On September 5, 2025, Canadian Prime Minister Mark Carney made a decision that sent ripples through Canada’s auto sector and environmental circles alike: the federal government would delay its much-debated electric vehicle (EV) sales mandate, pushing back the requirement that 20% of new vehicles sold in 2026 be zero-emission. The move, announced at a press conference in Mississauga, Ontario, comes in response to mounting pressures from both economic headwinds and political crosswinds—chief among them, the impact of U.S. President Donald Trump’s tariffs and a cooling North American EV market.
The original mandate, a signature policy of former Prime Minister Justin Trudeau’s Liberal government, was designed to escalate each year until 2035, when all new light-duty vehicles sold in Canada were to be electric or plug-in hybrids. The plan was ambitious, aiming to put Canada on the map as a leader in clean transportation. But as Carney explained, the realities facing automakers demanded a pause. "They've got enough on their plate right now. So we're taking that off," he said, acknowledging the immense pressure the sector faces due to the “massive change in U.S. policy.” (CBC News)
This delay, as Carney emphasized, is not a full repeal. Instead, it launches a 60-day review of the EV policy, starting immediately, with the goal of “finding future flexibilities and ways to reduce costs.” The review will consider potential amendments to annual sales targets, including the 2035 goal, and will explore possible additional flexibilities in the approach. The government has also pledged further measures to support workers and businesses in industries most affected by the U.S. tariffs and trade disruptions (CBC News, The Canadian Press).
Automakers, who have lobbied for relief for months, received the news with measured relief. Brian Kingston, president of the Canadian Vehicle Manufacturers’ Association, called the pause “an important first step,” arguing, “The EV mandate imposes unsustainable costs on auto manufacturers, putting at risk Canadian jobs and investment in this critical sector of the economy.” (CBC News) David Adams, president of the Global Automakers of Canada, echoed that sentiment, saying, “Our members are fully committed to the transition of their product portfolios to electrified transportation and this is the future of our sector, however that transition can only happen as quickly as consumers are willing to move.” (Automotive News Canada)
Those consumer hesitations are not just theoretical. When the federal government paused its $5,000 EV rebate program in January 2025, EV sales in Canada, which had reached as high as 18% of the market in 2024, fell by more than half. As of June 2025, Statistics Canada reported EVs accounted for just under 8% of all new vehicle sales. The government has promised to bring back consumer rebates for EVs, but no timeline has been set—much to the frustration of automakers and customers alike (Automotive News Canada, The Canadian Press).
The political response has been as divided as the country’s geography. Conservative Leader Pierre Poilievre wasted no time labeling the move a “clumsy retreat,” warning that “businesses who would otherwise consider investing in automaking here in Canada will have to put that investment on hold while Mark Carney dithers for another year.” (CBC News) The Conservatives, who have been openly critical of the mandate, had pledged to target it when Parliament returns this fall.
Environmental groups, meanwhile, were quick to denounce the delay. Keith Stewart, a senior energy strategist with Greenpeace Canada, didn’t mince words: “What was the point of electing Mark Carney when we get Pierre Poilievre’s climate policy? We should be aligning with Europe, which is doubling down on renewable energy and electric vehicles, rather than bowing before Trump’s attack on people and planet.” (CBC News, The Canadian Press) Rick Smith, president of the Canadian Climate Institute, called the announcement a “missed opportunity” and warned it “creates new uncertainty and undermines smart, low-cost climate policy in a critical sector.”
Carney, for his part, insisted the government remains committed to climate action, telling reporters in French that the fight against climate change is a “moral obligation.” He promised to maintain industrial carbon pricing and develop a “political strategy for climate competitiveness, and a strategy for nature,” but emphasized that “results as it relates to greenhouse gas emissions” would be the focus. (The Canadian Press)
Canada’s EV mandate was always more than a technical regulation—it was a flashpoint in the country’s broader debate over how to balance economic competitiveness, environmental responsibility, and the realities of international trade. The Trudeau-era policy set a high bar, but the landscape has shifted. The passage of what Trump called his “big, beautiful bill” in the U.S. canceled the $7,500 electric vehicle tax credit by the end of August, hitting the American ZEV market hard. In Canada, the absence of federal rebates has had a similarly chilling effect, especially outside the two provinces leading the charge: British Columbia and Quebec. In 2024, B.C. and Quebec accounted for nearly three-quarters of all new EVs registered nationwide, with Quebec hitting an impressive 31% of new vehicle sales as EVs, while no other province even reached 10%. (The Canadian Press)
South of the border, the situation is equally fraught. General Motors, facing sluggish demand, temporarily halted production of the GMC Hummer EV and Cadillac Escalade IQ at its Detroit-Hamtramck “Factory Zero” plant in early September—a stoppage expected to last until at least October 6, 2025. Production of the Cadillac Lyriq and Vistiq will pause for one week each in October and November, and for all of December in Tennessee, with reduced shifts into 2026. Even the Kansas City plant, set to launch the new Chevrolet Bolt EV later this year, will operate on a single shift indefinitely. (Automotive News Canada, Reuters)
Back in Canada, the debate over tariffs and global competition looms large. The federal government imposed tariffs on cheaper Chinese EVs last year in step with the U.S., while China retaliated with tariffs on Canadian canola. Carney declined to commit to repealing the tariffs on Chinese EVs, citing the need to protect domestic industry from unfair competition. Poilievre, too, voiced opposition to lifting the tariffs, arguing that Chinese EVs pose both economic and security risks. (The Canadian Press)
For now, the future of Canada’s EV transition hangs in the balance. The 60-day review promises to chart a new course—one that, in Carney’s words, will “bring more affordable electric vehicles to Canadians” and “help get greenhouse gases down in the key sectors.” Whether that path will satisfy the competing demands of industry, environment, and politics remains to be seen, but one thing’s for sure: the road to electrification just got a little longer—and a bit bumpier.
With the government’s review underway and stakeholders from every corner weighing in, the coming months will be pivotal for Canada’s auto sector and climate policy alike.
