Ottawa is preparing to abandon its electric vehicle (EV) sales mandate as part of a broader overhaul of Canada’s automotive strategy, according to multiple media reports citing senior government sources.
Prime Minister Mark Carney is expected to formally announce the change on February 5, unveiling a national plan that would replace the current mandate with emissions-based regulations and revive consumer incentives aimed at boosting EV adoption. The strategy is also expected to include a $1.5-billion fund dedicated to expanding electric vehicle charging infrastructure across the country.
Canada’s EV sales mandate, introduced in December 2023, required automakers to ensure that zero-emission vehicles accounted for at least 20 percent of new light-duty vehicle sales by 2026, rising to 60 percent by 2030 and reaching 100 percent by 2035. The policy quickly became a flashpoint between the federal government and the auto industry.
Last September, Ottawa paused implementation of the 2026 target and launched a 60-day policy review after automakers warned they were unlikely to meet near-term sales requirements. Industry leaders argued that existing climate policies were already sufficient to meet emissions goals and cautioned that weak consumer demand and supply-chain challenges could lead to missed targets.
At the time, the federal government said the pause was intended to give the industry breathing room as it faced economic uncertainty, an ongoing trade dispute with the United States, and several high-profile plant closures.
Under the new approach, Canada is expected to adopt emissions rules similar to those used in the European Union. That framework relies on “corporate average fuel efficiency” benchmarks, which require automakers to keep average carbon dioxide emissions across all vehicles they sell within defined limits, rather than mandating specific sales quotas for electric vehicles.
While sources have not disclosed the precise emissions limits Canada would set, the EU model is designed to move toward zero-emission vehicle sales by 2035. European lawmakers are also debating changes that could allow a limited share of non-fully electric vehicles such as plug-in hybrids to remain on the market beyond that date.
The federal government is also expected to bring back purchase incentives similar to those offered previously. Reports suggest rebates of up to $5,000 for buyers of fully electric vehicles and about $2,500 for plug-in hybrid models. Ottawa’s Incentives for Zero-Emission Vehicles program was suspended last year after more than $3 billion in funding was fully allocated.
The shift would mark a significant policy reversal following sustained criticism from the Conservative Party, which has long argued that the EV sales mandate was unrealistic. Conservatives have said the policy disproportionately affects rural Canadians, fails to account for Canada’s climate and long driving distances, and risks undermining the domestic auto industry.
“It will wipe out our auto sector,” Conservative Leader Pierre Poilievre has said previously.
Public skepticism has also been evident. A Leger survey conducted last year found that 71 percent of Canadians viewed the EV sales mandate as unrealistic, with many citing high costs as a major concern.
If confirmed, the new automotive strategy would signal a move away from rigid sales targets toward a more flexible, market-driven approach one that aims to cut emissions while giving automakers and consumers greater latitude during Canada’s transition to cleaner transportation.
