Government expected to scrap EV mandate in favour of new fuel efficiency system: source

2 sources say capital of canada is also expected to convey endorse pop electric vehicle incentives for consumers purchasing electric vehicles.

Money will also be announced to build more charging stations for EVs across Canada to help consumers, a source said.

Prime Minister Mark Carney has been under pressure from leaders in the auto sector, multiple provinces and the Conservatives to scrap the incremental sales targets requiring 60 per cent of all new cars to be electric by 2030 and 100 per cent by 2035.

Carney pauses EV mandate, says auto industry under pressure

In September, Carney paused the 2026 targets and announced a 60-day review of the EV mandate, citing that the Canadian auto sector already had "enough on their plate" dealing with the U.S. President Donald Trump's tariffs.

A source said the system replacing the EV mandate will allow manufacturers to earn credits by producing electric vehicles, and that there will be a way to carry over credits earned under the old electric vehicle mandate.

That change would be similar to one made by the European Union last year, when it unveiled a proposal to scrap its sales targets in favour of fuel efficiency. 

It's not clear when the government will put the new system in place, or if it will achieve the same emission reductions as a sales mandate.

The U.S. Administration under former president Joe Biden opted to encourage electric vehicle adoption rules through strict tailpipe rules. The rules did not guarantee consumer access to affordable EVs.

The Trump administration has since abandoned those measures.

Sources said some sort of incentive program for consumers buying EVs is expected to return.

Canada's incentive program for zero-emissions vehicles, known as iZEV, was suspended more than a year ago after it ran out of money due to high demand.

The program offered customers up to $5,000 toward an EV purchase.

Cabinet ministers this week have been hinting the auto strategy is coming.

"It's important because we know our autoworkers are right now feeling the brunt of the U.S. Unjustified and unjustifiable tariffs," Industry Minister Mélanie Joly said this week.

When asked about reviving purchase incentives, Transport Minister Steven Mackinnon said there will be "more news on that to come."

Finance Minister François-Phillippe Champagne said the government's "North Star is still towards electrification."

Former Environment Minister Steven Guilbeault said on Wednesday he was open to changes to the EV mandate depending on what they are, but said he doesn't want the mandate scrapped altogether.

"We need that mandate," said Guilbeault. "It is essential. Not just for climate change, but in terms of air pollution, the impacts, the health benefits of doing this are very important."

Guilbeault quit cabinet in November because of the Carney government's memorandum of understanding with Alberta that agreed on a path forward for a new bitumen pipeline to the B.C. Coast. The agreement also suspended the Clean Electricity Regulations that Guilbeault helped implement.

Guilbeault said it's a good idea for the government to bring back EV incentives. He recommended the introduction of these rebates in 2019 as part of an advisory committee, he said. 

"We know that there is still a price difference between conventional and internal combustion engine vehicles and electric vehicles, so this will help [with] more adoption of more electric vehicles," He said. 

Asked on Wednesday if he will scrap the EV mandate, Carney did not respond as he left a caucus meeting and walked past reporters.

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