Flavio Volpe, estimating that the Alliston plant produces 400,000 vehicles per year. “They’ve got the Civic there in Alliston, too, and that’s been the No. 1 selling car in Canada for 40 years.”
And, said Volpe, Honda has a long history of keeping its workers around, even during the 2008 financial crisis or other market downturns.
“Honda has never in any of these crises pulled back or laid off any workers,” said Volpe, who suggested that Honda and Toyota have stronger financial foundations than their North American rivals.
The president of Global Automakers of Canada (GAC), which represents Honda, also said he didn’t expect layoffs.
“They’ve never laid off a worker in Canada,” said David Adams. “I don’t see that changing.”
Still, autoworkers in Canada aren’t exactly out of the woods yet, warned Lana Payne, national president of Unifor, the country’s largest private sector union.
All five of the companies which produce vehicles in Canada are still mulling the impact of Trump’s trade war, Payne said.
‘If these companies want to sell in Canada they are going to have to build in Canada.’
“I can say knowing these companies that there are a bunch of contingency plans on boardroom tables now. And none of them are good for Canadian workers,” Payne warned. “Everything will be a fight. And we are going to continue to fight hard. If these companies want to sell in Canada they are going to have to build in Canada.”
Already, Stellantis has paused production at its assembly plant in Windsor, putting thousands of people out of work. And GM said it is temporarily closing the CAMI plant in Ingersoll, and will resume production in October at a lower level.
On April 3, Trump imposed a 25 per cent tariff on all cars and light trucks imported to the U.S.
He also announced imported automotive parts would face a tariff no later than May 3, but mused this week that he might consider delaying the parts tariff.
American officials have also said there will be a partial exemption for cars made with parts from the U.S., although it’s still not entirely clear how that will work.
Canada retaliated in kind, with a 25 per cent tariff on American-made cars imported to Canada.
Tuesday, federal finance minister François-Philippe Champagne announced that auto manufacturers will be allowed to import a certain number of U.S.-assembled vehicles free of the counter-tariffs. Champagne didn’t reveal each company’s individual quota for the exemption, but said it will drop if there are reductions in their Canadian production or investment.
For weeks, auto industry insiders have predicted that tariffs could mean most of North America’s highly integrated auto sector could grind to a halt.
The Nikkei report comes as Honda Manufacturing of Canada says it’s continuing to work on a massive expansion of its Canadian operations that includes two new plants dedicated to electric vehicle and battery manufacturing at its Alliston site.
The $15-billion project — which has the support of the federal and Ontario governments — is expected to create at least 1,000 new jobs.
It also came as Japan’s chief trade negotiator is set to visit the U.S. this week for talks.
With files from Robert Benzie, Tonda MacCharles, Raisa Patel, Metroland staff and Star wire services.
