VAUGHAN: Canadian Prime Minister Mark Carney on Feb. 5 unveiled a new national automotive strategy in Vaughan, saying Canada will “build the cars of the future and sell them to the world” as the industry shifts toward lower-emission vehicles, advanced manufacturing and greater connectivity. Carney announced the plan at auto-parts maker Martinrea, describing the auto sector as a major employer and export engine seen as vulnerable to trade disruption.
The federal plan includes up to C$3 billion from the Strategic Response Fund and up to C$100 million from a Regional Tariff Response Initiative to help manufacturers retool, expand capacity and diversify beyond existing markets. The government also pointed to the use of tax measures, including a productivity super-deduction and reduced corporate tax rates for zero-emission technology manufacturers, as tools to spur investment in clean technologies and vehicle production.
A central measure is a five-year, C$2.3 billion Electric Vehicle Affordability Program to lower purchase and lease costs for consumers and businesses. The program offers incentives of up to C$5,000 for battery-electric and fuel-cell electric vehicles and up to C$2,500 for plug-in hybrids. Eligible vehicles must have a final transaction value up to C$50,000 and be manufactured in Canada or in countries that have free-trade agreements with Canada, while Canadian-made vehicles are exempt from the price cap.
The strategy also puts C$1.5 billion toward expanding charging through the Canada Infrastructure Bank’s Charging and Hydrogen Refuelling Infrastructure Initiative and commits the government to develop a national charging infrastructure strategy. On Feb. 10, the government announced more than C$97 million for 155 clean transportation projects nationwide, including C$84.4 million for 122 projects expected to install more than 8,000 chargers, building on more than 30,000 chargers installed through a federal infrastructure program.
Emissions standards replace EV availability rule
Alongside the incentive and infrastructure push, the government said it will repeal the Electric Vehicle Availability Standard and replace it with more stringent greenhouse gas emissions standards for model years 2027 through 2032. Officials said the standards will be technology-neutral, allowing manufacturers to use a range of approaches in the early years while requiring a larger share of electric vehicles over time. The government said the framework seen for 2035 is 75% electric vehicle sales, rising to 90% by 2040, with a review planned after five years.
Carney linked the strategy to trade pressures, citing U.S. tariffs and the tightly integrated North American supply chain. He said the average vehicle is built from parts that can cross the Canada–U.S. border multiple times, and he pointed to the scale of exports to the United States, including most finished vehicles and a majority of auto parts. The government said it will keep counter-tariffs on U.S. auto imports and modernize the automotive duty remission framework, including consultation on a more performance-based system and a proposed tradeable import credit approach.
Workforce and supply chain focus
The plan includes workforce measures intended to support workers and firms during retooling and technology shifts. The government announced a Work-Sharing grant and a new workforce alliance aimed at addressing training needs and easing production bottlenecks. It also said an automotive task force will coordinate actions with Ontario, with a focus that includes skills development and strengthening supply chains tied to next-generation vehicle manufacturing.
Carney said the strategy is designed to protect jobs while positioning Canada as a competitive location for building next-generation vehicles and components for domestic buyers and overseas markets. The government highlighted Canada’s trade agreements with 51 countries and access to 1.5 billion consumers, casting export growth as part of the sector’s future alongside investment, emissions rules, charging expansion and consumer affordability measures.