Five auto CEOs warned Carney in May that EV mandate would 'inflict serious damage' across industry
The CEOs said the drop was 'in direct response' to the federal and provincial governments either 'weakening or eliminating purchase incentive programs that had been supporting demand.' Ottawa ended its program back in January, as did Quebec, which has since introduced a rebate.
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Flavio Nienow, a spokesman for Transport Canada, the department responsible for developing the rebate, said in a statement that the government 'understands that the higher purchase price of (electric vehicles) remains a key barrier to mass zero-emission vehicle adoption.'
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Laura Scaffidi, a spokeswoman for Transport Minister Chrystia Freeland, said the government was looking at ways to reintroduce a rebate of up to $5,000, but did not provide a timeline.
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In their letter from May, the CEOs cast doubt on the ability of a new rebate to cause electric vehicle sales to make a turnaround, citing other challenges such as 'natural consumer demand,' as well as the lack of infrastructure and challenges around affordability and slow adoption by commercial and government sectors.
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These factors combined 'make the current targets unrealistic and unattainable.' The letter requests that the mandate be repealed, given there was 'no longer a pathway' to reach its first target of seeing 20 per cent of new vehicle sales be zero-emission vehicles by 2026.
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Transport Canada defines a zero-emission vehicle as a fully electric, plug-in battery hybrid, or one powered by hydrogen fuel cells.
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The mandate, which the federal government formalized in 2023 to reduce greenhouse gas emissions within the transportation sector, sets out sales targets companies must hit, beginning with 20 per cent in 2026 and then rising to 60 per cent by 2030 before hitting 100 per cent by 2035.
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'Given the impending 20 per cent requirement for 2026, the federal mandate is already forcing automakers to either limit combustion engine (ICE) and hybrid vehicle sales in Canada, or purchase credits from automakers like Tesla that do not produce vehicles in Canada,' the letter reads.
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It warns that the regulation would result in lower vehicle sales and fewer jobs in the sector and higher prices for consumers.
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'This will undermine consumer affordability and choice at a time of rising costs, limited demand, and growing uncertainty about infrastructure readiness.'
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It argues that existing regulations for greenhouse gas emissions would drive the transition to electric vehicles and provide more flexibility.
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Environment Minister Julie Dabrusin and other ministers have been meeting with industry to discuss their concerns, with Dabrusin's office saying it was exploring 'flexibility.'
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Spokeswoman Jenna Ghassabeh reiterated that position in a new statement, saying the government was engaging with industry to ensure measures 'reflect times we are in.'
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Kingston, who met with Dabrusin last month, said the minister appears committed to the policy.
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He said some at Environment Canada have been 'pushing back' against their concerns that the matter is urgent.
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'We need a clear public signal that it will be repealed, or automakers are going to continue to have to make disastrous choices, which is restricting vehicle sales and buying credits from Tesla.'
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