Canada: Light-Duty Vehicles

Tier 2 Standards

The On-Road Vehicle and Engine Emission Regulations (SOR/2003-2) [3289] aligned emission certification requirements for Light-Duty Vehicles, Light-Duty Trucks and Medium-Duty Passenger Vehicles with those of the US EPA Tier 2 program beginning January 1, 2004.

Manufacturers certify every vehicle to one of eleven “bins”, each of which contains standards for NOx, NMOG, CO, formaldehyde and PM (see table in US section). The manufacturers’ choices of bin within which to certify each vehicle is limited by the obligation to comply with fleet average NOx emissions standards.

Based on vehicle sales from each bin, a company calculates a sales-weighted fleet average NOx value for each model year. The emission bins, fleet average NOx emission standards, timing of phase-ins and methods of calculating fleet average NOx values are consistent with the US Tier 2 emission program. As in the US program, the Canadian standards have separate fleet average requirements for LDV/LLDTs and HLDT/MDPVs until the end of the 2008 model year. However, there are no separate distinctions between Tier 2 vehicles and interim non-Tier 2 vehicles as in the US program. All Canadian Tier 2 LDV/LLDTs must meet one fleet average requirement and all HLDT/MDPVs another, as outlined in Table 2.

While this results in an upper fleet average LDV/LLDT NOx limit that is equal to that obtained for the US Tier 2 program, there is a small difference for 2004-2006 HLDT/MDPVs fleet average NOx limit for Canada. For the US 2004-2006 model year HLDT/MDPVs, a significant proportion of sales do not have to meet Tier 2 or interim non-Tier 2 fleet average NOx requirements. The only stipulation is that they meet bin 10 requirements if they are HLDTs or bin 11 requirements if they are MDPVs. The Canadian regulations require that all HLDT/MDPVs meet a fleet average NOx requirement during this period.

As in the US Tier 2 program, by 2009 when the standards are fully phased in, a company’s combined fleet of light-duty vehicles, light-duty trucks and medium-duty passenger vehicles will be subject to a single fleet average NOx emission standard of 0.07 g/mile, corresponding to the NOx standard in bin 5. A company can, in any model year, generate NOx emission credits by achieving a fleet average NOx value that is lower than the standard. These credits can be used in a subsequent model year to offset a NOx emissions deficit (the fleet average NOx value exceeds the standard). A deficit must be offset no later than the third model year following the year in which it is incurred. NOx emission credits may also be transferred to another company.

In order to allow some flexibility in the regulations to account for market differences between Canada and the US, the Canadian regulations allow a company to exclude from the fleet average compliance requirement US certified vehicles that are sold concurrently in Canada and the USA. For vehicle models certified to emission bins having a NOx standard higher than the fleet average, this is not allowed if the total number of vehicles of the particular model sold in Canada exceeds the number sold in the USA. If a company chooses this option, they must include all eligible vehicles in that group, they cannot generate emission credits or transfer credits to another company in that model year and they forfeit any emission credits obtained in previous model years. In all cases, fleet average emissions must be reported at the end of the year.

Tier 3 Standards

The 2015 amendments to the On-Road Vehicle and Engine Emission Regulations [3290] harmonized Canadian emission standards with the US EPA Tier 3 program, starting with the 2017 model year.

Most of the Tier 3 provisions, including the NMOG+NOx certification bins and fleet average standards, PM standards and evaporative emission standards are harmonized with the US Tier 3 requirements. However, differences exist in the phase-in of the standards. For instance, during the period of 2017-2020, manufacturers may choose alternative phase-in percentage schedules for PM and for evaporative emissions.

Importantly, the principle of concurrent sales applies to Tier 3 vehicles, meaning that every vehicle of a specific model year that is covered by a US EPA certificate and bears the US emission label may conform to the certification and in-use standards referred to in the EPA certificate, instead of the Canadian Tier 3 standards.

The Tier 3 regulations also include amendments to the Sulphur in Gasoline Regulations that reduce the allowable annual average sulfur content of gasoline from 30 ppm to 10 ppm, beginning in 2017, aligning Canadian fuel standards with the United States.

Greenhouse Gas Emission Standards

In 2010.10, the Government of Canada published the Passenger Automobile and Light Truck Greenhouse Gas Emission Regulations (SOR/2010-201) establishing GHG emission standards for 2011 to 2016 model year light-duty vehicles (LDVs) [3532]. These regulations aligned with US EPA standards and required importers and manufacturers of new vehicles to meet increasingly stringent fleet average GHG emission standards. In 2014, the Regulations were amended to establish GHG emission standards for the 2017 to 2025 model years, in alignment with revised US EPA standards [3531]. These Regulations also adopted an incorporation by reference approach to minimize the regulatory burden with continuously evolving US EPA regulations.

After the US’ 2018 mid-term evaluation and the resulting updated final rule in 2020, Canadian standards consequently became less stringent given the US GHG emission standards were incorporated by reference into the Regulations. In 2021.02, Canada completed its own efforts to assess the impact of the 2020 US Final Rule and the feasibility of establishing more stringent fleet average GHG emission standards in Canada relative to those in the US Final Rule [6363]. However, the US EPA released a new Final Rule later that year, increasing the stringency by about 10% for model years 2023 and 2026 and by at least 5% for model years 2024–2025. Prior to the publication of the 2021 EPA Final Rule, Canada announced that it would work to align with the most stringent GHG emission standards in North America post-2025, whether at the United States federal or state level [6364][6365][6357].

In 2023.12, GHG Regulations were amended to incorporate a mandatory zero-emission vehicle (ZEV) sales target of 100% of new LDV sales by 2035 [6120].

While Canada has the Motor Vehicle Fuel Consumption Standards Act (R.S.C., 1985, c. M-9) that allows the Minister of Natural Resources to recommend making regulations prescribing a fuel consumption standard for any prescribed class of motor vehicle for any year, the primary means of regulating the fuel consumption of light-duty vehicles is through the above discussed greenhouse gas emission regulations [6366].