Honda's EV delay shows how Canada's new Industry Minister has her work cut out for her
On the day that Mélanie Joly was sworn in as Canada's new Industry Minister, one of the world's largest automakers served warning that she has her work cut out for her, when it comes to maintaining any momentum for this country's nascent electric-vehicle sector.
The announcement by Honda Canada that it is delaying its $15-billion plans to make EVs and EV batteries in Ontario, by at least two years, is on its face less damaging than some other recent setbacks for the industry.
Nobody is being laid off, as when General Motors last month halted production of its BrightDrop electric delivery vans, because Honda is maintaining its existing (non-electric) vehicle assembly. Nor is Honda equivocating (for now, at least) about its commitment to Canadian EV-making in the long run, in contrast to the uncertain futures of everything from Umicore's plans to make battery materials in Ontario, to the Quebec battery plant that was under construction by troubled Northvolt AB.
'We have determined that the EV value chain initiative in Canada is essential to our electrified future,' Honda spokesperson Ken Chiu said on Tuesday. 'There are no plans to cancel or relocate the project at this time.'
But in terms of what it says about how Canadian industry will weather the storm caused by U.S. President Donald Trump's trade war, and by the impact of his anti-EV policies on an already slow-growing North American EV market, Honda's decision to pump the brakes may be more unsettling than any of those other developments.
That's because of both the nature of Honda's plans, and the nature of the company itself.
Among the major government-backed EV-making investments announced in the past few years, Honda's stands to be both the biggest and the best value from a Canadian perspective.
Whereas Stellantis NV and LG Energy Solution demanded up to $15-billion in cumulative production subsidies for a roughly $5-billion capital investment in a battery factory in Windsor, and Volkswagen Group similarly required up to $13-billion in production subsidies for a $7-billion battery plant, Honda settled for a comparatively modest $5-billion in subsidies for an investment that promises to be worth more than the other two combined.
Equally important as the dollar figures are what they cover. Honda's plans are by far the broadest – encompassing not just battery-making but also vehicle assembly and a pair of partnerships, with Japan's Asahi Kasei Corp. and South Korea's POSCO Future M Co. Ltd, to produce battery materials.
For a federal government – and an Ontario provincial government – whose stated intention is to capitalize on Canada's combination of natural resources and manufacturing expertise to build a start-to-finish EV supply chain, there could hardly be a better anchor investment. Nor is there one they could less afford to lose.
As for why Honda was willing to commit to it in the first place, without demanding that Canada match subsidies that were then available in the U.S. as Stellantis and Volkswagen did, a common refrain within the industry is that its corporate culture is different.
As with Toyota Motor Co., the other Japanese car-making giant with a long-time presence in Ontario, Honda has a reputation for being more patient and conservative in strategic decision-making than its North American or European competitors. It tends to stay and expand where it already has a footprint, and is less inclined to just follow whatever money governments are putting on the table.
That's cause for some reassurance, about the postponement being just that, and not a sign that Mr. Trump's war on the Canadian auto sector will cause Honda to pull up stakes and head south.
But when the least kneejerk of companies feels compelled to significantly adjust course, it's a sign of how strong the headwinds are.
In the here and now, Honda is forecasting a 70-per-cent drop in its net profit globally in the 2025-26 fiscal year, which it attributes largely to Mr. Trump's tariffs.
In plan-making for the rest of this decade, it's the uncertainty – about the ability to export into the U.S., about the extent to which North American EV demand will be throttled, about whether economic chaos affects purchases and investments of all sorts – that's the obvious cause for adopting a wait-and-see attitude. Honda alluded to as much on Tuesday, apropos the investment in Canadian EV-making, when it said it will 'continue to carefully monitor market conditions and reassess as needed.'
For Prime Minister Mark Carney's new government, and to some extent Ontario Premier Doug Ford's provincial one, the challenge will be to somehow mitigate that risk as much as possible, even if there is no way to eliminate it as long as Mr. Trump holds office.
There were a few hints of how they will attempt to do so during this spring's federal election campaign, including Mr. Carney's promise to explore purchase subsidies for EVs produced in Canada. But his government may have to move more decisively and expansively than those commitments suggested.
At the same time, Ottawa and the provinces (not just Ontario) now have all the more reason to try to expedite the mining of raw battery materials that are supposed to be one of the biggest draws for automakers that have committed to Canadian battery plants. The more completely the supply chain is taking shape, the more that starting or expanding production here will make sense, and the more that Canada will benefit.
