How Ottawa’s New Program Replacing the EV Mandate Pushes Canadians Toward Electric Vehicles

Commentary

It’s not surprising that Prime Minister Mark Carney finally scrapped the electric vehicle (EV) mandate brought in by his predecessor Justin Trudeau. Despite years of subsidies, promotion, and arm-twisting, Canadians weren’t willing to embrace EVs in numbers anywhere near those mandated.

Auto manufacturers and dealers were caught in an impossible situation as they were expected to build and sell a product under a fast-approaching deadline when consumers didn’t want it. Either the mandate had to be scrapped, or the punitive phase of the policy would have to be applied to dealers and manufacturers. Carney chose the former option.

However, in effect, the government is still mandating EVs through new emission regulations for vehicles.

The goal for EV adoption has been revised to be at 90 percent by 2040. It’s as aggressive as the previous goals, only the date has been pushed a little farther down the road. Nearly two million new vehicles were sold in Canada in 2025, and only 11 percent of those were zero-emission vehicles. Not only is that a long way from 90 percent, but EV sales also went down 32 percent in 2025. If the government wants to reach its EV goals, it must impose aggressive policies upon Canadians to get them to change their vehicle purchases. It appears that’s exactly what it is prepared to do.

Ottawa says it will demand more stringent emissions standards for new vehicle models between 2027 and 2032. This will add significantly to the manufacturing cost and consumer price for new vehicles. Manufacturers of EVs still haven’t been able to provide cost-effective EV options to consumers, which is largely why Canadians haven’t adopted them. The new regulations won’t make EVs any more affordable, but will price conventional vehicles so high that they will have similar costs to EVs. The hope is that consumers will shrug and purchase EVs if the costs are equal. The reality is that fewer people will be able to afford personal vehicles at all, and it will put negative pressure on the automotive sector. That leads us to the carrot part of the strategy, which will be led through subsidies.

The government plans to introduce a $2.3 billion EV Affordability Program offering purchase incentives of up to $5,000 for battery-electric and fuel-cell vehicles and up to $2,500 for plug-in hybrids. This program will only apply to vehicles priced under $50,000, which greatly reduces the number of EVs it will apply to. The average EV in Canada costs over $55,000. The cap won’t apply to Canadian-made EVs and hybrids, but this is deceptive considering how few Canadian EVs and hybrids are manufactured. One beneficiary of this program could be China, however, as the Carney government just slashed its previous tariffs on Chinese EVs from 100 percent to 6.1 percent.

The influx of inexpensive Chinese EVs would qualify for purchase rebates and may increase the uptake of Canadian EV purchases by consumers, but it will decimate attempts to create an EV manufacturing sector in Canada. This will lead to demands for more subsidies to be poured into battery plants and EV manufacturers despite billions of dollars in prior subsidies proving to be ineffective in creating a lasting, viable industry.

Another factor holding back EV purchases by Canadians has been a lack of infrastructure for charging them. In a country as vast as Canada, people want to be assured they can refuel regularly when travelling beyond urban areas, and the distance between EV charging stations can be dangerously long. The government solution is to allocate $1.5 billion in subsidies for charging stations and hydrogen refilling stations.

It’s questionable whether the punishments and subsidies will manage to get EVs to reach the 90 percent level of new vehicles sold within 15 years, but it’s without question that these strategies will hit Canadians hard in the pocketbooks. The cost of new vehicles is sure to rise, as will taxes due to spending billions on subsidies. Meanwhile, Canada’s electric grid is far short of being able to provide the power millions of EVs will require if Canadians purchase them. To address that, the feds say they will announce a plan to double Canada’s electricity capacity. But that can’t be cheap, and the costs will be in the billions of dollars.

Canadians may embrace EVs en masse one day, but clearly they aren’t ready to yet. The economic cost of forcing the country into EVs will be high, and the tactics to get people into them may not be any more successful than the previous ones.

Is there a motivation aside from emissions reduction driving the government on this issue?

The free market and new technology would take care of things over time if the government would allow it to.

Views expressed in this article are the opinions of the author and do not necessarily reflect the views of The Epoch Times.