The federal Liberal government has pushed a pivotal decision on the future of Canada's electric vehicle sales mandate into 2026, a timeline that has disappointed an auto industry urgently seeking regulatory clarity.
Decision on 2035 "Ban" Pushed to Next Year
At the heart of the uncertainty is the regulation requiring all new light-duty vehicles sold in Canada to be zero-emission by 2035. The policy, which sets progressively rising annual sales targets for manufacturers, is now under a 60-day review ordered by Prime Minister Mark Carney in September. This review paused the 2026 target, which would have mandated that 20% of new vehicle sales be zero-emission.
Keean Nembhard, a spokesman for Environment Minister Julie Dabrusin, stated that the government will "have more to share in the new year" regarding the review's outcome and the policy's future. This delay extends beyond the "coming weeks" timeline promised in the Liberals' November 4 budget.
Automakers Voice Frustration Over Prolonged Uncertainty
The automotive industry has reacted with frustration to the postponed announcement. Brian Kingston, president and CEO of the Canadian Vehicle Manufacturers' Association (representing Ford, General Motors, and Stellantis), expressed clear disappointment.
"We're very disappointed that there has not been a decision communicated to the auto industry, and we've been urging the federal government and the prime minister to move quickly on this and make a decision," Kingston said. He warned that the ongoing uncertainty forces manufacturers to make costly production and inventory decisions for the 2027 model year without clear rules.
Automakers spent much of 2025 urging the Carney government to repeal the mandate, citing slumping EV sales and pressures from the Canada-U.S. trade war. Kingston highlighted that to meet the 2026 target, companies might need to spend billions to buy regulatory credits from companies like Tesla or restrict sales of gasoline and hybrid vehicles.
Stakeholders Propose Compromise: Scrap the 100% Target
While automakers advocate for repeal, other groups involved in the government's consultation have proposed a middle path: maintain the regulation but abandon the 100% sales target for 2035.
Electric Mobility Canada, a national EV industry association, recommended the government "eliminate" the 100% target to "remove a political flashpoint." Similarly, the think-tank Clean Energy Canada suggested lowering the 2035 goal to between 90 and 95 percent. They argued this could maintain public support by removing the perception of a "ban" on gas-powered cars while still achieving major emission reductions.
This approach mirrors actions taken by Quebec and British Columbia, which have their own provincial mandates. Quebec revised its 2035 target down to 90% and expanded its definition of zero-emission vehicles. B.C. has stated it will align its policy with the eventual federal framework.
The federal government's coming decision will signal the direction of Canada's clean transportation strategy under Prime Minister Carney, balancing climate ambitions with economic and industrial realities.
