Canada EV mandate dropped as Ottawa shifts to stricter emissions rules

On February 5, Canadian Prime Minister Mark Carney announced that his government would end the Canada EV mandate, signaling another shift in the country’s climate policy framework. The decision follows earlier moves to drop an emissions cap on the oil and gas sector and clean electricity regulations, reflecting a broader recalibration of climate measures.

Canada EV mandate replaced by emissions-based targets

Instead of the Canada EV mandate, the government will implement stronger emissions standards for the 2027–2032 model years. Officials say this approach is designed to deliver outcomes rather than impose rigid sales quotas, while still supporting Canada’s transition toward cleaner mobility.
The updated framework is expected to support ambitious long-term goals, including 75% EV sales by 2035 and 90% by 2040. Carney stated that replacing the mandate with emissions rules “focuses on the results that matter to Canadians, while avoiding undue burdens on the Canadian auto industry.”

Alignment with global automotive policy shifts

The change mirrors a similar move in Europe, where policymakers agreed in December to drop a planned 2035 ban on new combustion-engine vehicles. Canada’s revised stance reflects growing international emphasis on flexible, technology-neutral pathways to reduce automotive emissions.

Incentives, charging investment, and industry response

Alongside regulatory changes, the government is launching a CAD 2.3 billion incentive program offering up to CAD 5,000 per vehicle for EVs produced in countries with Canadian free-trade agreements. Vehicles from China will not qualify under the scheme, reinforcing a trade-aligned industrial strategy.
An additional CAD 1.5 billion will be directed toward expanding the national EV charging network, addressing infrastructure gaps seen as a key barrier to broader adoption. These measures aim to balance consumer affordability, manufacturing competitiveness, and infrastructure readiness.

Political and industry reactions

In 2023, Canada had mandated that 20% of all vehicles sold in 2026 be emissions-free. Despite ending that requirement, Carney maintained that Canada remains “a leader on climate change,” adding that a climate competitiveness strategy will be released in the coming weeks.
Ontario Premier Doug Ford welcomed the decision, calling it a pivotal moment as economic pressures and sovereignty concerns intensify amid trade tensions with the United States. Canada will continue counter-tariffs on U.S. auto imports and is exploring additional ways to encourage domestic manufacturers to increase production and investment.