The federal government has announced some relief for automakers in Canada impacted by tariffs, but warned that it is dependent on the automakers continuing to produce vehicles in Canada and carrying out planned investments.
The relief program announced by Finance Minister François-Philippe Champagne on April 15 will allow automakers to import a certain number of U.S.-assembled vehicles into Canada tariff-free. The products need to also comply with the United States-Mexico-Canada Agreement.
Prime Minister Mark Carney announced 25 percent tariffs on vehicles imported from the United States effective on April 3, the same day U.S. auto tariffs of the same percentage kicked in.
However, Ottawa said that the relief granted to Canadian automakers is contingent on their continuing to produce vehicles in Canada and complete planned investments.
“The number of tariff-free vehicles a company is permitted to import will be reduced if there are reductions in Canadian production or investment,” the government said in a statement.
Ottawa will also give Canadian manufacturers temporary relief from the broader retaliatory tariffs Canada has placed on U.S. goods for six months so they can modify their supply chains to reduce reliance on American inputs. This measure will apply to sectors like manufacturing, food and beverage processing, and those that support public health, health care, public safety, and national security objectives.
“Today, we’re giving Canadian companies and entities more time to adjust their supply chains and become less dependent on U.S. suppliers. This will help make our economy stronger and more resilient,” Champagne said.
Earlier in the day, Honda Canada responded to a news report claiming it was planning to shift production from Canada and Mexico to the United States. Honda said in a statement that its Canadian manufacturing facility in Alliston, Ont., will operate at full capacity “for the foreseeable future” and no changes are being considered “at this time.”
The company noted that the Alliston facility was the second-largest auto manufacturer in Canada by volume in 2024. It said that thanks to domestic sales being up 9 percent in the first quarter of 2025, “Canadian production will remain at full capacity.”
In response to the initial news report, Ontario Premier Doug Ford said he had spoken with the president of Honda Canada and confirmed it was not true. “We’re gonna keep Honda here. And I’ll do everything I can do protect the people and their jobs,” he said.
Innovation Minister Anita Anand also said Ottawa was “aware of the unconfirmed reports of future changes” to Honda’s production plan, but the company had informed her that “no such production decisions” have been made and are not currently being considered.
