Carney replaces EV sales mandates with purchase rebates in new auto strategy

In an effort to pivot from the tariff war, Prime Minister Mark Carney is swapping sales mandates for rebates in the auto industry.

The federal government laid the groundwork Thursday to revamp Canada’s auto sector, outlining a suite of measures aimed at boosting EV adoption and more investment.

The Carney government is calling this their “national automotive strategy”.

They plan on re-tooling current programs to drive up domestic production and hope to have electric vehicles make up three quarters of total sales in 10 years.

“To remain competitive and to realize our potential, we must develop the entire ‘value chain’ for next generation vehicles,” said Carney.

Increased auto production, job growth and emission reductions are all achievable goals, according to the prime minister.

As his government lays the foundation to get the sector back on its feet, he said, “this is a government that is relentlessly focused on results.”

On Thursday In Vaughan, Ont., Carney unveiled Canada’s national automotive strategy, amid uncertainty surrounding the Canada-U.S.-Mexico Agreement review with U.S. President Donald Trump.

Carney says a $3 billion injection is coming to help attract more investment into domestic manufacturing.

Beginning with tax breaks four points lower than the U.S.; a plan for a new, tariff relief credit system to benefit automakers that produce vehicles in Canada, and a $100 million strategy to help diversify to other international markets.

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Global Automakers of Canada called the strategy “comprehensive”, and believes it will need more examining.

“The inference from today’s news conference is that there may be another incentive associated, like if you invest here, you might get a greater incentive or credit somehow,” said David Adams, the president of Global Automakers of Canada. “I think those are things we need a better understanding of.”

Also part of the strategy, is a slew of new policies on electric vehicles.

Carney says Ottawa is doing away with its EV sales mandate on companies, in favour of stricter emissions standards.

They’re also reintroducing the federal government’s popular rebate program: incentive offers of up to $5,000 for EV purchases and up to $2,500 for plug-in hybrids.

“We’re tightening by two-fold our GHG (greenhouse gas) emissions standards and we’re giving the industry the flexibility to achieve that,” said Carney.

Premier Doug Ford didn’t attend Carney’s announcement, but was still in the Toronto area on Thursday.

He threw in his support for the federal auto plan and then was asked whether Ontario will match Ottawa’s contributions on EVs.

“We invested billions of dollars in this sector, into domestic made cars, until they were able to hire more people,” said Ford. “We help build plants, and additions to plants, and building a battery plant — the 4th largest in the world, 16 million square feet — so that’s what we decided to do.”

Carney says his government has set expectations to drive the adoption rate of EVs to 75 per cent of new sales by 2035, and 90 per cent by 2040.

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