Good morning everyone and thank you for being here today. And thank you, Flavio, for inviting me to speak this morning. It is an honour to share my thoughts and perspectives during this unique time for the Canadian auto industry.
To say the past year has been difficult for our industry would be an understatement. The old status quo has disappeared. The business conditions, norms and certainty we’ve relied on for decades, and built our integrated networks around, are no longer our reality.
Over the past year, a lot of people have tried to tell the auto industry’s story for us. Headlines predicted shutdowns. Forecasts questioned our future. Some even suggested Canadian auto manufacturing was on borrowed time.
But let me assure you; Canada’s auto sector is not only alive, but still one of the strongest manufacturing engines in this country. And while conditions continue to change rapidly, the industry, and Honda, continue to remain resilient in the face of these very strong challenges.
Honda is still building cars in Alliston, Ontario. We are still employing Canadians. We are still competing against other Honda manufacturing facilities in North America for vehicle allocation.
I’ll be transparent – it’s been difficult. And it will continue to be difficult. But Honda remains committed to our Canadian workers and Canadian consumers. Just like we have been for 40 years.
In fact, Honda Canada produced at full capacity last year – 400,000 vehicles – and we are on that same pace through the first five months of 2026.
So yes, Honda is managing today’s challenges. But our ability to navigate local pressures in the short-term – from uncertainty and instability, to geopolitical and financial risk – do not determine manufacturing and investment decisions made at the global level, for tomorrow.
This is not the isolated battle of one OEM. All stakeholders across the industry share responsibility for strengthening and protecting our future. Automakers, suppliers, industry partners, and governments must work together to sustain investment, reinforce supply chains, and support the long-term success of Canadian auto manufacturing.
To remain competitive with other North American plants, Canada needs practical, made-in-Canada solutions to these complex challenges.
At Honda, we have a philosophy called “The Honda Way”, which reflects Honda’s commitment to continuous improvement, innovation, and challenging conventions to deliver high-quality products and value to society.
And we believe that following the “Honda Way” during one of the most significant industry transitions in Canadian history is more important than ever to solidify our future, today.
And that’s exactly why this moment feels different, and why I’d like to share my perspective.
Honda is Canada’s second-largest automaker by production volume. We support a vast supplier network and generate billions in economic activity across this country every year. And together with Toyota, we built more than 75% of the vehicles manufactured in Canada in 2025.
This isn’t a fragile industry. It’s a highly sophisticated, highly integrated industry within North America and one of Canada’s most important economic engines.
We’re managing a once-in-a-generation shift toward electrification – while at the same time navigating geopolitical tensions and trade pressures that are actively reshaping the stable and predictable North American manufacturing system we’ve operated within for decades. Not to mention new challenges from new market entrants.
And all of that is happening as policy decisions here at home are actively making Canada less competitive at exactly the moment we need to be strengthening our position.
Too often, policy decisions are being developed in silos. Industrial policy isn’t aligned with environmental policy, and environmental policy isn’t aligned with auto, nor trade policy. And the full impact on manufacturing competitiveness isn’t always being considered together.
The result? Well‑intended policies that, when combined, start working against each other and against the very long-tenured manufacturers, investors, and employers they’re meant to support.
This industry doesn’t operate in silos and policy can’t either.
If we want to get this generational transition right, government needs to look at the sector holistically – understanding how trade, investment, regulation, and consumer realities all connect – and making sure decisions in one ministry don’t undermine the positive outcomes in another.
This is a moment of transformation.
When that alignment breaks down, the consequences aren’t theoretical, they’re immediate.
Last month, Honda announced the difficult decision to indefinitely suspend our planned Canadian EV value chain investment. Just to be clear – this is not a cancellation, and it does not change our commitment to manufacturing in Alliston, nor does it affect our current levels of employment or production.
But it is a reflection of the world in which we’re operating. When trade uncertainty is looming, regulations are evolving, and government policies are misaligned to consumer demand, it becomes increasingly difficult to move forward with capital-intensive, long-term investments of this scale. Canada loses its competitive advantage.
These are multi-billion-dollar decisions, made within a global context. And when the risk profile becomes too unpredictable, global companies are forced to pause, reassess, and ensure those investments are being made in the right place, at the right time, under the right conditions.
It’s clear we’re also in a moment of consequence.
What we’re facing is more than change. It is a direct test of both Honda’s footprint in Canada and the long-term future of Canadian auto manufacturing.
