The Government of Mark Carney announced the repeal of the mandate requiring all new vehicles sold in Canada to be electric starting in 2035. This measure, known as the Electric Vehicle Availability Standard, set progressive targets: 20% of electric sales in 2026, 60% in 2030, and 100% in 2035.
Instead, the Executive is opting for a model based on tax incentives, stricter emission limits, and strong public investment in charging infrastructure and industrial production. According to Carney, the goal is not to abandon transportation decarbonization, but to adapt it to market and geopolitical realities.
International and Commercial Context
The change comes amid tensions with the United States, which is tightening its tariff agenda and reviewing the USMCA. Carney justified the decision by pointing out that the trade policy of Donald Trump’s administration forces Canada to prepare for “all possibilities.”
The Prime Minister emphasized that the automotive sector is increasingly electric and connected, and that Canada must develop the entire value chain to remain competitive.
New Measures Announced
- Direct subsidies: up to 5,000 Canadian dollars for the purchase of electric vehicles manufactured in Canada. For imported ones, aid is limited to models under 50,000 dollars.
- Investment in infrastructure: 1.5 billion dollars to expand the charging network across the country.
- Industrial support: 3.1 billion dollars to diversify markets and strengthen national production.
- Energy expansion: doubling the capacity of the electrical grid to facilitate the adoption of low-carbon technologies.
Carney stated that he expects up to 75% of new vehicles sold in 2035 to be electric, despite the elimination of the legal obligation.
Impact on the Automotive Industry
The announcement also reflects changes in Canadian automotive production:
- Japanese manufacturers represent 75% of national production.
- U.S. companies (GM, Ford, and Stellantis) have reduced their presence in the country.
- Ottawa is in talks with South Korean and Chinese brands to set up new plants.
This shift aims to attract foreign investment and establish Canada as a hub of innovation in electric mobility, without relying exclusively on regulatory mandates.
Canada is not abandoning the goal of decarbonizing transportation by 2035, but is changing the way to achieve it. The new approach combines flexibility for manufacturers and consumers with economic incentives and stricter emission standards. The strategy reflects an attempt to balance industrial competitiveness, energy transition, and climate goals in a global scenario marked by commercial and technological tensions.
