Toyota's Canadian manufacturing arm will receive nearly $34 million in seed money from Ottawa and Ontario as it builds a new assembly line at its plant in Cambridge, Ontario.

Ottawa will kick in $16.9 million from the Automotive Innovation Fund, while Ontario will match that with an investment from its
Strategic Jobs and Investment Fund.

Toyota will put $125 million toward the new assembly line to increase production of Lexus luxury cars, including a new model with
a hybrid gasoline-electric engine.

The project will lead to the first Lexus hybrid produced outside of Japan.

The initiative, called Project Lexus, is expected to generate about 400 jobs at the Toyota manufacturing plant in Cambridge, in
southwestern Ontario.

Prime Minister Stephen Harper and Ontario's outgoing premier, Dalton McGuinty, were among the politicians on hand to make the
announcement.