Sidney Ko

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Aya Dufour

Barbara Patrocinio

The federal government announced a suite of new electric vehicle policies Thursday, including the reintroduction of the popular rebate program and the elimination of the EV sales mandate in favour of new emission standards.

Speaking at an auto parts manufacturer in Woodbridge, Ont., Prime Minister Mark Carney said Ottawa is restoring the rebate program with $2.3 billion to help Canadians cover the cost of a new EV, and $1.5 billion for EV infrastructure like charging stations.

Government officials at a technical briefing Thursday were unable to say exactly what impact these new measures will have on Canada's overall emissions, and promised to publish modelling in the months to come.

Ottawa's target is to have a 75 per cent EV adoption rate by 2035 and a 90 per cent rate by 2040. The sales mandate Carney is eliminating would have required that 100 per cent of new passenger vehicle sales be electric by 2035.

Ottawa will offer $5,000 toward the cost of a new EV and $2,500 toward plug-in hybrids. Those rebates will decrease every year until they're phased out after 2030 — or until the money for the program runs out.

The previous rebate program lasted six years and ended in January 2025 when funds dried up months ahead of schedule.

The government says it is hoping the program will help put 840,000 new EVs on the road.

The rebates will only apply to vehicles costing less than $50,000 and imported from a country with a free-trade agreement with Canada — meaning the Chinese EVs Ottawa is allowing into the country won't be eligible for the rebates.

Canadian-made EVs, which right now include only the Dodge Charger and the Chrysler Pacifica, are exempt from the $50,000 cap.

Still, the government concedes it cannot yet say what the overall impact of the strategy will be on Canada’s total carbon emissions. “In terms of our overall climate policy, as I say, in the coming weeks, we'll be releasing our climate competitive strategy, so we'll have more to say at that point,” Carney said. “This all integrated. Reinforcing incentives for consumers, building the clean auto supply chain, doubling the size of our clean grid. All of that works together,” he added. 

The policy choice drew praise from Flavio Volpe, who said Ottawa is finally using the size of the Canadian market itself as a lever.

“The Canadian market has more buyers than units we produce,” Volpe said in an interview. “If Canadians benefit from buying Canadian-built vehicles, that helps companies change their production programs, bring higher-technology vehicles here, and make them available to Canadians.”

"Yes, I love this policy," he said, when asked how big of a difference this would actually make in terms of affordability.

He rejected the idea that a $5,000 incentive is too modest to move the market, arguing the timing now works in Ottawa’s favour.

“It wouldn’t have been enough 10 or 15 years ago, when EVs were $100,000 or more,” he said. “But the vehicles being launched this year, next year and the year after are $40,000 to $50,000 models. Taking 10 per cent off the price is meaningful, especially in an affordability crisis.”

He pointed to a period roughly 15 years ago when about half of Japanese automakers’ Canadian production and roughly a third of U.S. automakers’ production was sold domestically.

“That kind of balance strengthens the whole system,” he said.

Premier Doug Ford welcomed Ottawa’s new national auto strategy as a necessary response to U.S. President Donald Trump’s tariff threats, even though he was absent from Carney’s announcement.

The prime minister was quick to brush aside any suggestion of discord, saying he has been in close contact with the premier in the lead-up to the announcement.

“The premier will speak for himself,” Carney said in response to a question from 

, adding that he and Ford have spent “a lot of quality time together” in recent days, including meetings and discussions at Ford’s home.

Carney said the two spoke at length the day before the announcement and again earlier this week.

“There’s only so much time I want to spend with the premier in my pocket,” Carney joked, before stressing that the federal and Ontario governments are “very aligned on these measures.”

Premier Ford’s team released a statement supporting the plan, but didn’t say why the premier wasn’t invited to join the prime minister.

“President Trump is doing everything he can to move Canadian auto jobs south of the border,” Ford said in a statement, casting the strategy as a defensive move to protect Ontario’s long-standing role at the heart of Canada’s auto industry. “For the past 100 years, Ontario’s auto sector has been the economic engine of Canada.”

Ford said the province will work alongside industry, labour unions and the federal government to ensure that legacy continues, signalling alignment with Ottawa’s broader strategy despite his government’s long-running criticism of federal EV mandates.

“I’m pleased to welcome and support the federal government’s new auto strategy,” Ford said.

Ontario has repeatedly urged Ottawa to scrap the mandate, arguing it made the province’s auto sector less competitive at a time when investment decisions are increasingly sensitive to cost and regulatory pressure.

EV sales goals still "aggressive," says industry leader

David Adams, CEO of Global Automakers of Canada, said the prime minister announcement today was “comprehensive” but the EV adoption goals are also seemingly “aggressive.”

“I think the important thing with these announcements is that there is ongoing dialogue and consultation with industry,” Adams said. “I think that’s the only way that we’re going to … work to try and achieve these emissions reductions.”

When asked about protecting existing manufacturing jobs in Canada, Adams said “we’ll see.”

He acknowledged the Carney's stated goal of protecting Canada’s manufacturing footprint and pointed out that the industry supports encouraging investment in Canada.

“A number of my members, they’re bringing in vehicles under the free trade agreements that Canada has negotiated,” he said.

Adams noted the challenges in the U.S. tariffs has forced the government to undertake these initiatives, but he remains optimistic that Canada will get back to a friendlier foot through the review of the Canada-United States-Mexico trade agreement (CUSMA), which is set to start later this year.

“We’re working together collaboratively as a North American region and not picking fights amongst ourselves, because that’s the only way,” he said.

The Conservative party struck a similar note, describing the prime minister’s goal of achieving 100 per cent EV adoption by 2035 as “unrealistic.”

“Forcing 100% of new vehicle sales to be electric by 2035, when EVs still represent a minority of sales, was unrealistic and created prolonged uncertainty for manufacturers and workers making long-term investment decisions,” said Conservative MPs Raquel Dancho and Kyle Seeback.

Dancho added the strategy basically sends up to 2.3 billion taxpayer dollars to the American auto sector.

"Just to be very clear, today is an excellent day for Donald Trump," she told reporters in West Block.

Senior executives from across Canada’s electric vehicle sector previously wrote a letter to Carney urging Ottawa to stay the course on the EV mandate.

“We understand that policies must evolve with changing realities. But evolution doesn’t mean retreat,” the letter reads. “Canada should stand firm [...] and provide clear direction.”

A flip-flop on the EV mandate policy would create regulatory uncertainty by undermining investor confidence, they warned, adding that this wasn’t only about climate, but industrial strategy at large.

Raymond Leury, president of the Electric Vehicle Council in Ottawa, said he’s pleased with the return of incentives and the $50,000 price cap that will help push prices down.

However, he believes that the biggest challenge is low EV supply, as car dealers often discourage customers from buying due to lower service revenue and limited availability.

He said manufacturers need to put in more effort in selling EVs in Canada.

“What matters is that there’s a mechanism to address the supply problem … whether we do that through a system where they have to sell a certain number of EVs or a system that’s based on tailpipe emissions,” Leury said.

With files from the Canadian Press and Barbara Patrocinio

*This story has been updated with comment from the Conservative Party.

Ottawa axes EV mandate, relaunches rebates program with new auto strategy

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