That imperative is not a surprise, exactly.
At the end of last year, shortly before ending his tenure as industry minister – during which he had led Canada's successful courtship of automakers' EV-making commitments – François-Philippe Champagne told The Globe and Mail that the next step would be consolidating those investments.
It will now be up to Ms. Joly to make good on that, in a more urgent and fraught environment than Mr. Champagne or anyone else fully anticipated even a few months ago.
Hashtags

Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles


CBC
10 minutes ago
- CBC
Ex-cabinet minister says western separatism can fizzle out if Ottawa listens to grievances
Former federal Conservative cabinet minister Rona Ambrose says the secessionist sentiment in Alberta is an unwelcome source of uncertainty for investors — but it could fizzle out quickly if Ottawa handles it right. Ambrose, now deputy chair at TD Securities, said Tuesday there's a feeling of resentment in Alberta and in neighbouring Saskatchewan. "I think that it can dissipate quite quickly if some of these underlying issues around how the energy sector has been treated by Ottawa are dealt with," she told a panel discussion at the Global Energy Show. Prime Minister Mark Carney can't take those feelings lightly, she said. "We've had 10 years that have created a huge division, east-west, in between the federal and provincial governments. He's got to heal that," Ambrose said of environmental policies Carney's predecessor, Justin Trudeau, brought in. "And so decisions he makes are not just for the economic benefit of Canada, but it's for the benefit of national unity, which is the most important thing a prime minister should always have top of mind." Ambrose said outreach and trust-building is paramount and the federal-provincial relationship is "already better." The chief executive of one of Canada's biggest oil and gas companies said the complaints are valid even if the separatist talk isn't the most constructive way to go about expressing them. "The way this separatist movement has manifested itself is really rooted in some grievances that I think are real and have frustrated this region for a long period of time," Cenovus Energy chief executive Jon McKenzie told the panel. McKenzie told reporters on the sidelines of the conference he has not been hearing from investors about the separatist rumblings, and that he agrees the movement will "go away" if political leaders address the concerns. Separation talk ratcheted up since election Talk of Alberta going it alone or joining the United States has ratcheted up since the federal Liberals won a fourth term in office in April. In the province, where all but a few seats went Conservative blue, there is widespread discontent with federal environmental policies affecting the key oilpatch industry. Alberta Premier Danielle Smith has introduced a bill that, if passed, would make it far easier for Albertans to launch referendums on various topics — including splitting from Canada. Last month, the top executive of another major Alberta company said mere talk of secession has already been hurting the investment climate. Atco Ltd. CEO Nancy Southern said Asian partners in a major hydrogen project indicated they won't make final investment decisions unless there is certainty around the issue. "There's just too many questions for them to be confident that they can move forward with large-scale investment decisions, and so I think the separatist discussion is very unhelpful and not constructive to Alberta," Southern said in a May interview. Questions include how an independent Alberta would get its products to coastal ports, what kind of trade deals it would have with its neighbours, what currency it would use and how stable the economy would be. Southern said she understands Albertans' frustration with the federal government. "We have had the short end of the stick on many occasions as a result of new regulations and legislation and rule of law," Southern said.


CTV News
35 minutes ago
- CTV News
Anti-racism a ‘core municipal responsibility' says Sohi during update on Edmonton's strategy to address hate-based violence
The Sisters Dialogue unveiled a new ad campaign aimed at addressing gender-based Islamophobia in Edmonton. (Evan Klippenstein/CTV News Edmonton) The City of Edmonton received an update on its anti-racism strategy on Tuesday. The strategy to address hate-based violence and support the communities it affects was introduced by Mayor Amarjeet Sohi after the 2021 municipal election and was adopted by city council in 2022. 'Anti-racism work is not peripheral. It is a core municipal responsibility,' Sohi said on Tuesday. 'As Edmonton grows, this work ensures our services are becoming more accessible, our communities are inclusive, and our collective potential is fully realized.' During a Tuesday update, city administration said two out of three initial recommendations in the strategy had been completed. Those include expanding anti-racism grant funding – which Sohi said has supported about 140 initiatives in the city – and creating an organization within city administration to incorporate anti-racism and reconciliation action into city processes. That organization will work to meet seven corporate commitments over the next two years aimed at dismantling systemic barriers. 'The team's mandate involves working closely with colleagues across the corporation to celebrate diversity, promote inclusion, and begin to change a system that wasn't originally designed for everybody to be more equitable,' Salima Ebrahim, chief of staff to the city manager, explained. Sohi said he and members of his office also joined the Bloomberg Harvard City Leadership Initiative to learn more about how other North American cities are tackling racism and how Edmonton can follow suit. 'Are our services accessible for people from diverse backgrounds? Are we delivering the right level of services for those communities' needs, such as support for newcomers or building an efficient, effective public transit system that racialized people, or newcomers and low income people rely on? 'I think those are the things that we need to continue to monitor and press upon to see the positive change that we want to see.' The third priority, to create an independent anti-racism body has yet to be completed. Sohi said a 15-person panel has been assembled to advise the city on how best to create that body. More information on Edmonton's anti-racism strategy can be found on the city's website.


