Prime Minister Mark Carney is scrapping Canada’s electric vehicle mandate, which aimed to have all new car sales as electric within ten years, thus abandoning another environmental policy established during the Trudeau era. Carney is now introducing more stringent greenhouse gas emission standards for vehicle models between 2027 and 2032 to incentivize automakers to produce a greater number of zero-emission vehicles.
During a news conference at an auto parts manufacturer in the Greater Toronto Area, Carney stated, “Canada is charting a new, more ambitious course to reduce automobile emissions.” He emphasized that they are doubling down on GHG emissions standards while allowing the industry flexibility in achieving these goals through various means such as plug-in hybrids, electric vehicles (EVs), and more efficient internal-combustion engine vehicles.
The government has revealed its new national automotive strategy, which aims to safeguard Canada’s auto sector and jobs amid concerns about U.S. President Donald Trump’s push to relocate vehicle production southwards. Additionally, Ottawa is striving to kickstart the country’s battery-powered vehicle industry.
Carney envisions that his new emissions system will result in 75% of new cars sold in Canada being electric by 2035, although this target is less ambitious than the previous mandate being scrapped. While precise figures on the reduction of carbon pollution are not yet available, Carney mentioned that it was calculated based on “grams per mile.”
In a bid to encourage the adoption of electric vehicles, Carney announced a new $2.3 billion program offering incentives of up to $5,000 for EVs and up to $2,500 for plug-in hybrids to consumers and businesses. To qualify for these rebates, plug-in vehicles must be priced under $50,000 and originate from countries with which Canada has free trade agreements, excluding Chinese-made vehicles. The rebates will decrease gradually starting next year until the program’s planned conclusion after 2030.
Furthermore, the government plans to collaborate with partners to expand the network of EV charging stations across Canada. Carney emphasized the need for a $1.5 billion fund to address concerns about reliable charging infrastructure, especially in rural and northern communities. An upcoming electricity strategy is also in the works to enhance Canada’s grid capacity and ensure electricity affordability and reliability.
To retain automakers in Canada and mitigate the impact of U.S. tariffs, Ottawa intends to provide more tariff relief to Canadian automakers. Carney highlighted the exploration of a tradeable credit system to reward companies that manufacture and invest in Canada, while those seeking to sell vehicles in Canada without paying tariffs would need to purchase credits.
The federal government’s shift in policies includes the withdrawal of the consumer carbon tax, revising oil and gas emissions commitments, and abandoning the tree-planting promise made during Trudeau’s tenure. While some political figures have welcomed the revised rebates and new auto strategy, others have criticized the government’s approach, expressing concerns about its implications for Canadian workers and the automotive industry.