OTTAWA
— Less than two weeks after the Liberal cabinet was sworn in, the presidents of the five major automakers appealed directly to Prime Minister Mark Carney, requesting him to “urgently” repeal the federal zero-emission vehicle sales mandate, warning of industry-wide repercussions if it is not.
More than two months later, and with no public indication as to whether the government will listen, frustration is only building, says Brian Kingston, president and CEO of the
Canadian Vehicle Manufacturers’ Association, which sent the May 26 letter and represents Ford, General Motors, and Stellantis.
The letter was signed by Ford Canada CEO Bev Goodman, General Motors Canada President Kristian Aquilina, Honda Canada President and CEO Dave Jamieson, as well as Stellantis Canada CEO Jeff Hines and Toyota Canada President and CEO Cyril Dimitris.
“If the mandate is not urgently repealed, it will inflict serious damage on automakers, the dealership network, and the hundreds of thousands of Canadians employed in the sector,” the letter reads.
Kingston said the fact that all five CEOs signed their names was noteworthy and speaks to how pressing they view the matter.
“When all five CEOs of the (original equipment manufacturers) that build and employ Canadians write in on a single issue, that signifies the level of urgency regarding the (electric vehicle) mandate.”
A response from the Prime Minister’s Office has not yet been returned. Back in July, Carney met with several of the auto CEOs to discuss the ongoing trade war with U.S. President Donald Trump, who has targeted the auto industry with tariffs.
During the meeting, they raised the need to revoke the mandate.
In the private letter, which was sent to other ministers and government officials, and released to National Post under federal access-to-information legislation, the five automakers outline their commitments to electrification and cite the “tens of billions” of investments announced in Canada.
It points out that Canadians have access to more than 100 different types of zero-emission vehicles and that Transport Canada’s figures show the availability of these vehicles to be “meeting or exceeding” consumer demand.
The letter states that despite these efforts, electric vehicle sales have plummeted, referencing the latest available Statistics Canada figures for March, which showed sales fell to around 6.5 per cent of total vehicle sales.
In the first quarter of this year,
Statistics Canada recorded zero-emission vehicle sales
in Canada, representing 8.7 per cent of new vehicle registrations, down 23 per cent from the previous year.
The CEOs said the drop was “in direct response” to the federal and provincial governments either “weakening or eliminating purchase incentive programs that had been supporting demand.” Ottawa ended its program back in January, as did Quebec, which has since introduced a rebate.
Flavio Nienow, a
spokesman for Transport Canada, the department responsible for developing the rebate, said in a statement that the government “
understands that the higher purchase price of (electric vehicles) remains a key barrier to mass zero-emission vehicle adoption.”
Laura Scaffidi, a spokeswoman for Transport Minister Chrystia Freeland, said the government was looking at ways to reintroduce a rebate of up to $5,000, but did not provide a timeline.
In their letter from May, the CEOs cast doubt on the ability of a new rebate to cause electric vehicle sales to make a turnaround, citing other challenges such as “natural consumer demand,” as well as the lack of infrastructure and challenges around affordability and slow adoption by commercial and government sectors.
These factors combined “make the current targets unrealistic and unattainable.” The letter requests that the mandate be repealed, given there was “no longer a pathway” to reach its first target of seeing 20 per cent of new vehicle sales be zero-emission vehicles by 2026.
Transport Canada defines a zero-emission vehicle as a fully electric, plug-in battery hybrid, or one powered by hydrogen fuel cells.
The mandate, which the federal government formalized in 2023 to reduce greenhouse gas emissions within the transportation sector, sets out sales targets companies must hit, beginning with 20 per cent in 2026 and then rising to 60 per cent by 2030 before hitting 100 per cent by 2035.
“Given the impending 20 per cent requirement for 2026, the federal mandate is already forcing automakers to either limit combustion engine (ICE) and hybrid vehicle sales in Canada, or purchase credits from automakers like Tesla that do not produce vehicles in Canada,” the letter reads.
It warns that the regulation would result in lower vehicle sales and fewer jobs in the sector and higher prices for consumers.
“This will undermine consumer affordability and choice at a time of rising costs, limited demand, and growing uncertainty about infrastructure readiness.”
It argues that existing regulations for greenhouse gas emissions would drive the transition to electric vehicles and provide more flexibility.
Environment Minister Julie Dabrusin and other ministers have been meeting with industry to discuss their concerns, with Dabrusin’s office saying it was exploring “flexibility.”
Spokeswoman Jenna Ghassabeh reiterated that position in a new statement, saying the government was engaging with industry to ensure measures “reflect times we are in.”
Kingston, who met with Dabrusin last month, said the minister appears committed to the policy.
He said some at Environment Canada have been “pushing back” against their concerns that the matter is urgent.
“We need a clear public signal that it will be repealed, or automakers are going to continue to have to make disastrous choices, which is restricting vehicle sales and buying credits from Tesla.”
National Post
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