The feds are resurrecting one electric vehicle sales policy, and sending another to the grave.
What happened: Ottawa unveiled a revamped national automotive strategy that revived EV rebates, but also brought an end to the availability standard enacted in 2023, which had required all new light-duty vehicles sold in Canada to be EVs or plug-in hybrids by 2035.
Instead of the hardline sales mandate, the feds are introducing stricter emissions standards for 2027 to 2032 models, believing this will lead to low-emission cars accounting for 75% of sales by 2035. Some environmental experts aren’t so sure.
Zoom in: The five-year program, which begins February 16, is estimated to cost $2.3 billion and promote the purchase of 840,000 vehicles. In the first year, buyers can get up to $5,000 back on EV purchases and up to $2,500 on purchases of plug-in hybrids under $50,000. The catch: the car must be made in Canada or in a country Canada has a free trade deal with.
This means the oncoming flood of Chinese-made EVs won’t be eligible. Likewise, if trade talks turn catastrophic and CUSMA dies, U.S.-made EVs also wouldn't count.
The strategy has other measures meant to support both the auto industry and EV adoption, including new spending on tariff relief and EV charging infrastructure.
Why it matters: Once again, the Carney government is trying to walk the fine line of rolling back old policies to promote industry — here, taking a load off the auto sector as it continues to grapple with U.S. tariffs — while trying to save some face with regard to climate policy. If the rebates manage to spark slumping EV sales, it would be a win for this playbook.—QH