HONDA TO INVEST $400M IN CANADA

Governments add $80M for Ontario plant

TORONTO • Honda Canada Inc.’s plant in Alliston, Ont., is getting a nearly $500-million upgrade, the company said Monday, in an announcement that coincided with long-awaited changes to Ottawa’s automotive innovation fund.

Honda will spend a little more than $400 million on the plant, which employs some 4,000 people and builds the popular Civic compact car and CR-V sport utility vehicle. Honda’s investment will be supported by an additional $83.6 million in government money, split equally between the Ontario and federal governments.

Honda said it will use the money to build a “state-ofthe-art paint shop” that will reduce greenhouse gas emissions by 44 per cent.

“As a result of these upgrades, Honda of Canada Manufacturing will continue to provide thousands of well-paying, high-quality jobs in Alliston and throughout Canada,” Honda Canada chief executive Jerry Chenkin said in a statement. “Thank you to both the Ontario and federal governments for creating an environment that will allow us to further modernize our manufacturing facilities and make innovative upgrades possible.”

The news adds to a wave of spending promises for the Canadian auto industry in recent months. During labour negotiations with the Detroit Three automakers in the fall, Unifor got the companies to commit nearly $1.6 billion to their Canadian operations. Those investments will extend the life of a General Motors Co. plant in Oshawa, Ont., a Ford

Motor Co. engine plant in Windsor, Ont., and a Fiat Chrysler Automobiles plant in Brampton, Ont., among other things.

Honda isn’t unionized so was not part of those talks.

In conjunction with the Honda announcement, the federal government said it will introduce changes to its automotive innovation fund (AIF), which has been a source of much industry griping. Previously, the AIF only offered taxable, repayable loans, but recipients complained that this made Canada uncompetitive with Mexico and some southern U.S. states, which offer automotive grants instead.

On Monday, the government said it will now “include the option of recipients receiving contributions without the expectation of repayment.”

Navdeep Bains, minister of innovation, science and economic development, said non-repayable contributions must be “strategically significant in nature,” and must meet one of four criteria: leveraging advanced technologies, investing in clean technologies, securing existing facilities into the future and growing Canada’s automotive footprint.

Although GM, Ford, FCA and Unifor all emphasized that the investments secured during the recent labour talks were not contingent on government support, union president Jerry Dias also made it clear that governments were expected to come to the table.

“There is going to be a much broader discussion that’s going to happen in Canada over the years to ensure that this industry, the No. 1 export industry in Canada, is not only stable for the present but we’re also going to be challenging governments and having discussions with governments about the long term,” Dias said at a press conference announcing the union’s deal with FCA Canada in October.