Prime Minister Mark Carney is expected to announce a sweeping national automotive strategy on Thursday that will abandon Canada’s electric vehicle (EV) sales mandate and replace it with tougher vehicle emissions standards, while also restoring federal rebates for EV buyers.
According to government and industry sources, the new framework will align Canada more closely with Europe’s approach, shifting the focus from mandatory EV sales targets to emissions limits for automakers’ overall fleets. The sources spoke on condition of anonymity as they were not authorized to discuss the plan ahead of its official release.
As part of the announcement, Ottawa is also expected to launch a new EV infrastructure fund worth approximately $1.5 billion, aimed at expanding charging networks across the country.
The upcoming policy is expected to mirror the European Union’s “corporate average fuel efficiency” system, which requires automakers to meet fleet-wide emissions targets rather than sell a fixed percentage of electric vehicles. Under similar rules in the European Union, emissions from new passenger cars dropped by 28 per cent between 2019 and 2024, while emissions from vans fell by nine per cent, according to the European Commission.
While Ottawa has not released specific targets, sources say Canada’s standards will come close to achieving the emissions reductions envisioned under the former EV sales mandate. In Europe, current rules aim for all new vehicles to be zero-emission by 2035, though proposed revisions would allow limited flexibility for plug-in hybrids.
Canada’s previous Liberal government had required automakers to ensure that EVs made up at least 20 per cent of new vehicle sales in 2026, rising to 100 per cent by 2035. That mandate was paused by Carney in September as part of a broader review intended to support the auto sector amid ongoing trade tensions with the United States.
Automakers had lobbied aggressively for the mandate’s removal, arguing that existing climate policies were sufficient and that rigid sales targets risked disrupting production and affordability.
The government is also expected to revive the popular iZEV incentive program, which was suspended last year after exhausting more than $3 billion in funding. As first reported by CBC News, rebates are likely to return at previous levels.
Under the renewed program, buyers would receive up to $5,000 toward a new fully electric vehicle and $2,500 for a plug-in hybrid. Conventional hybrid vehicles will no longer qualify for rebates, though manufacturers will still be able to earn emissions credits by selling them.
The pause in incentives had drawn sharp criticism from car dealers, who said consumers delayed purchases while waiting for the rebates to return.
After slumping earlier in 2025, EV sales began to recover toward the end of the year. Data from Statistics Canada shows that electric vehicles accounted for 11.3 per cent of all new vehicle sales in November. Sales previously peaked at 18.29 per cent in December 2024, just before the iZEV program was put on hold.
With new emissions rules, restored consumer incentives, and major investments in charging infrastructure, Ottawa is betting its revamped strategy will keep Canada on track to cut transportation emissions without forcing consumers or automakers into a single path forward.
