The Canadian government has postponed its EV sales mandate by one year to review the program. Prime Minister Mark Carney on Friday pushed back the policy, which originally required 20% of all new vehicles sold in Canada by 2026 to be electric. The target will now be delayed by a year, while Carney initiates a 60-day review of the EV program to explore ways to improve its cost-effectiveness.
The decision is one of several actions the government revealed on Friday to support industries that were hit hard by tariffs imposed by U.S. President Donald Trump.
The government had outlined plans to reinstate the federal rebate for electric vehicle (EV) purchases, previously set at $5,000. However, the rebate was paused last January before its scheduled end in March.
Carney stated that Canadian automakers require increased financial flexibility to cope with the challenges posed by the continuing trade conflict with the United States. “We’re using this as an opportunity, as part of a broader strategy on climate competitiveness, to look at all our measures to help get greenhouse gases down in the key sectors,” he added.
Electric vehicle sales in Canada climbed to 18% of the market in 2024 but dropped by over 50% after the government rebate program was withdrawn.
The one-year suspension of the mandate follows months of pressure from the auto industry and a recent promise by the federal Conservatives to challenge the policy when Parliament reconvenes this month.
David Adams, president of Global Automakers of Canada, representing several carmakers, said the organization welcomes the federal government’s acknowledgment that consumer uptake of electric vehicles has fallen short of expectations held by both policymakers and the industry just a few years ago. The association said it supports the shift to electric vehicles but noted that progress depends on consumer readiness, with high costs and poor charging access slowing adoption.
In June, Environment Minister Julie Dabrusin indicated that the government intends to reinstate the consumer rebate program, though she did not provide an exact timeline.
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