Ottawa Plans to Eliminate EV Mandate in New Auto Strategy: Sources

In a significant shift in its automotive policy, the Canadian government, under Prime Minister Mark Carney, is set to announce plans to eliminate the electric vehicle (EV) sales mandate. This announcement is expected to take place on Thursday and will introduce a new automotive strategy focused on revised vehicle emissions standards and incentives for EV purchases.

Canada’s New Automotive Strategy

According to sources, the upcoming strategy will replace the existing EV sales mandate with new emissions standards that closely resemble regulations in Europe. These standards aim to reduce emissions from new vehicles, aligning Canada more closely with international efforts to combat climate change.

Key Components of the New Strategy

• Emissions Standards: The government will implement emissions performance standards similar to the European Union’s corporate average fuel efficiency (CAFE) standards.
• Consumer Rebates: A revival of the iZEV program, providing incentives for EV purchases, is on the agenda.
• Infrastructure Fund: An EV infrastructure fund worth $1.5 billion is anticipated to support the expansion of charging stations.

The new emissions standards aim for ambitious reductions in vehicle emissions. The European model has achieved a 28% decrease in emissions from passenger cars and a 9% decrease from vans between 2019 and 2024. Current European targets are focused on achieving zero emissions for all new vehicles by 2035, with some flexibility for plug-in hybrids.

Revival of Consumer Incentives

As part of the new strategy, the government plans to reintroduce consumer rebates for electric vehicle purchases, which had previously been paused. The iZEV program, which offered substantial financial incentives, is expected to resume support for Canadians looking to purchase new EVs.

• $5,000 rebate: Available for fully electric vehicles.
• $2,500 rebate: Available for plug-in hybrid vehicles.

This announcement comes after significant calls from automakers to eliminate the sales mandate entirely, citing existing policies that already support emissions reduction targets. In 2021, the previous government aimed for EVs to make up at least 20% of vehicle sales, with a long-term goal of 100% by 2035. However, the mandate was paused in 2023 due to concerns over the auto sector’s liquidity amid trade tensions.

Impact on EV Sales

The suspension of the rebate program led to a dip in EV sales, as consumers opted to wait for renewed incentives. By late 2025, EV sales began to recover, with recent statistics indicating that EVs comprised 11.3% of new vehicle sales in November. Sales peaked at 18.29% in December 2024, before the incentives were placed on hold.

This strategic realignment in Canada’s automotive policy reflects a balance between meeting emissions reduction targets and responding to the concerns of the automotive industry. The forthcoming announcements will be closely watched by both industry stakeholders and consumers looking to transition to electric vehicles.