Canadian Beat: Carney starting 60-day review of EV policy

Canadian Prime Minister Mark Carney unveiled the first wave of major nation-building projects today. It’s a key part of his government’s plan to bolster and insulate the Canadian economy amid the ongoing trade war with Washington. Recently, Carney also announced billions of dollars in aid for sectors impacted by the tariffs launched by President Donald Trump. He also said his government would follow a buy-Canadian policy. Part of Carney’s plan is to hit the pause button on his predecessor’s mandate for electric vehicles.
 
That strategy includes a 60-day review of the EV policy announced by the government of former Prime Minister Justin Trudeau, a cornerstone of its environmental policy. Mark Carney said his government will also add flexibility to the auto sector.
 
“We will remove the 2026 electric vehicle availability standard, which specifies the share of new vehicle sales that must be electric next year.  This will provide immediate financial relief to auto makers at a time of increased pressure on their competitiveness,” Carney said. “The government will begin, immediately, a 60-day review of the EV standards to identify future flexibilities and ways to reduce cost.”
 
Under the Trudeau government’s EV mandate for 2026, 20% of all cars sold in Canada had to be electric. By 2035, that mandate was to be 100% zero-emission vehicle sales. The announcement is what Canada’s auto manufacturers have been pushing for. David Adams is the president of Global Automakers of Canada. He said the issue is that the market is quite different from what was anticipated when the mandates were first put in place.
 
“I think it does make sense that we would take the opportunity to recalibrate that mandate, if we’re going to have one, so that it does reflect what consumers actually want to buy as opposed to targets that have been arbitrarily set by the federal government,” Adams said.
 
The change in consumer attitudes is reflected in the numbers. According to Statistics Canada, year-over-year sales of EVs in Canada fell by more than 39 % and hybrids by 2.2%. Some in the industry wanted the Carney government to go even further than just a pause.  Brian Kingston is the CEO of the Canadian Vehicle Manufacturers Association.
 
“This regulation has to be fully repealed,” Kingston said. “It’s just simply not realistic. The targets can’t be achieved.  And while the pause is helpful, we’re currently sitting at 9.7% for 2025; getting to 20% in 2026 would require a doubling of sales. That is just not going to happen, and then the targets become even more unrealistic as you look out to 2030 and 2035. The industry is under huge pressure right now because of tariffs. We must get rid of this.”
 
Flavio Volpe is with the Automotive Parts Manufacturers Association.  He said this is not the beginning of the end of electric vehicles, they’re here to stay.
 
“The supply sector, which is all the Canadian companies, is absolutely committed to electrification because we see our strength here in five or ten years. But we can’t dictate whether the Detroit Three or the two Japanese companies or the German company that’s going to make batteries here, are still going to be here through this crisis with the White House,” Volpe said.
 
Meanwhile, in a twist, a new survey suggests that Canadians either support or somewhat support lifting the one-hundred percent tax on all Chinese-made electric vehicles, an issue likely to come up in Prime Minister Carney’s 60-day review.