The federal government is contemplating the reintroduction of consumer incentives for electric vehicles and plug-in hybrids as it finalizes its national automotive strategy, according to sources familiar with the plans. The decision on these incentives, similar to a previously halted rebate program, is still pending.
Transport Minister Steven MacKinnon mentioned that more information on the potential return of EV incentives would be forthcoming. The previous incentive program, iZEV, which provided up to $5,000 towards EV purchases, was suspended over a year ago due to high demand depleting its funds.
Despite Environment Minister Julie Dabrusin hinting at a renewed consumer rebate program last year, the recent budget did not mention EV rebates or explicitly allocate funds for the program. A senior Canadian official indicated that the forthcoming auto strategy in February would outline the government’s stance on the paused EV sales mandate, EV infrastructure, and investments from countries like South Korea, Germany, and China.
During Industry Minister Mélanie Joly’s comments before the cabinet meeting, no details were provided on how the cabinet plans to handle incentives or Canada’s EV mandate. The pressure on Prime Minister Mark Carney to reconsider the incremental sales targets requiring a significant percentage of new cars to be electric by 2030 and completely electric by 2035 is growing.
The EV sales mandate aimed to ensure a variety of zero-emission vehicles for consumers. Carney recently paused the 2026 targets for a 60-day review, citing challenges faced by the Canadian auto sector, including dealing with U.S. President Donald Trump’s tariffs. Industry voices, like Brian Kingston, argue that achieving the all-electric vehicle target within the next decade is unattainable without increased government support.
In a move parallel to the European Union’s decision to drop its plan of banning new combustion-engine cars by 2035, industry sources revealed that the Canadian government engaged with stakeholders to enhance regulations on greenhouse gas emissions from passenger vehicles and light trucks. These regulations aim to control the pollution levels from vehicles and offer automakers various compliance options, such as improving engine efficiency, promoting EV sales, or purchasing credits from high performers.
The government is also exploring partnerships to expand the charging station network to address concerns of inadequate charging infrastructure hindering EV adoption. Potential collaborations and funding through programs like the Zero Emission Vehicle Infrastructure Program are being considered to accelerate the construction of charging stations across Canada.
