At a time when several major automakers are shrinking or restructuring their Canadian operations, Toyota is taking a different approach. The Japanese manufacturer is preparing to build an updated Lexus NX in Ontario this December, reinforcing its commitment to a manufacturing network that produced more than 537,000 vehicles last year. Approximately 85% of those vehicles are destined for export, primarily to the United States, making Toyota both a cornerstone of Canada’s automotive industry and particularly exposed to growing trade tensions. With General Motors reducing shifts, Stellantis reconsidering factory operations, and Ford changing its Canadian production strategy, Toyota’s decision to keep investing carries significant implications. For thousands of Ontario workers and the businesses supporting them, the company’s commitment offers an important measure of stability during an increasingly uncertain period for North American automotive manufacturing.
Toyota Reaffirms Its Long-Term Commitment to Manufacturing in Canada
Toyota Motor Corporation is maintaining its Canadian manufacturing operations despite mounting pressure from U.S. automotive tariffs and changing trade policies. In an interview reported by Bloomberg on October 16, 2026, Scott MacKenzie, director of corporate affairs at Toyota Motor Manufacturing Canada, reaffirmed the company’s intention to continue building vehicles in the country for the long term. MacKenzie said Toyota remains confident in Canada’s manufacturing capabilities and continues investing in its Ontario facilities. The company’s plants are operating at or near full capacity, running two regular shifts alongside scheduled overtime.
That position contrasts with decisions by several Detroit-based automakers to reduce or redirect Canadian production. Toyota’s latest commitment is supported by new vehicle programs rather than statements alone. The company began manufacturing the redesigned Toyota RAV4 in January 2026 and is preparing to introduce the updated 2027 Lexus NX hybrid into production in December. Both models reinforce Ontario’s position within Toyota’s North American production network. However, the commitment does not eliminate the industry’s wider uncertainties. Toyota must still manage tariff-related expenses, future vehicle demand, and changing trade arrangements with the United States. Its current strategy demonstrates confidence in Canadian manufacturing, but maintaining that position will require the company’s Ontario operations to remain globally competitive.
Ontario’s Toyota Plants Produced More Than 537,000 Vehicles in 2025
Toyota Motor Manufacturing Canada’s operations are spread across Cambridge and Woodstock, Ontario, where three production lines build some of the company’s most important vehicles. The Cambridge North facility assembles the Toyota RAV4 and Lexus NX, while Cambridge South produces the Lexus RX luxury SUV. The Woodstock facility also manufactures the RAV4, creating additional capacity for one of Toyota’s most recognizable models. Together, these operations produced 537,518 vehicles in 2025, making Toyota the country’s largest automotive manufacturer by production volume. Honda ranked second with approximately 401,000 vehicles assembled in Canada.
The scale of Toyota’s operations reflects nearly four decades of investment. Manufacturing began in Cambridge in 1988, and the company later expanded into Woodstock, where RAV4 production started in 2008. Today, Toyota employs more than 8,500 people across its Ontario manufacturing operations, with annual capacity exceeding 500,000 vehicles. Toyota has invested more than $12 billion in Canadian manufacturing over the years, including substantial recent spending on new production programs. The factories also support a wider network of parts manufacturers, transportation providers, equipment suppliers, and maintenance contractors. For these businesses, Toyota’s continued commitment represents more than vehicle production. It helps sustain industrial activity across communities that have built their economies around automotive manufacturing.
The Redesigned 2027 Lexus NX Will Be Built in Cambridge Starting in December
Toyota’s decision to manufacture the refreshed 2027 Lexus NX hybrid in Cambridge is one of the clearest demonstrations of its ongoing investment strategy. The updated compact luxury SUV is scheduled to enter Canadian production in December 2026. Lexus officially unveiled the vehicle on September 1, introducing a redesigned hybrid system, improved handling, updated safety technology, and a more advanced interior. All Canadian-market versions will feature electrified powertrains, with conventional hybrid and plug-in hybrid options replacing the previous gasoline-only configurations. A 14-inch touchscreen and Lexus Safety System+ 4.0 are among the major technology upgrades.
There is an important distinction between the models being produced in different countries. Cambridge will manufacture the conventional Lexus NX hybrid, while the plug-in hybrid versions will continue to come from Toyota Motor Kyushu in Japan. The updated plug-in hybrid is expected to offer more than 64 kilometres of electric driving range on selected versions, although official Canadian efficiency ratings remain pending. Continuing NX production in Ontario also builds upon Toyota’s history of manufacturing Lexus vehicles locally. Cambridge began producing the Lexus RX in 2003, becoming the first plant outside Japan to assemble a Lexus. Production of the NX followed in 2022. Maintaining that responsibility for the 2027 model reinforces the facility’s standing within Toyota’s global luxury vehicle operations.
