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Ottawa, province give grants of $42M each to Honda for Ontario plant

Ottawa, Ontario give $42M each to Honda

ALLISTON, Ont. — The federal and Ontario governments are each providing Honda Canada with grants of up to $41.8 million for upgrades and research and development at its operations in Alliston, Ont.

The government money, along with up to $408.3 million from Honda itself, will go toward vehicle-assembly technology, as well as the design and construction of a new paint shop that is expected to cut greenhouse gas emissions nearly in half.

The conditional grants and Honda investment will also go toward research and development "to support production of future vehicle models, including software upgrades and prototyping of new components."

The investments aren't expected to lead to any new jobs, but the provincial government says the money will ensure 4,000 jobs at the Alliston facility, which produces the Civic and CR-V models, are retained.

Ontario's Economic Development and Growth Minister, Brad Duguid, has recently been trying to ease fears that U.S. President-elect Donald Trump will harm the province's auto sector, after Trump threatened to impose taxes on cars imported into the U.S. from Mexico.

Duguid says Ontario has recently attracted $1.5 billion in new auto-sector investment, including at Chrysler and Ford's facilities in Windsor and General Motors' facilities in Woodstock and St. Catharines, which he calls "huge votes of confidence" and says there is "no indication they'll be adversely affected."

Honda, Chrysler, Ford, GM and Toyota all have facilities in Ontario — the only subnational jurisdiction in the world that is home to all five — and assembly and parts production directly supports more than 100,000 jobs in the province.

Ontario has provided hundreds of millions of dollars in grants to automakers in the past several years, including up to $85.7 million to Honda in 2014 for its Alliston plant, $85 million to Fiat Chrysler last year for an expansion of its minivan assembly plant in Windsor, $42.1 million to Toyota in 2015 for upgrades at its Cambridge assembly plant and a new line in Woodstock, and $70.9 million in 2013 to Ford for its Oakville assembly plant.

Ottawa has also handed out millions in grants during that time, and federal Economic Development Minister Navdeep Bains said the sector is a key driver of economic growth.

"This investment in Honda of Canada will bring significant economic and environmental benefits to Canada both now and in the long term," he said in a statement. "It will keep our industry competitive and ensure that well-paying middle-class manufacturing jobs stay in Canada."


The Canadian Press