On February 5, 2026, Prime Minister Mark Carney unveiled a transformative national automotive strategy, officially scrapping Canada’s ambitious electric vehicle (EV) sales mandate. The previous policy, introduced under Justin Trudeau, required automakers to ensure escalating zero-emission vehicle sales, starting at 20% in 2026 and reaching 100% by 2035. Carney’s government has replaced this mandate with a more flexible approach focused on stricter tailpipe greenhouse gas emissions standards for model years 2027–2032.
The new strategy includes a $2.3 billion incentive program, offering consumer rebates of up to $5,000 for battery electric and fuel-cell vehicles, starting as early as February 16, 2026. These rebates will gradually decrease until 2030, aiming to encourage voluntary EV adoption while supporting the auto sector’s transition.
This move marks a continuation of policy rollbacks under Carney, who assumed office in March 2025. In November 2025, the government abandoned a proposed emissions cap on the oil and gas sector and dropped clean electricity regulations, citing economic pressures and the need to protect jobs amid global trade challenges.
Supporters, including industry groups like the Automotive Parts Manufacturers’ Association, praise the changes as pragmatic, arguing they safeguard Canadian competitiveness and thousands of auto jobs, particularly in Ontario. Critics, overreach, however, contend that ditching the mandate weakens Canada’s climate commitments at a critical time.
Carney emphasized that the future of Canada’s auto industry remains electric, but through incentives and innovation rather than rigid mandates. The strategy aims to position Canada as a global leader in next-generation vehicles while addressing immediate economic realities.
As the policy takes effect, eyes are on how it will impact EV adoption rates, consumer choices, and Canada’s role in the global shift to sustainable transportation.