Canada on Wednesday said it was scrapping a national electric vehicle mandate, marking another retreat from climate measures under the Liberal government of Prime Minister Mark Carney.
In 2023, under then-Prime Minister Justin Trudeau, Ottawa had mandated that 20% of all vehicles sold in 2026 be emissions-free. The push was unpopular with vehicle manufacturers, who said it imposed unsustainable costs, and looked vulnerable when the new U.S. administration cut support for EVs.
Canada will introduce stronger emissions standards for 2027-2032 model years which it says will help achieve a goal of 75% EV sales by 2035 and 90% EV sales by 2040.
Cutting the EV sales mandate “will rationalise emission reduction policies, focusing on the outcomes that matter to Canadians without placing undue burden on the Canadian industry”, Carney’s office said in a statement.
Carney, citing the damage U.S. tariffs have done to the highly integrated North American auto sector, is pressing the country to diversify its trade and boost domestic manufacturing.
Last November, the federal government scrapped a planned emissions cap on the oil and gas sector and dropped rules on clean electricity, moves designed to spur investment in energy production.
Canada will maintain counter-tariffs on auto imports from the United States and is looking at ways to encourage Canada-based vehicle manufacturers to boost production and investment.
It is also launching a new C$2.3 billion program offering incentives of up to C$5,000 for EVs made in countries Canada has free trade agreements with. Canada is promising C$1.5 billion to improve the national charging network.