Canada's EV Market Was Already in Trouble-Tariffs Made It Worse, Workers Say

Canada Standard

27-06-2025

Bob Pulham recalls the optimism in the air when General Motors began producing electric vans in Ingersoll, Ontario, in late 2022.
As the first BrightDrop commercial van rolled off the line at the CAMI Assembly plant, GM executives, union leaders and former prime minister Justin Trudeau touted it as a major milestone for electric vehicle production in Canada, The Canadian Press reports.
Pulham, a Unifor representative at the plant, remembers talk of increasing shifts and hiring more people to produce 50,000 such delivery vans annually by 2025.
But the sales never picked up, the plant kept slowing down the production line amid sluggish demand and the optimism slowly faded.
This April, GM announced it would idle the plant for several months and resume production in October with just one shift. Union members say about half of 1,200 workers at the plant will be gone as a result.
"I feel bad for all 600 that are being laid off. It's a horrible position to be put in," Pulham said in an interview. "It's a crazy amount of uncertainty and I think that hurts people."
The announcement came shortly after U.S. President Donald Trump imposed tariffs on Canadian-made vehicles, but a GM Canada spokesperson said the halt was directly related to lower-than-expected demand for the BrightDrop vans.
Pulham, who began working at the CAMI plant more than three decades ago, said his wife has also been laid off and is now pondering whether to go back to school or search for a new job.
Several other companies, including Honda, Stellantis, Umicore, and Ford have also delayed or scrapped their EV projects amid the slow sales growth and the ongoing trade war.
GM Canada said reducing production in Ingersoll was necessary to adjust to market demand and balance inventory.
But workers at the CAMI plant say Trump's tariffs made things even worse. They've experienced the industry's ups and downs over the decades, but say this challenge is especially difficult at a time of great economic uncertainty.
"There's a push to build (vehicles) in the U.S., and that has caused a lot of issues over here," Pulham said. "So, it's not a good situation."
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Mike Van Boekel, the Unifor Local 88 CAMI plant chairperson, said even though workers knew layoffs were on the horizon, the news was still shocking for many.
"It was terrible," he said. "I thought we were going to lose a shift. I was worried in the back of my mind ... and now it has come true."
GM's ambitious plan to be at the "forefront of a big wave" of electric delivery van production didn't materialize because the timing was not right, Boekel said.
He felt the company was gaining some momentum before the imposition of 25% tariffs on Canadian-made vehicles. GM had just received an order of a thousand delivery vans from the U.S. grocery chain giant Kroger, he said.
"So, it looked like we were just getting to go and all of a sudden, the tariffs came on," he said, adding that CAMI workers will still produce Kroger's vans when they return to the factory this fall.
Workers aren't the only ones feeling the pain.
The ripple effects of layoffs are a source of concern for Ingersoll Mayor Brian Petrie. The CAMI plant, which spans two million square feet, is the largest employer in the southwestern Ontario town of about 14,000 people.
Petrie said Ingersoll expects to receive $1.8 million in municipal taxes from the company this year, which is around 10% of the total levies the town is expected to collect.
"It is devastating because we're not talking about new employees here, either, these are long serving employees and ... they've had a tough road going up to that point," Petrie said in a recent interview at his office.
The federal government under Trudeau set a target of 100% zero-emission sales of light duty vehicles by 2035. Environment Minister Julie Dabrusin indicated mid June that the mandate won't be changing.
But that goal seems hard to achieve, Petrie said.
"It's honest to say that I think everybody may have misunderstood the scale of the problem that we're facing to do the EV switch," he said. "I think all of them will admit that it's been a bigger problem than they once thought."
Still, he thinks the more than $50 billion in investments that Canada has pledged since 2020 to incentivize the EV supply chain will pay off in the long term.
