Carney pauses EV mandate for “this year”

Carney has announced a review of his government’s planned electric vehicle mandate, months before the incremental phase-out of new gas and diesel vehicle sales was set to begin.

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Prime Minister Mark Carney has announced a review of his government’s planned electric vehicle mandate, months before the incremental phase-out of new gas and diesel vehicle sales was set to begin. Although the EV mandate is paused for “this year,” the prime minister did not commit to entirely axing the program.

Carney announced new measures on Friday in Mississauga, including $5 billion in corporate handouts to Canadian businesses. He said automakers need “flexibility” given U.S. trade turbulence.

Before Friday’s pause announcement, the mandate was set to begin incrementally banning the sale of new gas and diesel vehicles by next year.

The policy would have forced 20 per cent of new vehicles sold in 2026 to be electric, rising to 60 per cent by 2030 and 100 per cent by 2035.

“To add flexibility to the automotive sector, we will remove the 2026 electric vehicle availability standard, which specifies the share of new vehicle sales that must be electric next year,” Carney said. “This will provide immediate financial relief to automakers at a time of increased pressure on their competitiveness, and the government will begin immediately a 60-day review of the EV standard to identify future flexibilities and ways to reduce costs.”

Asked if his government would scrap the program entirely, Carney said the removal of the new gas and diesel ban was “in the context of this year.”

“The EV mandate this year adds to the liquidity issues…the financial challenges that these producers have. They’ve got enough on their plate right now. So we’re taking that off, allowing them to focus on working,” Carney said. “We’re using this as an opportunity, as part of a broader strategy on climate competitiveness, to look at all our measures to help get greenhouse gases down.”

The domestic auto industry, Ontario Premier Doug Ford and poll data have all shown strong opposition to the EV mandate, warning it would hurt Canada’s struggling car industry.

“We’re at the start of a restructuring in the Canadian auto sector. The suspension of the EV mandate for 2026 is part of helping with that,” Carney said.

He said his $5 billion “Strategic Response Fund” is part of the Carney government’s plan to restructure the auto industry and can be used by businesses for “retooling, reinvestment, repositioning,” and retraining.

“We expect heavy use in the auto industry to help with that repositioning, and it is in the context of broader trade discussions, yes, with the United States, first and foremost, given the deep, deep ties between Canada, the United States in the auto sector, as well as other as well as other countries,” Carney said.

Carney also suggested the Liberals could use the removal of a 100 per cent tariff on Chinese vehicles as a bargaining tool with China, possibly to secure the removal of tariffs on Canadian agriculture and seafood products.

He said the plan was to achieve the Liberal goal of reducing greenhouse gases in key sectors and across the economy.

“We’ll look at the interaction between the EV mandate, our clean fuel standards, our investment tax credits, and trade policies, all of those elements, because what this government is focused on is absolutely results,” he said. “Not saying something’s going to happen at a certain time, but giving workers and businesses the tools to make it happen.”