The federal government is contemplating reintroducing consumer incentives for electric vehicles and plug-in hybrids as part of its national automotive strategy, according to sources familiar with the matter. The decision on these incentives, which may resemble a previously halted rebate program, is still pending.
Transport Minister Steven MacKinnon hinted at upcoming developments regarding EV incentives during a recent statement. Canada’s previous zero-emissions vehicle incentive program, known as iZEV, was discontinued over a year ago due to overwhelming demand after providing customers with up to $5,000 towards EV purchases.
While Environment Minister Julie Dabrusin had alluded to a potential revival of consumer rebates last year, the recent budget under Prime Minister Mark Carney did not address EV rebates explicitly or allocate funds for the program’s continuation.
A senior Canadian official mentioned that the forthcoming auto strategy in February will outline the government’s stance on the paused EV sales mandate, EV infrastructure, and investments from countries such as South Korea, Germany, and China. Following discussions between Carney and Chinese officials in Beijing, agreements were reached to reduce tariffs on Chinese EV imports into Canada in exchange for adjustments in tariffs on specific Canadian agricultural products.
Industry Minister Mélanie Joly refrained from divulging the cabinet’s plans regarding incentives or the EV mandate ahead of a recent cabinet meeting, emphasizing ongoing deliberations on the auto strategy.
Carney is facing mounting pressure from various provinces, industry leaders, and the Conservative party to reconsider the incremental sales targets necessitating a substantial portion of new vehicles to be electric by 2030 and fully electric by 2035. The EV sales mandate aimed to ensure a diverse range of zero-emission vehicles in the market.
In response to industry concerns and the complex economic landscape, Carney paused the 2026 targets for 60 days, citing the strain on the Canadian auto sector, particularly amidst trade tensions with the U.S. and President Donald Trump’s tariffs.
Brian Kingston, president and CEO of the Canadian Vehicle Manufacturers’ Association, argued that achieving the EV mandate’s goals within the specified timeline is unrealistic without increased government support. He advocated for reevaluating the EV mandate, suggesting that it overlaps with existing tailpipe emissions regulations.
Meanwhile, the government is engaging with stakeholders to enhance Canada’s regulations on greenhouse gas emissions from passenger automobiles and light trucks. These regulations, which determine permissible pollution levels from vehicles, offer automakers flexibility in compliance by enhancing engine efficiency, promoting EV sales, or trading credits with other manufacturers.
In a separate initiative, the government is exploring partnerships to expand the charging station network to alleviate concerns among potential EV buyers regarding convenient access to charging infrastructure. Discussions include the possibility of involving Canada’s Major Projects Office to expedite the construction of additional charging stations.
Furthermore, industry insiders disclosed that Ottawa is open to reinstating funding for EV charging stations through the Zero Emission Vehicle Infrastructure Program to support the growth of EV infrastructure in the country.
