Production along the Honda CRV production line during a tour of a Honda manufacturing plant in Alliston, Ont., on Apr. 5, 2023.Cole Burston/The Canadian Press
Federal officials are planning to meet this week with Honda HMC-N representatives about the possibility of the Japanese automaker building an electric-vehicle factory in Canada, adding another name to the list of manufacturers Ottawa is courting as part of a multibillion-dollar effort to transform the domestic auto industry ahead of a shift away from fossil fuels.
The meeting has not been publicly announced, but a senior government official told The Globe and Mail on Monday that it will take place this week, and that several federal departments will participate. The official said there had already been a meeting in December between federal representatives and Canadian and international personnel from Honda.
The Globe is not identifying the official, because they were not authorized to comment publicly on the discussions.
Japanese news group Nikkei reported on Sunday that spending on the potential electric-vehicle plant could reach $18.5-billion, and that the facility could also produce vehicle batteries.
If Honda’s investment is near that reported figure, it would be by far the biggest by an automaker in Canadian electric-vehicle production to date, dwarfing the roughly $7-billion Volkswagen Group battery factory coming to St. Thomas, Ont., and the roughly $5-billion battery plant being built by Stellantis NV STLA-N and LG Energy Solution in Windsor, Ont.
The Honda facility would be a cornerstone of the company’s effort to play catch-up in the race to serve the growing market for fully electric vehicles. It previously built its strategy around hybrid electric vehicles, for which its assembly plant in Alliston, Ont., is currently being retooled.
And it may represent the latest test of Canada’s willingness to match massive subsidies being offered by the United States, as Ottawa seeks to build a domestic electric-vehicle supply chain in advance of an expected global move away from gas-powered cars and trucks. Although the federal and Ontario governments have committed up to $15-billion in production subsidies for the Stellantis-LG plant, and up to $13.2-billion for the Volkswagen plant, Ottawa has since been non-committal about extending such deals to other automakers.
Honda has been meeting regularly with federal officials over the past few months, according to the federal lobbying registry. But the registry does not clearly say what topics were discussed.
The registry shows a Nov. 27 meeting with Natural Resources Canada officials, a Nov. 15 meeting with a senior Innovation Department official and a Nov. 2 meeting with a senior Transport Canada official. The month before, Honda met with policy advisers in the office of Deputy Prime Minister and Finance Minister Chrystia Freeland.The company’s representatives also met with Environment Minister Steven Guilbeault’s chief of staff, Jamie Kippen.
Francesco Sorbara, an MP who chairs the Liberal auto caucus, and whose Ontario riding of Vaughan-Woodbridge is just south of the existing Honda plant in Alliston, said opening a Canadian electric-vehicle plant would make sense for the automaker.
“It’s only natural, with Honda being in Canada for 50 years,” he said. “With its operations in Alliston, our work force, the trade agreements bolstering our case and this transition to a clean energy supply, Canada and Ontario are uniquely positioned for Honda.”
Nikkei reported that Honda is looking at several potential sites, including one next to its existing factory in Alliston. The automaker expects to decide by the end of 2024, with the new facility to go into operation as early as 2028, the Japanese outlet said.
Vanessa De Matteis, a spokesperson for Ontario’s Economic Development Minister, Vic Fedeli, would not confirm any details related to the potential electric-vehicle plant, but said the province continues to seek global investments.
John Bordignon, a spokesperson for Honda Canada, said in a statement over the weekend that the automaker “is considering a number of initiatives as we move into the electrified era.” He said Honda is currently focused on what he called the automaker’s “EV Hub,” in Ohio, where it will begin production of electric vehicles and batteries in late 2025.
Honda’s Ohio investment was announced at about US$4.4-billion, suggesting the project under consideration in Ontario could be significantly larger.
While Honda appears to be considering new facilities for manufacturing both vehicles and batteries in Canada, it’s unclear whether the latter would be in partnership with another company. In Ohio, the company has partnered with LG, the South Korean battery maker. LG is also building the Windsor factory with Stellantis.
It’s also unclear what level of subsidy Honda might be seeking. Automakers have to date demanded that Canadian governments match a battery production tax credit offered in the United States. Canada has done so for the Volkswagen and Stellantis-LG plants, and also in the case of Swedish battery maker Northvolt AB’s planned facility in Quebec.
But U.S. grants for new or retooled vehicle assembly plants, with which Canada might also be competing in this case, are less predictable.
Brendan Sweeney, the managing director of the Trillium Network for Advanced Manufacturing, said that the complexity of the investments that Honda appears to be pursuing in Ontario could make them challenging for governments to back.
“The question is about how to best structure an incentive package for an investment that includes batteries, a new assembly plant and all the requisite machinery, and potential upgrades to existing facilities,” Mr. Sweeney said. “The ability to take on such a complex investment would represent a monumental achievement.”
Honda is not the only company currently testing Canadian willingness to continue offering billions of public dollars to back electric-vehicle investments. Toyota Canada, another Japanese auto giant relatively late to the electric transition, has been seeking government backing for retooling its existing plants.
In addition to keeping pace with the U.S., Ottawa is under pressure to support such investments to demonstrate that new regulations requiring a growing share of vehicles sold in Canada to be electric will benefit domestic industry.
In December, the government announced the latest version of its proposal to end sales of new gasoline-powered or diesel-powered passenger vehicles by 2035.
