The government of Mark Carney will remove a 2035 internal combustion engine car ban and instead boost incentives for electric vehicle purchases, media are reporting ahead of the formal announcement of a new automotive strategy later today.
CTV cited unnamed sources from the government and car industry as saying that the Carney government will replace the ICE car ban with new – and likely tighter – fuel efficiency standards coupled with subsidies for EV buyers in the form of tax relief, to the tune of C$5,000, or $3,660, per car. The government is also expected to set up an EV infrastructure fund worth C$1.5 billion.
Bloomberg noted that the plan aims to appease Canada’s automotive industry, which fought against the EV mandates, designed to set a 20% EV sales target over the near term, rising to 60% by 2030 and 100% by 2035. The industry called the goal unrealistic and impossible to achieve. They also argued that the gradual EV switch will be expensive for Canadians and reduce their choices.
The automotive industry plan will also signal a pivot away from the United States, with the government prioritizing support for companies making cars in Canada in order to save thousands of jobs from the effect of tariffs that U.S. President Trump slapped on foreign-made autos last year.
In other words, it appears the Carney government is still very much in favor of the electrification of transport, but will change the means through which it wants to achieve that goal. It remains uncertain whether the Canadian auto industry would be happy with the new terms, seeing as fuel efficiency standards have been used by other administrations to essentially mandate EV sales without calling it a mandate, with California being a case in point. The state has such stringent emissions rules for light vehicles that few carmakers can meet with vehicles other than EVs.
By Irina Slav for Oilprice.com
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