Canada's next EV supply chain plant landing in Port Colborne, Ont. | CBC News (2024)

Janyce McGregor · CBC News

· Posted: May 13, 2024 11:21 AM EDT | Last Updated: May 14

The nextcommunity set for a massive boost to its local economyas part ofHonda Canada's $15-billion investment to establish a Canadian electric vehicle supply chain will be Port Colborne, Ont.

Company executives are expected to join Prime Minister Justin Trudeau and Ontario Premier Doug Ford, as well as federal Innovation Minister François-Philippe Champagne and Ontario's economic development minister, Vic Fedeli, and municipal leadersat anofficial announcement on Tuesday.

On April 25, Honda announced a majorexpansion of its original Canadian facilityin Alliston, Ont.,to bothmanufacture batteries and assemble electric vehicle versions of its top-selling brands.On the same day, Japan's Asahi Kasei Corporation announceda new partnership with Honda to build Canada's first-ever lithium ion battery separator plant in Ontario— but the municipality that was the successful bidder for this facilitywas not revealed.

iPolitics was the first to report that Honda would announcea facility in Ontario'sNiagara Region. Over the weekend, word spread on social media that Port Colbornewaschosen. A senior government source confirmed the location to CBCNews on Monday.

Asahi Kasei's announcement last month saidHonda'spartner is investingnearly $1.6 billion in this separator facility.

WATCH |Freeland on Honda's expanding Ontario footprint

The federal and provincial governments each contributed$2.5 billion in tax credits and other government incentives to attract Honda's business to Ontario amid fierce global competition for new electric vehicle manufacturing investments.

Both levels of governmenthave yet to detailwhat share of these taxpayer incentives helped securethe Port Colborne plant specifically.

Tax credits attractEV investments: Freeland

Finance Minister Chyrstia Freeland visited a child-care facility in St. Thomas, Ont. Monday and did not answer a question from CBC News askinghow much the government is contributing for this plant or how many jobs it was counting on in return for that taxpayer contribution. Instead, she talked about how the Volkswagen battery plant now under construction in St. Thomasis transforming that cityfrom a community in decline to one that's "vigorously growing."

"You can see it on the street," the minister said, linking the arrival of these EV battery plants to the overall success of her government's economic plan.

WATCH | Breaking down Honda's $15B EV investment:

Freeland called on all parties to help pass two budget bills that implement the Liberal government's new suite of investment tax credits, including its new supply chain tax credit specifically designed to encourage vertical investments like Honda's.

"It's not some abstract thing," she said. "Getting these credits passed into law is what we need to make investments like the Honda investment real, to get that money coming into our country and to get the jobs that it brings."

Winnipeg wasin the running to host theseparator plant, toutingManitoba's ability to provide renewableelectricity and critical minerals. However,Manitoba's capital was outbid by southwestern Ontario.

Quebec also missed out ona Honda manufacturing facility. When the company revealed last month that it would locate all of its new plants in Ontario, the Legault government complained the Japanese carmakerhad becometoo greedy.

The other Ontario municipality that's in line fora cathode active material and precursor (CAM/pCAM) processing plant, as part of ajoint venture with South Korea's POSCO Future M Co., Ltd., is expected to be announced by Honda in the coming weeks.

Amid rising concerns about the affordability of electric vehicles for consumers, Honda has predicted it will cut its battery-making costs by 20 per cent through the kind of vertically integrated supply chain it's establishing in Ontario.

The province is already home to a ready network of automotive parts suppliersand offers a relatively clean electricity grid, as well as convenient highway and bridge access to itsvaluable American consumer market.

Canada and Japan are bothmembersof the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, a trade deal thatallows for reciprocal labour mobility, as well as preferential tariff treatment for automotive parts and vehicles, if its requirements for regional manufacturing are satisfied.

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