The national automotive strategy by the federal government is set to be revealed on Thursday, with plans to replace Canada’s electric vehicle mandate with a new framework of fuel efficiency standards and credits, as per information obtained by CBC News sources. Ottawa is also expected to reintroduce popular electric vehicle incentives for buyers. Funding will be allocated to expand the network of EV charging stations across the country to support consumers, a source disclosed.
Prime Minister Mark Carney has faced pressure from various sectors, provinces, and the Conservatives to eliminate the existing sales targets necessitating 60% of all new vehicles to be electric by 2030 and 100% by 2035. In September, Carney paused the 2026 targets and initiated a 60-day review of the EV mandate due to challenges in the Canadian auto industry caused by U.S. tariffs imposed by President Donald Trump.
The new system to replace the EV mandate is expected to allow manufacturers to earn credits by producing electric vehicles while enabling the transfer of credits earned under the previous mandate. Industry insiders indicate that the government is likely to do away with the EV mandate after consulting stakeholders on enhancing regulations for greenhouse gas emissions from passenger vehicles and light trucks.
This shift mirrors the European Union’s decision last year to abandon its sales targets in favor of fuel efficiency standards. The timeline for implementing the new system in Canada and its effectiveness in reducing emissions compared to a sales mandate remain uncertain.
Meanwhile, it is anticipated that incentives for purchasing EVs will be reinstated, following the suspension of Canada’s zero-emissions vehicle incentive program, iZEV, due to high demand exceeding available funds. The previous program provided up to $5,000 toward the purchase of an electric vehicle. Cabinet ministers have been hinting at the imminent release of the auto strategy, emphasizing the impact of U.S. tariffs on Canadian autoworkers.
Government officials have expressed continued commitment to electrification, with Minister Mélanie Joly highlighting the importance of supporting autoworkers amidst trade challenges. Transport Minister Steven Mackinnon teased forthcoming announcements on purchase incentives, while Finance Minister François-Phillippe Champagne reiterated the government’s focus on electrification.
Former Environment Minister Steven Guilbeault, who resigned over disagreements related to energy policies, supports the reintroduction of EV incentives, emphasizing their role in promoting electric vehicle adoption. Guilbeault stressed the importance of maintaining the EV mandate for environmental and health benefits, citing the need to address air pollution and climate change.
Despite speculation, Carney did not address queries about scrapping the EV mandate during a recent caucus meeting.
