Canada expected to scrap contentious EV mandates

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OTTAWA — Prime Minister Mark Carney is expected to scrap Canada’s controversial EV mandates Thursday.

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During a tour of a Toronto-area auto parts manufacturing plant, Carney is expected to put the final nail in the coffin of Canada’s contentious zero-emission electric vehicle mandates, which would have essentially outlawed internal combustion engines in new vehicles.

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Beginning in the 2026 model year, car manufacturers in Canada would have been required to ensure 20% of new car sales be zero-emission under the Justin Trudeau-era project — a benchmark that was supposed to reach 100% by 2035.

Plug-in hybrid cars, which make use of gasoline engines, would have been outlawed alongside conventional gasoline and diesel powered passenger vehicles.

Manufacturers who exceed that quota would be required to pay a $20,000 penalty for each vehicle over that limit.

U.S. President Donald Trump scrapped his country’s EV mandates soon after entering office.

Auto industry called for mandate end

With Canada’s beleaguered auto industry left in limbo after Carney took office, the new PM put the brakes on the program in the fall — pausing the mandates until a better plan could be developed.

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“To add flexibility for the automotive sector, we will remove the 2026 Electric Vehicle Availability Standard, which specifies the share of new vehicle sales that must be electric next year,” Carney said during a Sept. 5 press conference in Mississauga.

“This will provide immediate financial relief to automakers at a time of increased pressure their competitiveness.”

That announcement launched a 60-day review of Canada’s proposed EV mandates, a move widely praised by Canada’s auto industry, who have seen public interest in EVs fall, and many automakers curtailing or even ending ambitious EV vehicle projects.

“The EV mandate imposes unsustainable costs on auto manufacturers, putting at risk Canadian jobs and investment in this critical sector of our economy,” the Canadian Vehicle Manufacturers Association said in a statement at the time.

“A full repeal of the regulation is the most effective way to provide immediate relief to the industry and keep it competitive.”

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New standards to be announced

Media reports suggest the widely unpopular mandate will instead be replaced with a new slate of fuel efficiency standards, CBC News reported Thursday morning.

Canada’s EV mandates were met with even more skepticism after the proposed quota system was revealed  — which grants credits to automakers who exceed minimum EV manufacturing quotas.

Automakers who don’t meet mandated minimum sales targets for emission-free vehicles must either pay a $20,000 penalty per vehicle or purchase credits from carmakers who have a surplus.

That policy would put U.S. automaker Tesla — which makes nothing but electric cars — in a position to make billions selling surplus credits to Canadian automakers unable to meet the government’s quotas.

Tesla’s filings show a little over US$1.03 billion ($1.42 billion) in revenue in “automotive regulatory credits” in the first two quarters of 2025.

Carney is expected to hold a press conference Thursday morning.

More to come . . .

bpassifiume@postmedia.com
X: @bryanpassifiume

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