CTV News
35 minutes ago
- CTV News
Moving Whitecaps from Vancouver would be ‘a crime': FIFA vice president
Workers clear the turf at B.C. Place during a FIFA World Cup 2026 update in Vancouver, Tuesday, April 30, 2024. THE CANADIAN PRESS/Ethan Cairns A vice president of soccer's global governing body says moving the Vancouver Whitecaps would be 'a crime' and negatively impact the city's reputation after it hosts games at next year's World Cup. FIFA vice president Victor Montagliani spoke at a Vancouver Board of Trade event Tuesday, telling the crowd that relocating the Major League Soccer club would suggest to the world that the city simply wanted to host a party and isn't actually serious about the sport. 'You don't want to come out of the World Cup and your professional football club is playing in Sacramento,' said Montagliani, who is also the president of CONCACAF, soccer's governing body in North and Central America and the Caribbean. 'That would be a bruise on the city.' The Whitecaps announced in December that the current ownership group — Greg Kerfoot, Steve Luczo, Jeff Mallett and former NBA star Steve Nash — had put the team up for sale. Speculation has since been rife that an out-of-town buyer will purchase the club and move it out of Vancouver. In April, the Whitecaps revealed that they are in talks with the City of Vancouver about building a new, soccer-specific stadium in the city. Club chief executive officer Axel Schuster said at the time that those plans are intrinsically tied to the sale of the team. 'We are only working on one plan, one goal, and this is to keep the club in Vancouver and to find a very good setup for the future for this club in Vancouver,' he said. 'And part of all of this is to look in every possible option that might be needed to do this successfully.' Keeping the Whitecaps in Vancouver is key to continuing the city's love and support for soccer, Montagliani said on Tuesday. 'It is going to be a party — trust me. But it can't just be about a party,' he said. 'It's got to be about the youth. It's got to be about the game itself. And it's got to be about the continuation of the game.' He noted that Canada had to create its own league, the Canadian Premier League, in order to be eligible to bid for the 2026 World Cup. Losing one of the country's biggest teams would be a step backward, he said. 'To lose an MLS club on the back of the World Cup would be a capital crime, in my opinion,' he said. Montagliani is in his hometown of Vancouver to mark the one-year countdown to the tournament's kick off on June 11, 2026, when the first games will be played in Mexico City and Guadalajara. The final is set for July 19 at MetLife Stadium in East Rutherford, N.J. Vancouver and Toronto are among 16 host cities across Canada, the United States and Mexico. Vancouver will host seven matches across the tournament, starting on June 13, 2026, including five in the opening round, one in the round of 32 and one in the round of 16. Organizers in B.C. said in April 2024 that it will cost between $483 million and $581 million for Vancouver to host the tournament. That number includes costs to the city, the province and upgrades to B.C. Place. Renovations are currently underway at the 54,500-seat stadium, including new and upgraded suites, more and larger elevators, gender-neutral bathrooms, improved Wi-Fi and a new central video board. A natural grass pitch will also be installed. The B.C. government has said it expects the World Cup will generate enough revenue to result in a net cost of between $100 million and $145 million. Vancouver and Canada as a whole have a unique chance to create something special with the World Cup, Montagliani said. 'For me, it's an opportunity of a lifetime for Canada,' he said. 'Maybe this has done us a favour, in terms of what's going on (with U.S.-Canada relations), in terms of our Canadiana. I really think it's an opportunity for us to take a global game and make it ours.' This report by Gemma Karstens-Smith, The Canadian Press, was first published June 10, 2025.