The federal government is reinstating incentives for electric vehicle (EV) purchases, a move announced today by Prime Minister Mark Carney. The new $2.3 billion program aims to make EVs more affordable for Canadians and Canadian businesses. The incentives will offer up to $5,000 for battery electric and fuel cell EVs, and up to $2,500 for plug-in hybrid models.
This announcement comes as the government scraps the previous administration's EV sales mandate, which targeted 100% EV sales by 2035. The mandate had faced criticism from the auto industry and provincial leaders, who deemed the targets unrealistic. In its place, the government is introducing a greenhouse gas emission standard for vehicle models from 2027-2032. The new target is to have 75% of vehicle sales be EVs by 2035 and 90% by 2040.
To qualify for the incentive, EVs must have a final transaction value of under $50,000 and be manufactured in countries with which Canada has free trade agreements. However, the $50,000 cap will not apply to Canadian-made EVs and PHEVs. This measure aims to support the Canadian automotive industry during the transition to electric vehicle production. The government also intends to maintain Canada's 25% counter-tariffs on auto imports from the United States to ensure a level playing field.
The new automotive strategy also includes investments in EV charging infrastructure and support for auto workers. The government aims to protect jobs and help the domestic sector grow and diversify into new markets. The changes are intended to "rationalize emissions reduction policies to focus on outcomes that matter to Canadians," according to officials from the federal transport, environment, and economic development departments.
