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The federal government is expected to unveil a national vehicle strategy on Thursday that includes repealing Canada’s electric vehicle mandate and replacing it with a new system of fuel economy standards and credits, CBC News reports.
Two sources said Ottawa is also expected to reinstate popular electric vehicle incentives for consumers buying electric vehicles.
Officials say funding will also be announced to build more EV charging stations across Canada to help consumers.
Prime Minister Mark Carney is under pressure from the car industry, several states and Conservative Party leaders to scrap a phased sales target for 60% of all new cars to be electric by 2030 and 100% by 2035.
The federal government is due to release its national motoring strategy on Thursday. This includes repealing Canada’s electric vehicle mandate and replacing it with a new system of fuel efficiency standards and credits, CBC News reported. Automotive journalist Greg Lason said the announcement could put pressure on automakers to sell more environmentally friendly cars at lower profit margins.
In September, Governor Carney suspended the 2026 target and announced a 60-day review of the EV mandate, saying Canada’s auto sector was already “well prepared” to respond to President Donald Trump’s tariffs.
Industry sources told CBC News there are signs the government will lift the EV mandate. Stakeholders were consulted on improving Canada’s greenhouse gas emissions regulations for passenger cars and light trucks. These tailpipe emission rules regulate the amount of pollutants that cars and trucks can emit.
The changes would be similar to those made by the European Union last year. announced a proposal to withdraw sales targets Support fuel efficiency standards.
Officials acknowledged that the system, which replaces the EV mandate, also allows manufacturers to earn credits for producing electric vehicles, and that there is a way to carry over credits earned under the old electric vehicle mandate.
It is not clear when the government will introduce the new system or if it will achieve the same emissions reductions as the sales mandate.
The US administration under former President Joe Biden chose to encourage electric vehicle adoption rules through strict tailpipe rules. This rule did not guarantee that consumers would have access to affordable EVs.
The Trump administration has since abandoned those measures.
Expected return on incentives
Officials say some type of incentive program is expected to be reinstated for consumers purchasing EVs.
Canada’s zero-emission vehicle incentive program, known as iZEV, was suspended more than a year ago due to lack of funding due to high demand.
The program offered customers up to $5,000 toward EV purchases.
Ministers this week have hinted at introducing a car strategy.
“This is important because we know that our autoworkers are currently bearing the brunt of America’s unfair and unjust tariffs,” Industry Minister Mélanie Joly said this week.
As part of a new funding strategy announced Friday, the federal government announced plans to suspend electric vehicle mandates and launch a 60-day review of Trudeau-era policies. The Prime Minister said the ongoing trade war was putting increased pressure on the auto industry.
Transport Minister Stephen McKinnon, responding to a question about reinstating the purchase incentive, said: “There will be further announcements on that in due course.”
Finance Minister François-Philippe Champagne said the government’s “north star is still moving towards electrification.”
Former Environment Minister Stephen Guilbeault said on Wednesday that he was open to changes to the EV mandate, depending on its content, but did not want to scrap the mandate completely.
“We need that mission,” Guilbeault said. “It’s essential. It’s very important not only in terms of climate change, but also in terms of air pollution, its impacts, and the health benefits of doing this.”
Guilbeault resigned from the Cabinet in November, citing Carney’s policies. Memorandum of Understanding with the Province of Alberta A new asphalt pipeline is on its way to the B.C. coast. The deal also suspended clean power regulations that Guilbeault helped implement.
Guilbeault said it would be a good idea for the government to reinstate EV incentives. He said he recommended the introduction of such rebates in 2019 as part of an advisory committee.
“We know there is still a price difference between traditional internal combustion engine cars and electric cars, so this will help.” [with] “We will see more adoption of electric vehicles,” he said.
Carney did not respond to a question Wednesday about whether he would repeal the EV mandate as he left the caucus and walked past reporters.