Honda Canada will unveil a $1.4-billion plan to build its next-generation hybrid-electric Civic and CR-V models in Ontario, The Logic has learned, a package that includes $263 million in financial support from the federal and provincial governments.

A spokesperson for Honda Canada confirmed the news, saying an announcement was scheduled for Wednesday morning. The Ontario government also confirmed the plan after The Logic obtained documents outlining some of its details. Innovation, Science and Economic Development Canada, the federal department involved in the plan, did not immediately respond to questions.

The money is part of the massive public spending exercise on which the federal government and the governments of Ontario and Quebec have embarked in the hopes of transitioning Canada’s automotive industry toward the manufacture of hybrid and fully electric cars. Electric vehicles are one of the cornerstones of Prime Minister Justin Trudeau’s plans to reach net-zero emissions by 2050. 

Honda will retool its facility in Alliston, Ont., to build its next-generation Civic sedan and CR-V crossover sport-utility vehicle, including hybrids that blend combustion engines with electric motors, according to the documents. Ontario and Ottawa will each provide the company $131.6 million over nine years as part of the agreement, the province confirmed. 

In a statement, Ontario Economic Development Minister Vic Fedeli said his government was “proud to support Honda Canada’s major investment,” and said it was in part the result of a long-term government effort to drive down operating costs for businesses. 

“By reducing the cost of doing business in Ontario by nearly $7 billion annually, our government has created the right economic conditions to attract yet another historic investment that further positions Ontario as a North American leader in developing and building the cars of the future,” he said. 

Honda’s Alliston operations consist of two facilities that currently produce the CR-V and several Civic models. The first facility began operations in 1986. 

The company’s announcement Wednesday would mark the latest in a string of auto-related investments in Ontario and Quebec to move the industry toward hybrid and electric vehicles. 

In 2020, Ford Motor Company detailed its $1.8-billion plan to recalibrate its Oakville, Ont., facility for electric vehicles, supported by a nearly $600-million contribution from the federal and Ontario governments. FCA, formerly Chrysler, has said it will invest up to $1.5 billion at its Windsor facility in part to begin manufacturing EVs, but has not offered specific details. 

Meanwhile, as The Logic first reported, South Korea’s LG Energy Solution has been in advanced talks with the Ontario government over establishing a major battery-manufacturing facility in the province. Still, sources have told The Logic automakers and battery manufacturers are likely putting off other major investment plans in Canada in response to U.S. President Joe Biden’s Build Back Better legislation, which effectively subsidizes electric-vehicles and batteries built in the U.S.

Quebec has also seen a share of investments in batteries and electric vehicles. Earlier this month, General Motors and South Korea’s POSCO Chemical announced they would begin construction on a $500-million battery-materials plant in Bécancour. Quebec government officials have been in talks with Tesla to build a battery plant in the province. Quebec-based Lion Electric is also spending about $185 million to build a battery plant in Montreal. 

Toronto-based consulting firm Adamas Intelligence estimates that just seven cell suppliers globally, including Samsung, CATL and Panasonic, supplied more than 90 per cent of passenger EV battery cells in the first half of 2021, making their plants major hubs for auto suppliers like Magna.