LDN Business - Canada

Canada's Carney to delay EV mandate as country deals with Trump's tariffs

[September 06, 2025] By ROB GILLIES

TORONTO (AP) — Canadian Prime Minister Mark Carney is delaying a requirement for automakers to begin hitting minimum sales levels for electric vehicles next year as the sector deals with U.S. President Donald Trump's tariffs.

Former Canadian Prime Minister Justin Trudeau set the target, requiring that in 2026 20% of passenger vehicles sold should be zero-emission vehicles.

Removing the requirement comes as automakers absorb Trump's tariffs.

“We have an auto sector that because of the massive change in U.S. trade policy is under exteme pressure. We recognize that," Carney said.

“The EV mandate adds to the liquidity issues they have, the financial challenges these producers have. They've got enough on their plate right now so we are taking that off.”

The Canadian Vehicle Manufacturers' Association and others have been lobbying the government to scrap the EV mandate.

Flavio Volpe, Automotive Parts Manufacturers Associated president, noted the U.S. has ended EV incentives and industrial support and is going back to “pickup trucks and dinosaurs.”

Volpe said auto factories in Canada are geared to push product to the U.S., and Canada doesn't have much choice in the short term.

“I’m glad that we punted," Volpe said. “The White House has turned on the industry."

Carney also announced measures for workers and businesses in those sectors most impacted by the U.S. tariffs and trade disruptions. The government is also making employment insurance more flexible and with extended benefits.

“We can't rely on our most important trading partner like we once did,” Carney said.

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Prime Minister Mark Carney speaks at a press conference in Mississauga, Ont., on Friday, Sept. 5, 2025. (Sammy Kogan /The Canadian Press via AP)

Most imports from Canada and Mexico are still protected by the United States-Mexico-Canada trade pact, but Trump has some sector-specific tariffs that do apply for Canada despite the USMCA — known as 232 tariffs — which are having an impact on the Canadian economy and the auto sector in particular. There is the 50% tariff on steel and aluminum imports, for example.

The Big 3 American automakers, General Motors, Ford and Jeep-maker Stellantis, who all build in Canada, face the 50% tariff on steel and aluminum and a 25% tariff on parts and finished vehicles, with some exceptions for products covered under the USMCA.

Autos are Canada’s second-largest export and the sector employs 125,000 Canadians directly and almost another 500,000 in related industries. Volpe said Canadians buy about 2 million vehicles a year and make just under 2 million.

Carney said the government is also launching a new $370 million Canadian (US$268 million) production incentive to help Canada’s canola producers. China hit Canadian canola with a 75.8% tariff last month, a measure widely seen as a response to Canada’s 100% tariff on Chinese electric vehicles.

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