Tucked into the government’s signature tariff relief package announced Friday was a pause on Canada’s Electric Vehicle Availability Standard until 2027 and a 60-day review of the policy.
The move certainly hasn’t gone unnoticed, with climate groups worrying this new Liberal government might abandon its climate efforts policy by policy while American automaker lobbyists call for the standard’s full repeal.
For Canadians who believe that shifting to clean energy is generally a good thing, the situation boils down to two questions in need of clear answers.
One is why this particular policy is the solution we need. And the second is, if we keep it, whether and how the policy should change in a new political environment.
Since the first question is existential, let’s start with why Canada’s EV Availability Standard needs to stay in place.
The EV standard has always been first and foremost a policy for consumers. As the regulation ramps up requirements on automakers to offer more electric vehicles over time, carmakers are incentivized to produce lower-priced models to meet more of the market.
One study found the policy would reduce the average price of electric vehicles by 20 per cent, while another showed that jurisdictions with EV mandates see more EV models offered than those without (like the new Kia EV5 coming to Canada but not the U.S.).
Now, some have suggested that Canada should merely use another policy, its U.S.-aligned tailpipe emission standards, to get cleaner cars on the road instead. The problem with that idea is the perennial problem of 2025: Donald Trump, who just introduced a bill to scrap these Biden era standards and is also going after the EPA’s authority to regulate greenhouse gas emissions altogether. There will very likely not be any U.S. standards to align with.
Canada’s EV Availability Standard is the only policy Canada has to regulate cleaner cars on the books post-2026.
Other ideas that have been put forward — that we should just invest in public EV charging or include conventional hybrids in the policy — fail to replicate the mandate’s transformational nature.
Charging is important, but it’s also a non-issue for most EV drivers. The vast majority of charging already happens at home where it’s cheapest and most convenient and Canada’s public network is growing rapidly: over the last year, the network grew by about 25 per cent, with tens of thousands of additional chargers already federally funded.
In fact, one of the best ways to support private sector investment in Canada’s public charging network is to keep the EV mandate in place. Utilities integrate EV targets into their electricity demand projections, while charging station providers use them to determine whether the business case will pencil out if they invest in charging in certain areas.
Indeed, a recent PBO report found that the policy would get us almost entirely to where the charging network needs to be by 2030 simply by unlocking private sector investment.
As for conventional hybrids, they are not a long-term climate solution, nor where the world is headed. As EV adoption stumbles in North America, it’s accelerating globally, with more than 1-in-4 cars sold this year projected to be electric worldwide.
According to Electric Mobility Canada, a Honda Civic Hybrid driven in Quebec would emit 365 times as much CO2 per kilometre as a Hyundai Ioniq 6 EV for most of its lifespan (including manufacturing emissions).
In short, Canada needs and benefits from its Electric Vehicle Availability Standard. That doesn’t mean it can’t adapt to a new reality, however.
Prime Minister Mark Carney has made clear that one of his top priorities is “Bringing down costs for Canadians and helping them to get ahead.” A thoughtful retooling of the program could deliver on this promise, significantly easing the second-biggest household cost Canadians endure, transportation, by unlocking money-saving EVs.
In addition to any adjustments to the targets themselves, other thoughtful tweaks would provide automakers secondary pathways to satisfy the requirements.
For example, carmakers could receive extra credits under the system for selling EVs below a price point of $40,000, the maximum price most Canadians wish to spend on a new car. Many of these vehicles already exist, being sold in markets such as Europe. Similarly, carmakers could also gain credits for offering zero-interest financing on new EVs.
There are, of course, other tools the government should explore to help improve Canada’s uncompetitive EV market, including adopting European safety standards to open the gate for European models in Canada, reintroducing EV incentives to lower upfront costs, and yes, lowering Canada’s 100 per cent tariff on Chinese EVs in a way that still balances protection for the auto industry with a healthier car market for consumers, much as Europe has done.
But whatever we do, let’s keep our hands on the wheel of our own car market.
This post was co-authored by Joanna Kyriazis and first appeared in the Toronto Star.