Toyota’s $1.1 Billion RAV4 Investment Is Already Producing Results
Toyota’s manufacturing commitment is also visible in its investment in the sixth-generation RAV4. On January 23, 2026, Toyota Motor Manufacturing Canada confirmed that production of the redesigned crossover had begun at its Woodstock facility. Company president Tim Hollander described the assignment as evidence of Toyota’s confidence in its Canadian workforce and manufacturing quality. Toyota reported investing more than $1.1 billion in the new RAV4 program, helping bring its cumulative Canadian manufacturing investment above $12 billion. The redesigned vehicle is available exclusively with an electrified hybrid powertrain, reflecting Toyota’s continuing emphasis on combining gasoline engines with electric propulsion.
The RAV4 is particularly important because of its longstanding role in Canadian manufacturing. Toyota has built more than four million RAV4 vehicles in Ontario since production began in 2009. The latest generation offers three distinct design styles and seven trim grades, providing multiple choices within the compact SUV segment. Keeping this high-volume vehicle in Canada supports the manufacturing equipment, production expertise, and supplier relationships already established around Toyota’s Ontario operations. A new vehicle generation also creates work beyond final assembly, including engineering changes, equipment installation, parts development, and production preparation. For workers, these investments provide a more tangible indication of future activity than corporate commitments alone, although production volumes will still depend on demand across North America.
The 85% Export Figure Exposes Toyota to Serious U.S. Tariff Risks
Toyota’s Canadian manufacturing success depends heavily on international customers, particularly those in the United States. Approximately 85% of the vehicles assembled in Ontario are designated for export, with most shipped south of the border. That arrangement has helped Canadian factories achieve substantial production volumes despite Canada’s smaller domestic vehicle market. However, the same business model is increasingly vulnerable to American trade restrictions. The United States currently maintains a 25% automotive tariff, although qualifying vehicles under the Canada–United States–Mexico Agreement receive an exemption for their U.S.-origin content. The applicable duty therefore depends on a vehicle’s content and customs treatment.
The uncertainty increased in August 2026 when President Donald Trump threatened to raise tariffs on Canadian-made vehicles to 50% beginning January 1, 2027, unless the two countries reached a new trade agreement. That proposed increase is a threat rather than an implemented tariff. For Toyota, higher cross-border duties could reduce profitability or require adjustments to pricing, production, and sourcing decisions. Moving factories would also involve substantial expenses and the loss of established manufacturing expertise. The company’s continued investment suggests it sees enough long-term advantages in Ontario to justify remaining there. Nevertheless, with such a large share of production intended for export, the outcome of Canada–U.S. trade negotiations remains critically important.
General Motors Has Reduced Ontario Production Despite Continued Investment
General Motors provides one of the clearest examples of the difficult decisions facing Canada’s automotive sector. In February 2026, the company reduced production at its Oshawa Assembly plant from three shifts to two, placing approximately 500 employees on layoff, according to GM’s official announcement. Unifor estimated that the broader employment impact, including affected suppliers, was considerably larger. The Oshawa facility continues manufacturing Chevrolet Silverado pickup trucks, including both light-duty and heavy-duty versions. GM has also committed additional investment toward future truck production, demonstrating that reducing manufacturing activity does not necessarily mean abandoning a facility entirely.
The situation at GM’s CAMI Assembly plant in Ingersoll has been more difficult. In October 2025, General Motors confirmed that it was ending production of its BrightDrop electric delivery vans following slower-than-expected demand. Production had already been suspended in May of that year, leaving the facility without an announced replacement vehicle program. GM said it would evaluate future opportunities for the plant. These developments contrast with Toyota’s approach of maintaining high production volumes while introducing updated models at established factories. The difference is especially meaningful for workers whose livelihoods depend on stable manufacturing schedules. However, GM has emphasized that it continues to invest in Canadian operations, including Oshawa and its St. Catharines propulsion facility.
Stellantis and Ford Are Reshaping Their Canadian Factory Strategies
Stellantis has also significantly changed its Canadian manufacturing plans. Its Brampton Assembly plant has remained idle since late 2023, after the company began preparing the facility for future vehicle production. Plans to manufacture the next-generation Jeep Compass there were subsequently abandoned in favour of U.S. production. In September 2026, Stellantis signed a memorandum of understanding with Canadian armoured vehicle manufacturer Roshel concerning a potential sale of the Brampton facility. The proposed arrangement could introduce a different form of industrial activity, but it does not constitute a completed sale or guarantee that every former automotive job will return.
