Prime Minister Mark Carney acknowledged that the Canadian auto industry is facing “challenges” due to U.S. tariffs. His comments come amid reporting from a Japanese outlet that Honda is indefinitely suspending plans to build a $15-billion electric vehicle plant in Ontario.
“There are challenges with the U.S. tariffs, unjustified tariffs in the auto sector,” Carney said to reporters on Wednesday morning in Ottawa. “We’ll continue to work with companies in the sector, helping them reposition, reinvest, supporting workers there. We’ll continue to do what’s necessary, including getting the right deal in Canada’s interest.”
Carney did not mention Honda specifically.
On Tuesday, Nikkei Asia reported that slow U.S. demand is pushing the Japanese automaker “to put hybrids at the centre of its North American strategy.”
In May 2025, Honda announced it would delay the project for two years, with Honda chief executive Toshihiro Mibe saying the company would examine where the EV market is before deciding whether to move forward with the project.
Speaking to CTV’s Your Morning on Wednesday, Finance Minister Francois-Philippe Champagne would not confirm the report, but said “there seems to be a delay” with the transition to electric vehicles around the world.
“The word is ‘hold.’ It’s not unique to Canada. ... If you look at what’s happening in Europe, what’s happening also in the United States,” Champagne said. “It’s just that the market has been shifting. If you ask my opinion, it’s been shifting a bit because of policies south of the border.”
In a statement to CTV News, Industry Minister Melanie Joly’s office said the global automotive sector is experiencing “significant change.”
“American tariffs and changes to U.S. domestic policies are creating real pressures for automakers, prompting some to delay or scale back investments in electric vehicle and battery projects,” the statement reads.
“Canada will continue to support and protect existing automotive facilities by mitigating tariff pressures and sustaining the production of fuel-efficient vehicles, while positioning the sector for long-term growth, resilience and global competitiveness,” Joly’s office added.
Honda Canada, meanwhile, told CTV News the company has “nothing to report at this time.”
Speaking to reporters in Mirabel, Que. on Wednesday — following the announcement that Airbus Canada has inked a deal with AirAsia to sell it 150 Canadian-made A220 jets — Carney emphasized that Honda has not made any news of a pause official.
“We’re in constant contact with all the major automakers … currently producing in Canada and potential, and that includes Honda, so we’re in discussions with them constantly," Carney said.
Karim Bardeesy, parliamentary secretary to Joly, also told CTV’s Power Play on Wednesday that the minister was in touch with Honda on Wednesday.
“What’s happening is they’re communicating to us that they’re going to be in touch soon publicly with their medium- and long-term plans,” Bardeesy said.
The Honda plant was slated to begin operating as early as 2028.
Conservatives criticize Liberals’ auto strategy
A number of Conservative MPs say a source of the problem is the federal government’s auto strategy which aimed to make Canada a global hub for electric vehicles.
“The market demand is not there and these individual manufacturers are choosing to delay or slow their EV production,” Conservative critic on international trade Adam Chambers said. “But they moved traditional vehicle manufacturing outside of Canada to make room for EV production, because the government put a lot of subsidies on the table.”
Conservative labour critic Kyle Seeback lamented the overall lack of progress in talks between Canada and the U.S. on removing punishing tariffs on Canadian steel, aluminum and copper. The Section 232 tariffs were increased on April 6, to 50 per cent on the full customs value of items made entirely or almost made entirely of those metals.
“I tried to get an answer from Ambassador [Mark] Wiseman on this. He refused to say when the last time they actually had a formal meeting and offers were exchanged on the tariffs,” Seeback said. “The Liberals, Mr. Carney, the ministers, they have to explain to Canadians why the strategy of delay is worth all these people losing their jobs and all these plants and other things closing.”
Lack of U.S. incentives is to blame: Volpe
The president of the Automotive Parts Manufacturing Association, Flavio Volpe, believes the bigger factor in Honda’s reported decision, is the Trump administration’s decision to remove all federal EV tax credits and incentives in 2025.
“This is really about the Americans hollowing out the EV market and Honda having planned to serve that huge market from here,” Volpe told CTV News.
Volpe adds that if Honda doesn’t move forward with the $15-billion plan for the EV and battery plant in Alliston, Ont., it will not affect the current footprint in Canada.
“In Canada, they make 400,000 cars a year, have a very healthy supply chain. It’s that potential upside, that we all wanted to bank on that is paused indefinitely,” Volpe said.
U.S. market access is critical for Japanese investment
In an interview with CTV’s Question Period back in February, Japan’s Ambassador to Canada Kanji Yamanouchi said continued access to the U.S. market, as provided for under Canada-U.S.-Mexico Agreement (CUSMA), is essential for current and potential increased Japanese investment in auto manufacturing in Canada.
“All those cars made in Canada, of course sold in Canada, but at the same time, exported to the U.S. market,” Yamanouchi said at the time. “(For) private companies, that means they have to calculate to increase profit. So, CUSMA is a very important part of the calculation.”
CTV News reached out to the Japanese embassy for a response and they declined to comment at this time.
With files from CTV News’ Brennan MacDonald and The Canadian Press