Some provinces, including Manitoba and Quebec, are offering rebates for electric vehicle purchases. B.C.'s rebate program, which was the longest running in the country, was paused last month. Ontario scrapped its rebate program after Premier Doug Ford's Progressive Conservatives won the election in 2018.
The federal government also halted in January its Incentives for Zero-Emission Vehicles program, which offered up to $5,000 off the cost of a new electric vehicle. Dabrusin said Ottawa intends to bring back consumer rebates for EVs, but doesn't yet know what they'll look like.
Zero-emissions vehicles represented only 8.7% of all new vehicle sales in Canada in the first quarter of 2025-a drop from 16.5% in the fourth quarter of 2024, according to data from Statistics Canada.
The sales of EVs and plug-in hybrids had steadily increased from below 1% in 2017 to 14.6% in 2024, but experts say the growth hasn't been nearly as fast as many expected.
Dan Park, CEO of online used car retailer Clutch, said EV adoption has been slower in Canada because people normally drive long distances in colder temperatures, which reduces battery life by 20 to 40% and slows down the charging speed.
"Canada is just a fundamentally harder market to have," he said. "Until technology and battery life is improved to be able to handle colder conditions, I think Canadians will just shy away from it."
Park said EVs make up only 5% of Clutch's inventory, which is tied to consumer demand.
He said consumer rebates and production subsidies "artificially propped up the market," and provincial and federal governments should instead invest in a stronger charging infrastructure to encourage more Canadians to adopt EVs.
A recent survey by consumer insights firm J.D. Power shows that only 28% of nearly 4,000 respondents said they were "very likely" or "somewhat likely" to consider an EV for their next vehicle purchase, down from 29% last year and 34$ in 2023. The survey also found that 75% of new vehicle purchasers aren't confident Canada can reach its 2035 zero-emission vehicle sales goal.
Manufacturers took note of the lacklustre interest.
Honda Canada announced in May that it's postponing a $15-billion EV project in Ontario, citing the "unexpected slowdown" in the market. Stellantis is postponing the production of an EV model of 2026 Dodge Charger Daytona R/T at its Windsor, Ont., plant as it assesses the effects of U.S. tariffs. And Ford Motor Co. said it will assemble F-Series Super Duty pickup trucks at its Oakville, Ont., plant beginning in 2026 instead of planned electric vehicle production at the site.
Despite the setbacks, Environment and Climate Change Canada said it will continue to support investments and innovations in the EV supply chain.
Canada's zero-emissions vehicle sales mandates ensure "Canadians have access to electric vehicles, which offer long-term savings for consumers," department spokesperson Hermine Landry said in a statement.
"Transportation emissions have declined to levels not seen in decades, demonstrating that we can grow our economy while also fighting climate change," Landry said. "It is important to remain focused on the fact that the real threat to the Canadian auto industry right now are the unjustified tariffs from the United States."
Overall, Canadians buy around two million new vehicles annually and the country produces approximately 1.5 million of them, according to Unifor. Autoworkers say the federal government should push for more vehicle production in Canada from manufacturers such as Kia, Hyundai, Mitsubishi and others that don't have any production footprint in the country, to offset the impact of U.S. tariffs.
"It'd be nice, (if) the government stands up for us and you know says to these big companies, 'If you want to sell here, then you need to build here as well,'" said Paul Harvey, who works as a framing team leader at CAMI.
Harvey said that although he and his wife will keep their jobs at the CAMI plant in Ingersoll, they will both have to work the same hours when production resumes on one shift. With four children at home, that means the couple will need a new child-care plan and increased costs will come with it.
Harvey, who has been an autoworker for 20 years, said it would be "kind of silly" to think that the transition to electric vehicles would happen at the flick of a switch. He said he and his wife remain optimistic about the EV market and that's why they purchased a Chevy Blazer EV just a few weeks ago.
"We're committed to moving into the future with the electrified vehicles," he said.
"I do believe it will get there eventually."
This report by The Canadian Press was first published June 19, 2025.
Source: The Energy Mix