by The Canadian government has announced significant changes to its automotive strategy, particularly regarding electric vehicles. The main innovations include:
New Strategy and Revised Goals
Canadian Prime Minister Mark Carney presented a new automotive strategy aimed at encouraging the production of Canadian-made cars and utilizing the nation’s potential in the field of artificial intelligence. As part of this plan, the country is radically revising its electric vehicle mandate. The goal is to “rationalize emissions reduction policy” and set the country on a path where 75% of sales will be electric vehicles by 2035, and this figure should increase to 90% by 2040. This is a significant change, as the country previously planned to reach a 100% target by 2035.
Furthermore, Canada is cancelling the Electric Vehicle Availability Standard and raising emissions standards. The government stated that this “will allow manufacturers to use a wide range of technologies to comply with the new standards and respond to consumer preferences in the near term, while stimulating the adoption of EVs over time.”
New Financial Incentives for the Public
Despite slowing the transition to electric vehicles, the government plans to encourage Canadians to purchase them through a new five-year program. Electric vehicles and fuel cell vehicles can receive an incentive of up to 5,000 Canadian dollars, and plug-in hybrids – up to 2,500 Canadian dollars.
Canada’s auto industry is facing enormous pressure, leaving workers and businesses in a state of uncertainty. That’s why we are taking control into our own hands — and launching a new strategy that will transform the industry into a world leader in the electric vehicle segment. We will reward production…
For vehicles manufactured in countries with which Canada has a free trade agreement, a final transaction price limit of 50,000 Canadian dollars is set. However, for Canadian-made electric vehicles and plug-in hybrids, there is no price limit at all.
To further facilitate the transition, Canada is investing 1.5 billion Canadian dollars in the development of charging infrastructure. This is intended to make “charging electric vehicles across the country easier and more convenient for drivers.”
Support for Business and Changing Trade Orientations
The government is allocating up to 3.1 billion Canadian dollars to “help the automotive industry adapt, grow, and diversify into new markets.” Tax incentives will also be introduced to encourage companies to invest in electric vehicles and clean technologies.
Additionally, the country aims to enhance the competitiveness of its automotive sector by rewarding companies that produce and invest in Canada. Counter-tariffs on car imports from the United States will also be maintained, and the possibility of increasing car imports from other regions is being considered.
China is coming to the forefront, as car imports from there are planned in the near future. Ultimately, Canada hopes that Chinese automakers will open production in the country and manufacture cars locally. This could help fill the void left by American automakers, who have moved some production to the USA.
Measures to Protect Auto Workers
Canada has announced a series of measures aimed at protecting auto workers in the era of trade wars and electrification. In particular, a new Work-Sharing grant will be introduced, with the goal of supporting job retention and preventing layoffs.
The country will also provide employment assistance and retraining support for up to 66,000 people, including laid-off auto workers. This will be achieved through investments of 570 million Canadian dollars.
Impact of American Tariffs and Search for New Markets
The government noted that over 90% of Canadian cars and 60% of Canadian auto parts are exported to the United States. This is a major problem, as since April, Canadian cars have faced a 25-percent tariff in the USA. The country stated that this tariff “threatens the Canadian automotive manufacturing industry and the 125,000 direct jobs it supports.”
In light of this, the country aims to develop a more independent economy capable of supplying Canadian cars to new export markets.
Unifor welcomes elements of the new federal auto policy, while calling for bold steps to protect Canadian auto jobs and secure a future for workers at idled plants in Brampton and Ingersoll.
In his statement, Mark Carney said: “Canada’s new government is fundamentally transforming our economy — from an economy dependent on a single trading partner to one that is stronger, more independent, and more resilient to global shocks. We are making strategic decisions and generational investments to build a strong Canadian auto sector where Canadian workers will build the cars of the future.”
These changes are occurring against the backdrop of complex international trade relations, particularly tensions with the USA. The revision of ambitious electric vehicle targets may indicate a more realistic approach that takes into account both technological readiness and economic realities. The emphasis on incentives for Canadian production and cooperation with new partners, such as China, points to a desire to create a more autonomous and diversified automotive industry. The success of this strategy will largely depend on the ability to attract investment and adapt the workforce’s skills to the demands of the future.
