Pausing the EV sales mandate might not be bad for the climate

The federal government has paused a policy that would require automakers to reach certain targets for sales of zero-emissions vehicles, including EVs and plug-in hybrids. It will also spend 60 days reviewing the policy, called the Electric Vehicle Availability Standard, the government announced on Friday.

Is that a big setback for the climate?

Not necessarily, say climate policy researchers and representatives of the EV industry — what matters is where we go from here. And they say the review could result in tweaks to the policy that are positive for both consumers and the climate.

The federal government had planned to require 20 per cent of new light-duty vehicles sold in 2026 to be zero-emissions, including EVs and plug-in hybrids, on the way to a target of 100 per cent in 2035.

The goal was to improve the supply and choice of EVs available to consumers and reduce wait times. Research shows this should also lower the price of EVs and significantly decrease transportation emissions more effectively and at a lower cost than other policies, such as funding EV charging infrastructure and rebates for people buying EVs.

WATCH | Carney pauses EV mandate:

As part of a new funding strategy announced Friday, the federal government announced plans to pause the electric vehicle mandate and launch a 60-day review of the Trudeau-era policy. The prime minister said the ongoing trade war has increased pressure on the auto industry.

Sales mandates like this are more effective at cutting emissions and cost effective than rebates, according to research by Jonn Axsen, a professor who studies sustainable transportation at Simon Fraser University, including policies to encourage the transition to EVs. Mandates send a "stronger long-term signal to automakers that this is where Canada is going," he said.

That allows the industry to plan ahead and invest in research and development and new production lines, which can take four or five years to set up.

"It is saying, 'Look, no doubt 2035 is going to be 100 per cent zero emission vehicle sales, so start today — figure it out,'" he said

Given that, he said, slight changes in the short term shouldn't necessarily have an impact.

The federal government now says the policy won't apply to 2026 models. It announced the delay as part of measures to help sectors most affected by U.S. President Donald Trump's tariffs, including the auto sector. Automakers had lobbied to repeal the EV mandate.

Axsen says the thing that will make the biggest difference to meeting our climate goals is getting to 100 per cent zero-emissions vehicles in 2035. As long as that remains, he said, "the whole transition could survive playing around with 2026, 2027."

During its 60-day review of the policy, the government says it will "consider potential amendments to the annual sales targets, including the 2035 goal, and will explore additional flexibilities."

In addition to regulatory adjustments, the government said it will "explore options to bring more affordable electric vehicles to Canadians."

Some clean energy think-tanks have already proposed tweaks to the policy that could provide more flexibility while bringing cheaper EVs to Canada — and helping bring down carbon emissions.

Clean Energy Canada and the Pembina Institute both suggest giving carmakers more credits toward the EV sales target for things like selling cheaper vehicles or adding more charging infrastructure, along with re-evaluating the 100 per cent tariffs on Chinese-made EVs.

The Pembina Institute also suggests that Canada could harmonize its regulations with Europe to allow European EVs to be sold in Canada.

Daniel Breton, president and CEO of Electric Mobility Canada, said that's something the federal government is starting to look into. He had been recommending adding flexibility to the policy to "bend it instead of break it" amid pressure to scrap it altogether.

His group represents the EV industry in Canada, including EV makers Tesla and Rivian, Nissan Canada, truck and bus manufacturers, EV charging providers, mining companies and research centres.

Breton says the 60-day pause is "manageable" but said Canadians need to know about the government's decision as quickly as possible "so we can have some investment certainty for 2026."

Breton says he believes the regulation is necessary to push the auto industry to move faster toward EVs given the speed at which the transition is happening in the rest of the world. "If we don't get on board," he said, "we'll end up losing our jobs in Canada."

WATCH | B.C. staying the course after federal government pauses EV sales mandate

Ottawa is rolling back an electric vehicle mandate that was supposed to be implemented next year. It set minimum sales targets for electric and plug-in hybrid vehicles. The federal government's "pause and review" approach has some in the industry wondering what's next. But as Caroline Chan reports, the B.C.government seems to be staying the course for now with their own EV mandate.

He also says the policy is needed to bring affordable EVs in Canada. He pointed to EV sales mandates in B.C. and Quebec, which he credits for making more EVs and a wider range of models available in those provinces compared to the rest of the country. Meanwhile, he said, a similar phenomenon is happening worldwide.

"The most affordable entry-level electric cars coming to market are not coming to Canada," he said. Instead, he says they are going to markets with more aggressive sales mandates and strict emissions regulations. "Without the regulation, we won't get those affordable electric cars," he said.

He said EV sales targets make it worthwhile for foreign manufacturers to invest in getting their cars certified and available in Canada.

Rick Smith, president of the Canadian Climate Institute, said he's experienced that first-hand, as he's currently shopping for an EV in Toronto. "Quite often, dealerships don't have that many or [say that] we're going to wait a couple of months to get them," he said. "Canada does not have the range of affordably priced electric vehicles that exist in other countries."

He said it "remains to be seen" whether the government's pause and review will end up being good or bad for the climate. But he says the end of the review could be a good opportunity for the government to reiterate the importance of electrifying Canada's cars and trucks for both the climate and for our auto industry's ability to compete with other countries.