Canada to repeal electric vehicle mandates

6 February 2026

The Government of Canada will repeal its Electric Vehicle Availability Standard (EVAS) that introduced a mandatory electric vehicle (BEV+PHEV) sales target schedule, where the EV percentage of all new light-duty vehicle sales was to increase every year from 20% in 2026 to 100% in 2035. The move—together with other elements of a new automotive policy—was announced by Canada’s Prime Minister Mark Carney speaking at a Martinrea International auto parts plant in Vaughan, Ontario.

The EVAS electric vehicle mandates will be replaced by sovereign (i.e., not aligned with US EPA regulations) GHG emission standards for model years 2027 to 2032 light-duty vehicles. These emission standards will be designed to force the adoption of electric vehicles—a 75% EV adoption rate is expected by 2035, while pursuing the “aspirational goal” of achieving a 90% EV adoption rate by 2040. These EV adoption targets will also be supported by new government subsidies for EV production, consumers incentives, and charging infrastructure.

Canada will review the GHG standards after five years to ensure they remain ambitious and aligned with Canada’s overall climate objectives.

Some of the key subsidy programs and other components of the automotive policy include:

• The Government of Canada will dedicate up to $3 billion (all amounts in CAD) from the Strategic Response Fund (SRF) and up to $100 million from the Regional Tariff Response Initiative to support investment in automotive manufacturing, including assembly and parts production.
• The government will launch a new, targeted five‑year EV affordability program to accelerate EV adoption by offering incentives to consumers and businesses for the purchase or lease of eligible cars with a final transaction value up to $50,000 (this transaction value eligibility cap will not apply to Canadian-made EVs). The incentives will gradually decrease every year, from $5,000 (2026) to $2,000 (2030) for BEVs and from $2,500 (2026) to $1,000 (2030) for PHEVs.
• The government will develop a new national charging infrastructure strategy. The strategy will include a $1.5 billion envelope at the Canada Infrastructure Bank and will seek to identify private sector companies to lead projects of national significance, building out charging infrastructure more quickly across the country.

Canada will maintain its counter tariffs on vehicles imported from the United States, including:

• a 25% tariff on fully assembled light vehicles imported into Canada from the USA that are not compliant with the CUSMA
• a 25% tariff on non-Canadian and non-Mexican content of CUSMA-compliant fully assembled light vehicles imported into Canada from the USA

Canadian–Mexican automotive trade continues to be tariff-free, consistent with CUSMA.

In January, Canada and China reached a Preliminary Agreement-In-Principle that will reduce tariffs on electric vehicles and Canadian canola exports. Under the agreement, Canada will initially allow in up to 49,000 Chinese EVs at a tariff of 6.1% on most-favored-nation terms.

Source: Government of Canada