The Government of Canada has outlined a set of measures aimed at strengthening domestic electric vehicle (EV) manufacturing, supply chains, and supporting infrastructure as part of a broader industrial strategy for the automotive sector.
Canada’s automotive industry remains closely tied to US trade, with more than 90% of Canadian-made vehicles and 60% of Canadian-made auto parts currently exported to the US.
In response, the Canadian government is seeking to diversify markets and build a more resilient domestic automotive ecosystem, alongside the launch of a national electricity strategy intended to support clean, affordable, and reliable power generation.
As part of this approach, it’s introducing a new auto strategy focused on increasing domestic vehicle production and supporting the transition to electric vehicles. The strategy is intended to leverage Canada’s capabilities in advanced manufacturing, artificial intelligence, and clean energy to position the country as a competitive EV production hub.
Canada’s Prime Minister Mark Carney announced the following measures:
1. Investment in EV and automotive manufacturing
- Allocation of $3 billion from the Strategic Response Fund and up to $100 million from the Regional Tariff Response Initiative to support automotive manufacturing adaptation, expansion, and market diversification.
- Use of the Productivity Super-Deduction and reduced corporate tax rates for zero-emission technology manufacturers to encourage investment in EV-related manufacturing and clean technologies.
2. Emissions standards and technology flexibility
- Introduction of strengthened greenhouse gas emission standards targeting 75% EV sales by 2035 and 90% by 2040.
- Repeal of the Electric Vehicle Accessibility Standard, allowing manufacturers flexibility in how they meet emissions targets while supporting long-term EV adoption.
3. Domestic EV demand and charging infrastructure
- Launch of a five-year EV Affordability Program to support domestic EV adoption.
- A $2.3 billion incentive program offering up to $5,000 for battery electric and fuel cell vehicles, and up to $2,500 for plug-in hybrid vehicles, with transaction caps aligned to free trade partner production and exemptions for Canadian-made vehicles.
- Investment of $1.5 billion through the Canada Infrastructure Bank to expand EV charging and hydrogen refueling infrastructure nationwide.
4. Trade and supply chain measures
- Strengthening of Canada’s automotive remission framework to encourage domestic production and investment.
- Maintenance of counter-tariffs on auto imports from the United States to support competitiveness in the domestic market.
- Expansion of international partnerships, including agreements with the Republic of Korea and China, to support future mobility, EV manufacturing collaboration, and diversified trade flows.
5. Workforce and skills development
- Introduction of a Work-Sharing grant to support workforce retention.
- Creation of a workforce alliance to address skills gaps and support private-sector investment.
- Allocation of $570 million to employment assistance and reskilling programs for up to 66,000 workers, including displaced auto workers.
Prime Minister Carney stated that these measures are intended to support long-term competitiveness in EV manufacturing, battery supply chains, and charging infrastructure, while aligning industrial policy with emissions targets and grid capacity planning. The strategy builds on previously announced initiatives across other industrial sectors and is positioned as part of a broader effort to strengthen Canada’s role in global EV supply chains.
“Canada’s auto strategy drives down emissions by accelerating the shift to low and zero-emission vehicles, attracting investment in the clean economy, and lowering costs for drivers through improved efficiency, lower fuelling costs, and smart incentives,” shared the Honourable Julie Dabrusin, Minister of the Environment, Climate Change and Nature. “This is how we cut emissions, create good jobs, drive toward an electric future, and build Canada strong.”
Filed Under: Technology News