Amid tariffs and falling sales, is Canada's EV mandate doomed?

Peter Zimonjic · CBC News

· Posted: Jul 06, 2025 4:00 AM EDT | Last Updated: 10 minutes ago

With U.S. tariffs connected steel, aluminum and light-duty vehicles continuing to batter the Canadian automobile industry, the CEOs of Canada's large 3 automakers are asking for a break.

They met with Prime Minister Mark Carney this week to lobby for the elimination of the Liberal government's zero-emission conveyance (ZEV) mandate. Maintaining it, they say, volition cripple their companies and enactment thousands of jobs astatine risk. 

Carney cancelled Canada's integer services taxation past play to support commercialized negotiations going with the U.S. Could the ZEV mandate besides beryllium removed to assistance an car manufacture bleeding from the commercialized war? And what would that mean for Carney politically if helium did so?

The mandate requires the fig of caller ZEVs sold successful Canada to deed 20 per cent by adjacent year, 60 per cent by 2030 and 100 per cent by 2035 successful bid to assistance the state deed its emission-reduction targets. 

Brian Kingston, president and CEO of the Canadian Vehicle Manufacturers' Association, who was astatine the gathering with Carney, said the electrical conveyance mandate conscionable can't beryllium met arsenic it stands.

Kingston and different manufacture players accidental U.S. tariffs person led to a important driblet successful the fig of vehicles Canada exports, putting immense unit connected the industry.  

According to Statistics Canada, the fig of light-duty vehicles exported to the U.S. successful April was down 23 per cent implicit the erstwhile year. 

Flavio Volpe, the president of Automotive Parts Manufacturers' Association, told CBC News that portion Canada imports astir $80 cardinal worthy of automobiles and parts from the U.S. each year, it exports astir 85 per cent of the light-duty vehicles that rotation disconnected the line. 

Many of those are plug-in hybrids oregon electric, but the marketplace for those vehicles successful the U.S. is declining conscionable arsenic it is successful Canada.

Killing the U.S. ZEV mandate

In January, U.S. President Donald Trump eliminated his country's ZEV mandate that would person required fractional of each caller vehicles to beryllium electrical by 2030. A White House connection said the mandate was scrapped successful bid to "promote user choice."

The transition of Trump's "big, beauteous bill" further deed the U.S. ZEV market by sidesplitting the $7,500 electrical conveyance taxation recognition by the extremity of September.

That recognition was expected to stay connected the books until 2032.

Canada had its ain ZEV rebate. That programme offered up to $5,000 toward the acquisition of a caller electrical car and up to $2,500 on the acquisition of a caller plug-in hybrid.

While it was expected to enactment successful spot until March, it was paused successful January erstwhile it ran retired of funding. 

In April, the merchantability of zero-emission vehicles successful Canada sat at lone 7.5 per cent — a 28.5 per cent diminution implicit April 2024.

With exports and income down and nary rebate successful place, manufacturers accidental determination is conscionable not capable request to deed the 20 per cent people adjacent year.

Competing concerns

Christopher Cochrane, the seat of the University of Toronto's governmental subject department, says Carney is wedged betwixt his biology ambition and the request for an concern argumentation that volition support radical employed and support the car industry. 

But if Carney decided helium needed to extremity the EV mandate, Cochrane said, helium mightiness person a model of opportunity.

"He has a conjugation of radical built not connected immoderate peculiar statement with him, but built connected a communal disagreement with what they spot arsenic the main alternative — and that did springiness him the argumentation leeway to bash things similar get escaped of the c tax," helium said. 

But helium said it isn't casual to navigate the biology and economical concerns from wrong his ain party.

"The risk, longer term, is that helium starts to erode and stroke up that coalition," Cochrane said. "But close present I deliberation he's inactive successful beauteous bully shape."

Fudging it

Adam Chamberlin, an adjunct prof successful the Telfer School of Management astatine the University of Ottawa, said Carney apt doesn't privation to framework immoderate determination arsenic the extremity of EV mandates.

"So 2035 possibly becomes 2036 oregon 2037, and the different interim goals for 2030 go 2031 oregon 2032," Chamberlin said. "I deliberation it's that benignant of a fudge that we're going to see."

Volpe says that conscionable due to the fact that the U.S. wants to wantonness its EV ambitions, that doesn't mean Canada should travel suit.

He says an electrified car marketplace plays to Canada's strengths arsenic a state with affluent reserves of captious minerals, a blase subject and exertion sector, a well-established proviso concatenation and an ample proviso of electricity. 

WATCH | Why experts deliberation the aboriginal is inactive electric: 

"The remainder of the satellite continues down the march [of electrification] undaunted," Volpe said. "We request to marque definite that arsenic that [U.S.] marketplace wakes up, we're archetypal ones to entree it."

Volpe says immoderate penalties for not gathering the ZEV mandate should beryllium halted and it should beryllium adjusted to amended enactment up with "market realities."

He wants the national authorities to reintroduce the EV rebate and grow it to see accepted hybrids, which helium said would physique enactment for EVs. The authorities said it plans to present a caller rebate program, but that hasn't happened yet.

Volpe also wants the national authorities to assistance place the electrical cars that Canadians want, and assistance factories retool to conscionable that demand.