One of Ontario’s biggest and most reliable automakers is warning Canadians not to take its presence here for granted.
“Companies don’t automatically keep building vehicles in the same country just because it’s always been that way,” Honda Canada president Dave Jamieson told an industry summit convened by the Automotive Parts Manufacturers’ Association in Vaughan this week.
It wasn’t a throwaway line. Jamieson spent almost his entire speech — one of his first since taking the job last year — making the case that Canada is at a policy crossroads that could determine whether his company keeps investing in its manufacturing base in Alliston, Ont.
As for what that policy danger is exactly, he pointed to three main irritants.
The first one — the most obvious and least within Canada’s control — is Donald Trump’s tariffs on Canadian auto exports, which impede access to a U.S. market where the bulk of Canadian-made cars are sold.
Second is the federal government’s plan for regulating vehicles’ tailpipe emissions, which replaced the electric-vehicle sales mandate that Honda and other automakers lobbied against, but which he argued is still misaligned with the cars made here.
The third is Ottawa’s (thus far modest) opening up of the Canadian market to Chinese EVs, which compete on uneven ground because of heavy state backing.
None of this will seem surprising on first glance. Carmakers are constantly threatening to pull up stakes if they don’t get their way, and some of them have already been vocally complaining about all of the above.
But there’s a reason why Jamieson’s speech turned some heads even in an audience of people immersed in the industry. Coming from this particular automaker, it was deeply unsettling. And it deserves to be taken seriously by Canadian policymakers — though not necessarily in exactly the way Honda intended.
Since it started making cars here in the 1980s, Honda — along with Toyota, the other Japanese giant — has been a more patient and stable corporate citizen than the three North American automakers with longer Canadian history.
General Motors, Ford and Chrysler (now under Stellantis) have frequently held Canadian governments hostage with demands for subsidies and other favourable policies, only to shrink their operations anyway. Honda and Toyota haven’t been above taking some public dollars themselves, but they’ve prided themselves on playing the long game.
While workers at other companies’ plants in Brampton, Oshawa and Ingersoll have been laid off in recent years, Honda has been a steadier employer for over 4,000 people northeast of the GTA.
Meanwhile, its share of Canadian vehicle production has grown dramatically. A couple of decades ago, Toyota and Honda combined accounted for less than one third of that manufacturing. Now they’re responsible for more than two thirds.
Even when Honda announced last month that it was putting on ice its $15-billion plans to make EVs and batteries in Alliston (for which it demanded less exorbitant subsidies than those demanded by other EV battery plants in Ontario), the company gave no indication it was reconsidering its long-term presence in the community.
That changed with Jamieson’s speech, which you can rest assured was delivered with the blessing of Honda’s head office in Tokyo.
It should set off alarms in Ottawa, as well as Queen’s Park. But whether that leads to exactly the strategic decisions that Honda is seeking from Mark Carney’s government is a different matter.
Ottawa will do what it can to restore access to the U.S. market. Speaking at the same conference on Tuesday, chief trade negotiator Janice Charette stressed that during Canada-U.S.-Mexico Agreement (CUSMA) talks this summer, Canada will prioritize relief from the sectoral tariffs that Trump has separately imposed. But she also said the goal was to “reduce if not eliminate” those tariffs, which suggests we may have to continue living with them to some degree.
The government may soften its planned vehicle-emissions rules some more, to address Honda’s complaints that they effectively require EV adoption, and don’t sufficiently reward the hybrid vehicles to which the company is staking more of its medium-term plans.
But by citing those first two complaints as reasons Honda could pull back here, Honda inadvertently made a pretty good case for Carney actually doubling down on his aim of getting Chinese EV companies to set up factories here, in return for being allowed to sell more cars to Canadians.
Those companies might be uniquely willing to endure U.S. tariffs on Canadian-assembled cars, because of their interest in establishing a beachhead here. (And, yes, because their state backing enables them to be less concerned about near-term profits.)
And they certainly wouldn’t object to any government policies that encourage Canada to join the rest of the world outside the U.S. in shifting to EVs, considering that’s the space they’re dominating.
There’s still good reason for caution. As Jamieson pointedly noted, those companies have some recent history elsewhere (including in Europe and Brazil) of setting up factories that only do final assembly of made-in-China components, which provides limited domestic value.
But as a matter of bet-hedging, at least, China could look more attractive now than it did at the start of this week. If even the most stable of the incumbents isn’t sure it’ll make cars here in the long run, it might be harder to turn away newcomers looking to put down roots.