Ford has pursued a different kind of restructuring in Oakville. After ending production of the Ford Edge and Lincoln Nautilus, the company abandoned plans to assemble new three-row electric SUVs at the facility and instead committed approximately $2.3 billion to retool it for F-Series Super Duty trucks. Initial pre-production vehicles have already been assembled, including approximately 300 units in September 2026, although full-scale customer production was still being ramped up. Ford’s strategy therefore involves a substantial Canadian reinvestment rather than a straightforward withdrawal. Similarly, Stellantis continues producing vehicles at its Windsor operation. What distinguishes Toyota is its consistency: while competitors have changed major product assignments, production schedules, or investment plans, Toyota has continued upgrading its established Canadian vehicle lineup without a comparable reduction in its manufacturing footprint.
Honda Remains Committed to Ontario but Has Halted Its $15 Billion EV Expansion
Honda provides another revealing comparison because it remains a major Japanese automotive manufacturer in Canada. The company operates vehicle assembly facilities in Alliston, Ontario, where it produces the Honda Civic and CR-V. Its Canadian factories assembled approximately 401,000 vehicles in 2025, making Honda the country’s second-largest manufacturer by production volume behind Toyota. However, Honda has substantially revised its plans for future electric vehicle manufacturing. On May 14, 2026, the company confirmed that its previously postponed Canadian electric vehicle supply-chain investment had been suspended indefinitely.
The original initiative was valued at approximately C$15 billion and included proposed electric vehicle assembly and battery manufacturing investments in Ontario. Honda attributed the suspension to changing market conditions, revised business priorities, and shifting consumer demand. Crucially, the company confirmed that the decision would not affect existing employment or production levels at its Alliston factories. Toyota and Honda are therefore both continuing significant conventional vehicle manufacturing in Canada, but their investment strategies have diverged. Honda has stepped away from a large proposed expansion, while Toyota has proceeded with major upgrades to established hybrid vehicle production. Both manufacturers remain exposed to U.S. trade policy and North American demand, illustrating that even companies with longstanding Canadian operations must regularly reassess their industrial strategies.
Toyota’s Record Sales Are Strengthening Its Case for Canadian Production
Toyota’s strong sales performance provides an important economic foundation for its Ontario manufacturing strategy. In 2025, Toyota Canada reported a record 249,445 Toyota and Lexus vehicles sold, an increase of 4.4% over the previous year. The Toyota RAV4 remained Canada’s best-selling passenger vehicle outside the pickup truck category, with 75,573 sales. Electrified models also became increasingly important, with Toyota and Lexus together selling more than 123,000 hybrid, plug-in hybrid, battery-electric, and other electrified vehicles during the year. These results demonstrate why the company continues prioritizing hybrid crossovers in its Canadian manufacturing operations.
That momentum has extended into 2026. Toyota Canada sold 70,008 vehicles during the third quarter, an 8.3% increase over the corresponding period in 2025. Its electrified vehicle sales reached 40,019 during the quarter, accounting for 65.7% of total Toyota and Lexus sales. By the end of September, the company had already sold 130,369 electrified vehicles, surpassing its full-year 2025 record in only nine months. Canadian-built RAV4 hybrids and Lexus NX models contributed to the company’s sales performance, with both recording particularly strong results in September. Sales figures do not translate directly into factory production because vehicles sold in Canada may be manufactured elsewhere, and most Ontario output is exported. Nevertheless, sustained customer demand strengthens Toyota’s business case for keeping its existing manufacturing network operating at high capacity.
Toyota’s Future in Canada Will Depend on Trade Stability and Long-Term Competitiveness
Toyota’s continued investment is particularly important because Canada’s broader automotive industry remains under pressure. According to the federal government’s 2026 automotive strategy, the sector supports more than 500,000 jobs across manufacturing and related activities, including approximately 125,000 direct automotive manufacturing positions. Canada produced more than 1.2 million passenger vehicles in 2025, with over 90% of Canadian-made vehicles exported to the United States. Ottawa has responded by allocating $3 billion from its Strategic Response Fund and up to $100 million through regional tariff assistance to help automotive businesses modernize, diversify, and protect employment.
The industry is also preparing for increased competition from Chinese manufacturers. Canada’s new trade arrangement allows an initial annual quota of 49,000 Chinese-made electric vehicles to enter at a 6.1% tariff, while Geely has confirmed plans to begin selling vehicles in Canada in 2027. For Toyota, continued success will require maintaining competitive production costs, developing vehicles customers want, and navigating an increasingly complicated trade environment. The company’s existing Canadian factories have important advantages, including experienced employees, established suppliers, and decades of manufacturing expertise. However, those advantages do not guarantee protection from future production adjustments. The new RAV4 and upcoming Lexus NX demonstrate that Toyota is still assigning significant vehicle programs to Ontario. For Canadian workers, that commitment provides a measure of stability at a time when the industry is searching for greater certainty about its future.
