Honda Canada says it will retool its manufacturing facilities in Alliston, Ont., to expand production of hybrid-electric and gasoline-powered vehicles.
The Japanese automaker announced Monday it is partnering with the federal and provincial governments to fund plant upgrades, including the reintroduction of engine manufacturing, with an initial $166 million investment.
It said that funding is part of a broader $867-million commitment that will enhance quality, efficiency and manufacturing flexibility. Of that total, the federal government said it will provide $313 million, while the Ontario government is kicking in $156 million.
"This renewed investment reinforces Canada's critical role in Honda's North American growth and hybrid-electric vehicle strategy and helps position our operations for long-term competitiveness and future opportunities," said Honda Canada president and CEO Dave Jamieson in a news release.
The funding will ensure Honda can maintain its workforce of 4,000 Canadian employees across two facilities at the Alliston plant, while supporting its Canadian auto production volumes.
The company said it will also strengthen the Alliston plant's operations to help meet growing customer demand for hybrid-electric vehicles in North America.
"This investment will strengthen our automotive supply chains, support thousands of well-paying jobs in Ontario and across the country, and help build a strong Canadian auto sector where workers build the cars of the future," said Industry Minister Mélanie Joly in a statement.
In May, Honda announced plans to introduce 15 new Honda and Acura hybrid models globally by 2030, with North America expected to be the primary market for many of those vehicles.
The automaker said it is investing across its manufacturing network in Canada, Ohio, Alabama and Georgia to support that strategy.
That same month, the company indefinitely suspended its plans for a $15-billion Canadian electric vehicle complex in response to dwindling demand.
Announced in 2024, Honda's EV project would have included a vehicle assembly plant as well as battery production facilities. It had said that new EV plant could create 1,000 incremental manufacturing jobs in Alliston.
It was set to receive upwards of $5 billion in federal and Ontario funding, however no money had yet been transferred.
The decision to pause those plans did not affect current employment or production levels at the Alliston plant.
More than 400,000 vehicles were produced at the site last year. Honda is Canada's second largest auto manufacturer by volume.
This report by The Canadian Press was first published Nov. 9,2026.
