The national automotive strategy of the federal government is set to be unveiled on Thursday, with plans to replace Canada’s electric vehicle mandate with a new framework of fuel efficiency standards and credits, according to sources familiar with the matter. Prime Minister Mark Carney has faced pressure from various stakeholders to eliminate the requirements for electric vehicle sales targets by 2030 and 2035, citing challenges posed by U.S. tariffs.
The government’s decision aligns with consultations with industry experts and stakeholders to enhance Canada’s regulations on greenhouse gas emissions from passenger vehicles and light trucks. The forthcoming system will allow manufacturers to earn credits for producing electric vehicles, akin to the European Union’s recent shift towards fuel efficiency standards over sales targets.
While details on the implementation timeline and emissions impact remain unclear, former environment minister Steven Guilbeault emphasized the importance of maintaining a mandate for electric vehicles due to its significant environmental and health benefits. Additionally, sources indicate the reintroduction of consumer incentives for purchasing electric vehicles, including rebates of up to $5,000 for vehicles valued at $50,000 or less, along with investments in expanding EV charging infrastructure nationwide.
Industry and policy experts have expressed mixed reactions to the impending announcement, with concerns about the implications for Canadian automakers amidst ongoing challenges such as tariffs. Notably, stakeholders are eager to see if the strategy will incentivize automakers to invest and operate in Canada, providing relief from trade pressures.
Cabinet ministers have hinted at the imminent release of the auto strategy to support the automotive industry in light of external trade pressures. The evolving policies under Prime Minister Carney’s administration reflect a departure from previous environmental initiatives, indicating a shift in priorities towards fostering a competitive and sustainable automotive sector.