MONTREAL – Travel company Transat AT Inc. reported a loss in its latest quarter compared with a profit a year earlier as its revenue edged lower.
The parent company of Air Transat says it lost $39.9 million or $1.03 per diluted share in its quarter ended July 31.
The result compared with a profit of $57.3 million or $1.49 per diluted share a year earlier.
Revenue in what was the company’s third quarter totalled $736.2 million, down from $746.3 million in the same quarter last year.
On an adjusted basis, Transat says it lost $1.10 per share in its latest quarter compared with an adjusted profit of $1.10 per share a year earlier.
Transat chief executive Annick Guérard says demand for leisure travel remains healthy, as evidenced by higher traffic, but consumers are increasingly price conscious given the current economic uncertainty.
This report by The Canadian Press was first published Sept. 12, 2024.
Dollarama Inc.’s food aisles may have expanded far beyond sweet treats or piles of gum by the checkout counter in recent years, but its chief executive maintains his company is “not in the grocery business,” even if it’s keeping an eye on the sector.
“It’s just one small part of our store,” Neil Rossy told analysts on a Wednesday call, where he was questioned about the company’s food merchandise and rivals playing in the same space.
“We will keep an eye on all retailers — like all retailers keep an eye on us — to make sure that we’re competitive and we understand what’s out there.”
Over the last decade and as consumers have more recently sought deals, Dollarama’s food merchandise has expanded to include bread and pantry staples like cereal, rice and pasta sold at prices on par or below supermarkets.
However, the competition in the discount segment of the market Dollarama operates in intensified recently when the country’s biggest grocery chain began piloting a new ultra-discount store.
The No Name stores being tested by Loblaw Cos. Ltd. in Windsor, St. Catharines and Brockville, Ont., are billed as 20 per cent cheaper than discount retail competitors including No Frills. The grocery giant is able to offer such cost savings by relying on a smaller store footprint, fewer chilled products and a hearty range of No Name merchandise.
Though Rossy brushed off notions that his company is a supermarket challenger, grocers aren’t off his radar.
“All retailers in Canada are realistic about the fact that everyone is everyone’s competition on any given item or category,” he said.
Rossy declined to reveal how much of the chain’s sales would overlap with Loblaw or the food category, arguing the vast variety of items Dollarama sells is its strength rather than its grocery products alone.
“What makes Dollarama Dollarama is a very wide assortment of different departments that somewhat represent the old five-and-dime local convenience store,” he said.
The breadth of Dollarama’s offerings helped carry the company to a second-quarter profit of $285.9 million, up from $245.8 million in the same quarter last year as its sales rose 7.4 per cent.
The retailer said Wednesday the profit amounted to $1.02 per diluted share for the 13-week period ended July 28, up from 86 cents per diluted share a year earlier.
The period the quarter covers includes the start of summer, when Rossy said the weather was “terrible.”
“The weather got slightly better towards the end of the summer and our sales certainly increased, but not enough to make up for the season’s horrible start,” he said.
Sales totalled $1.56 billion for the quarter, up from $1.46 billion in the same quarter last year.
Comparable store sales, a key metric for retailers, increased 4.7 per cent, while the average transaction was down2.2 per cent and traffic was up seven per cent, RBC analyst Irene Nattel pointed out.
She told investors in a note that the numbers reflect “solid demand as cautious consumers focus on core consumables and everyday essentials.”
Analysts have attributed such behaviour to interest rates that have been slow to drop and high prices of key consumer goods, which are weighing on household budgets.
To cope, many Canadians have spent more time seeking deals, trading down to more affordable brands and forgoing small luxuries they would treat themselves to in better economic times.
“When people feel squeezed, they tend to shy away from discretionary, focus on the basics,” Rossy said. “When people are feeling good about their wallet, they tend to be more lax about the basics and more willing to spend on discretionary.”
The current economic situation has drawn in not just the average Canadian looking to save a buck or two, but also wealthier consumers.
“When the entire economy is feeling slightly squeezed, we get more consumers who might not have to or want to shop at a Dollarama generally or who enjoy shopping at a Dollarama but have the luxury of not having to worry about the price in some other store that they happen to be standing in that has those goods,” Rossy said.
“Well, when times are tougher, they’ll consider the extra five minutes to go to the store next door.”
This report by The Canadian Press was first published Sept. 11, 2024.
TORONTO – The U.S. Consumer Financial Protection Bureau has ordered TD Bank Group to pay US$28 million for repeatedly sharing inaccurate, negative information about its customers to consumer reporting companies.
The agency says TD has to pay US$7.76 million in total to tens of thousands of victims of its illegal actions, along with a US$20 million civil penalty.
It says TD shared information that contained systemic errors about credit card and bank deposit accounts to consumer reporting companies, which can include credit reports as well as screening reports for tenants and employees and other background checks.
CFPB director Rohit Chopra says in a statement that TD threatened the consumer reports of customers with fraudulent information then “barely lifted a finger to fix it,” and that regulators will need to “focus major attention” on TD Bank to change its course.
TD says in a statement it self-identified these issues and proactively worked to improve its practices, and that it is committed to delivering on its responsibilities to its customers.
The bank also faces scrutiny in the U.S. over its anti-money laundering program where it expects to pay more than US$3 billion in monetary penalties to resolve.
This report by The Canadian Press was first published Sept. 11, 2024.