So where do we need to focus? From our perspective, there are three areas that will determine whether Canada remains competitive for future generations.
First. CUSMA negotiations.
U.S. tariff exposure and trade uncertainty increase the risks associated with Canadian vehicle production allocation. Even with mitigation measures in place, global headquarters must now factor these risks into long-term decisions regarding the future of vehicle programs.
This is especially significant for our Canadian operations, given our reliance on U.S. exports. At Honda Canada, 76% of vehicles built in our Alliston facility are shipped to the U.S. and are obviously highly sensitive to cross-border trade dynamics.
Two of Honda’s most popular vehicles, and two of Canada’s best-selling models, the Civic and CR-V, are built in Alliston, Ontario. But they are also built in the U.S. Tariffs are a cost burden that erode the cost competitiveness that free trade supports. The integrated North American manufacturing system has been at the core of Canada’s auto sector for decades and has worked well for everyone on both sides of the border.
But if Canadian products are to remain competitive, we need to restore clarity and maintain stable, predictable access to the U.S. market. The U.S. has always been our best ally. And we want it to continue to be our best trading partner. Without that framework, the economic case for large-scale automotive manufacturing in Canada becomes far more difficult to justify and sustain.
Ensuring the strength and renewal of CUSMA is critical for Honda Canada and the long-term viability and competitiveness of the entire sector.
But trade is only part of the story.
Second. New entrants into Canada.
Canadian auto makers face rising competition from low-cost, state-subsidized, non-market-oriented producers.
The concern is that large-scale imports, along with minimal assembly or knock-down operations, could create very real and obvious market imbalances.
This business model has made headlines and attracted attention. Why? Because it often involves limited investment, fewer jobs, and weak supply chain development. And with little commitment to domestic manufacturing, it’s a business model that risks displacing much more of Canada’s manufacturing footprint than it builds.
Honda has spent more than four decades building a deeply rooted manufacturing presence in Canada. We’ve invested billions, supported thousands of high-quality jobs, and anchored a broad domestic supply chain.
We were the first Japanese automaker to build cars in Canada under our “build where we sell” philosophy. But we didn’t arrive on Canadian shores with kits from Japan, assembled by Japanese workers, using Japanese parts.
In contrast, Honda very quickly integrated itself into the fabric of Canada. We employed Canadians, we bought parts from Canadian parts suppliers, and we gave back to the communities where we operated, becoming a company Canadians wanted to exist.
That’s why strong policy guardrails, similar to those emerging in Europe, are urgently needed to prevent the long-term erosion of Canada’s industrial base.
It’s hard to square that level of long-standing commitment with policies that favour new competitors operating under very different cost structures, backed by state subsidies and weaker regulations, with little to no intention of becoming part of Canada. In many cases, new entrants are only entering our market for access to our consumers, with no intention to build long-term value for Canada.
Taken together, these pressures create a significant competitive challenge. As new entrants expand, Canada must ensure its policies do not reward business models that deliver less value than they create. And they must guarantee tangible economic contribution to Canada.
Finally, and critically, it brings us to regulation and policy…
Canada’s proposed aggressive GHG regulation framework, layered on top of mismatched provincial ZEV mandates in Quebec and BC, introduce additional, and unnecessary, compliance requirements that cannot be met with the vehicles we build in Canada.
We recognize the government’s efforts to refine the Electric Vehicle Availability Standard and provide greater clarity on the transition to electrified transportation. But the result is another policy distortion with major consequences for Canadian auto manufacturing.
Honda is a highly deliberate company, and we do not make decisions hastily. Our choice to use Canadian production capacity for hybrid models is a strategic one.
Hybrids require no charging infrastructure, cost less than EVs, perform reliably in Canadian winter conditions, and provide approximately 25 to 30 per cent emissions reduction compared to similar gasoline models.
Hybrids represent one of the clearest pathways for households to reduce transportation emissions today. They are widely considered as the realistic bridge between ICE vehicles and full EVs, are built in Canada by multiple automakers, and most importantly, demand for hybrids continue to grow in our market.
Hybrids represent an important step in achieving longer-term goals related to vehicle electrification and reducing our carbon footprint, yet they are not currently being recognized by government policies, both federally and provincially.
That means under the current structure, Canadian car manufacturers may have to purchase compliance credits from companies that build no vehicles in Canada, significantly disadvantaging those OEMs investing in Canadian manufacturing.
Honda’s fleet has always been one of the most fuel efficient in Canada, yet we alone could face hundreds of millions of dollars in annual compliance costs, paid to companies with little or no presence in Canada.
