Prime Minister Mark Carney announced Friday that the federal government’s 2026 electric vehicle (EV) sales target will be paused, launching a comprehensive review of the mandate as part of a broader strategy to support Canadian industries affected by new U.S. tariffs.
Speaking in Mississauga, Ontario, following a two-day cabinet retreat focused heavily on economic planning, Carney introduced a “sector-based” approach to safeguard key industries impacted by trade tensions with the United States under President Donald Trump.
“Our close relationship with the U.S. — long a source of strength for Canadian industries — has now become a vulnerability in some sectors,” Carney said. “This disruption requires a bold, new direction.”
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As part of the plan, the target requiring 20% of all new light-duty vehicle sales in Canada to be zero-emission by 2026 will be put on hold. A 60-day review of the EV mandate will begin immediately to assess its alignment with broader economic and environmental policies.
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When asked whether the EV targets could be scrapped entirely, Carney avoided a direct answer, instead noting that automakers are currently under significant pressure. “We’re examining how the EV mandate interacts with clean fuel regulations, investment tax credits, and our broader trade policy. This government is focused on achieving real results,” he said.
The 2035 goal of reaching 100% zero-emission vehicle sales remains under review, particularly as automakers raise concerns about the feasibility of the timeline amid U.S. trade disruptions and supply chain challenges.
This latest move represents a continued pivot from the climate policies of former Prime Minister Justin Trudeau. Earlier this year, Carney eliminated the federal consumer carbon tax.
In Ottawa, Conservative Leader Pierre Poilievre criticized Carney for walking back policies he once supported. “He’s admitting the Conservatives were right — just like we were on the carbon tax,” Poilievre said. “But instead of clarity, he’s created more uncertainty. Businesses looking to invest in Canada’s auto sector are now left in limbo.”
Alongside the EV mandate pause, Carney also introduced a new “Buy Canadian” policy. Starting immediately, federal institutions will begin aligning procurement and funding to prioritize Canadian-made goods and services, with full implementation targeted for spring 2026.
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