OTTAWA, April 22 (Reuters) - Honda ( HMC ) will build electric

vehicles and their parts in Ontario with financial support from

the Canadian and provincial governments under a plan to be

announced this week, a source with direct knowledge of the deal

said on Monday.

Under the terms of the agreement with Ottawa and Ontario,

Honda ( HMC ) will build batteries, process the cathode materials needed

for the batteries and also assemble electric vehicles.

Details of the government support were not available.

The deal is worth billions of dollars, said the source, who

requested anonymity given the sensitivity of the project. The

finalisation of the agreement, due to be announced on Thursday,

was initially reported by the Globe and Mail newspaper.

Canada has wooed companies involved in all parts of the EV

supply chain to bolster its manufacturing heartland in Ontario

as the world seeks to cut carbon emissions.

Without explaining what was included in the numbers, Ontario

Premier Doug Ford earlier told reporters on Monday the deal was

the largest in Canadian history and would be worth double the

C$7 billion that a planned Volkswagen EV electric

vehicle plant in Ontario is set to cost.

Prime Minister Justin Trudeau last year said that Canada was

looking for more "targeted" investments after the government

gave hefty subsidies to Volkswagen and Stellantis ( STLA )- LG Energy

Solution for their planned battery

gigafactories.

In a federal budget last week, the government introduced a

new investment tax credit giving companies a 10% rebate on the

costs of constructing new buildings used in key segments of the

electric vehicle supply chain.