This outcome is difficult to justify economically, environmentally, or politically, when 60% of the Civic and CR-V vehicles we sell in Canada are hybrids built in Alliston.
When regulatory costs are layered onto broader trade risks, the combined impact becomes impossible to absorb within the economic framework governing global automotive investment decisions.
And this is where it all comes together.
To revisit something I mentioned earlier, auto production allocation is earned. Companies don’t automatically keep building vehicles in the same country just because it’s always been that way.
Instead, teams in global headquarters assess factors such as future costs, regulatory risk, labour stability, logistics, trade and policy certainty. These are capital allocation decisions based on comparisons of long-term returns across billions of dollars in investment.
If Canada becomes more expensive or more complicated, or less competitive, we stand to lose future production allocation to another more favourable plant.
This loss rarely happens all at once. It unfolds gradually, as allocation decisions are continually being evaluated. But the impact is severe. Production plans shift, plant retooling is deferred, and new products are transferred elsewhere. Over time, plant viability and the broader supplier network begin to weaken. Jobs are relocated or disappear entirely, along with the economic benefits to the supply chain and the people and communities that support them. This is the reality.
And if we agree the stakes are this high, the question becomes ‘what do we do about it?’
It’s important that Canada remains a competitive country for advanced automotive manufacturing. This is critical if facilities like Honda’s Alliston plant are to continue securing high-volume production in the years ahead.
Policy alignment during this period will play an important role in determining whether future generations of Honda vehicles continue to be built here.
Designing policies that incentivize and support domestic production and are tied directly to full-scale automotive manufacturing, could be part of a series of measures, especially while tariffs remain a factor.
We also need to remove internal trade barriers and costs that are tantamount to taxes, such as ZEV mandates, which penalize those who manufacture vehicles in Canada. Surely environmental policy should align with industrial policy that supports vehicles already being made here at home.
We also need to embrace all-new levels of collaboration. We took an important step in that direction in mid-April by forming the Pacific Manufacturing Association of Canada.
Its purpose is simple; to bring together Honda and Toyota, two of the largest auto manufacturers in Canada. As an association, we aim to help shape practical, coordinated policies and engage more directly with federal and provincial governments to strengthen Canada’s long-term automotive manufacturing competitiveness.
In the geopolitical situation we’re currently in, alignment between industry and government isn’t optional; it’s absolutely essential.
At the end of the day, if you want to understand where this industry is really going, don’t simply listen to the loudest voices – rather look to where vehicles are actually being built and where Canadians are actually being employed.
Manufacturing is a key economic driver of our economy. Not simply auto sales.
While the status quo no longer exists and the conditions in which we operate are changing rapidly, Honda’s guiding principles – the way we conduct business and our sustained commitment to Canada and our associates – has never wavered.
We are the same company that has stood with Canada for 40 years. We came here to put down manufacturing roots. We have sustained operations and avoided manufacturing layoffs throughout those four decades. And we remain committed to the long-term growth and prosperity of Canada’s automotive industry.
I’d like to leave you with this.
Canada is at a crossroads and we are past the point of talking about doing. We need to take action now.
The decisions made in the next few months or years will determine whether this country remains competitive and a global leader in automotive manufacturing, or becomes a market into which that others simply sell. We’ve already seen this scenario played out in other regions of the world – it is not a scare tactic, rather a potential reality.
If we’re serious about getting this right, we need policies that provide Canadian automakers clear, stable and predictable trade access to the U.S. market. We need strong policy guardrails that will guarantee new market entrants realize tangible benefits for Canadians and our economy.
And we need a unified, national realistic emission framework that is an honest reflection of consumer demand today, while recognizing the value of hybrids as the bridge to electrification for tomorrow.
No one said it would be easy. We will most certainly be faced with ongoing challenges. But if each of us respects our joint responsibility to the task at hand and are implored to work collaboratively, there is a path forward. There are uniquely Canadian solutions available that provide clarity, stability and maintain competitiveness.
That is how we protect manufacturing the vehicles Canadians want in Canada.
That is how we keep investing here in our country, in our communities, in our products and in our associates.
And that is how we deliver meaningful progress without losing the industry that makes it all possible.
This fall, we look forward to celebrating 40 years of manufacturing vehicles in Canada, and building towards the next 40 years here at home.
Thank you for your time today. And thank you to the APMA and Flavio for creating the opportunity for today’s important discussion.