O, Canada! Who Stands On Guard For Thee?

But for the technicality of an international boundary, Detroit (Michigan) and Windsor (Ontario) could be considered one big city focused on building cars and trucks. The Big Three American car companies are deeply embedded in the economy of Canada, thanks to the original North American Free Trade Agreement (NAFTA).

A new car may begin its journey as a collection of stampings in the US, only to be sent across the border to receive its engine or transmission in Canada, then brought back to a factory in the US for final assembly. Magna International, one of the largest Tier One suppliers to the global auto business, has its headquarters in Canada.

The failed president of the United States has decided unilaterally to impose punishing new tariffs on Canada, for reasons only he can fathom. To avoid the harm those tariffs will do to the Canadian economy, America’s neighbor to the north is being told it must dismantle its policy that calls for all passenger cars sold in Canada to be electric by 2035.

The MAGAlomaniacs lost their mind over a similar provision in California’s clean air rules. It’s a matter of choice, the Red Hats say. If people want to drive a car that wastes 80 percent of the fuel it burns, they should be free to do so. If the world gets hotter and people die in flash floods, well, tough toenails. Freedumb isn’t free, you know?

Canada Under Pressure From US

Writing for InsideEVs, Suvrat Kothari said this week, “At a time when foreign governments need to co-operate and accelerate efforts to reverse climate change, the opposite seems to be happening, especially in North America. It’s pretty clear that the US is forcing Canada to roll back its EV plans. Just like the current administration did it [in the US], by misconstruing the term ‘EV mandate’ and using it to fearmonger that the government is trying to force EVs on consumers, it seems like the US is also exporting its agenda across its borders.” He was building on an op-ed published by the Wall Street Journal last week that said:

“Canadian regulations dictate that all new vehicles sold in 2035 be powered by electricity, with an initial goal of 20% of sales by the end of 2026. Canadian auto-lobby groups have pushed back, calling for that mandate to be scrapped amid poor EV sales and the White House-fueled disruption to the auto manufacturing business.

“The Liberal government, led by Prime Minister Mark Carney, ‘can do both: be very pragmatic to make sure we can help the sector and at the same time help with the adoption of new vehicles,’ Mélanie Joly, Canada’s minister for innovation, said. ‘We are having many conversations and more to say in the coming weeks,’ she added.

“The Canadian Vehicle Manufacturers Association has said the 2035 mandate needs to be scrapped given present conditions. Brian Kingston, the association’s chief executive, said this week in the Financial Post that the 2035 EV sales mandate ‘prioritizes unrealistic EV sales targets that benefit companies with no Canadian footprint over the development of our domestic EV industry.’”

“The auto sector is saying, ‘If we’re going to stay in Canada, you must get rid of this EV mandate,’” a Canadian government official with direct knowledge of Canada’s negotiating strategy told Politico. There is concern that Canada’s auto sector is out of sync with the US, the person said. “We do not have a trade problem. We have a policy alignment problem from the perspective of the Trump administration.” After recently scrapping a controversial Digital Services Tax that would have hit US tech giants such as Google, Amazon and Netflix, the Carney government is now under pressure from automakers and Trump himself to ditch Canada’s EV mandate, Politico added.

Support For Clean Car Mandate

Clean Energy Canada is pushing back against the movement, spurred by US car companies with factories in Canada, to eliminate the countries ZEV policy. It says, “Canada is facing pressure to repeal its Electric Vehicle Availability Standard…. This pressure comes at a moment when American EV and clean energy policy is moving starkly away from the direction the rest of the world is headed. Other countries and jurisdictions, including the UK, are meeting global trade headwinds not with a backslide on policy but by recalibrating to meet the moment.”

Instead of caving to US pressure, it recommends a three-part strategy to bring electric cars priced under $40,000 Canadian (USD$29,000) to market, a price point that research says would drive forward the market for electric cars in Canada.

1. Retooling the EV Availability Standard to help support consumer choice by attracting models at competitive price points. If the federal government is going to revisit its targets, it should focus on near-term adjustments to help automakers weather this temporary storm while maintaining the longer-term trajectory and market signal that Canada is committed to going electric. Any additional flexibility added in the regulation should be designed to achieve other EV-related goals, such as delivering more affordable EVs and building out Canada’s charging network.
2. Reigniting EV demand by recapitalizing the EV incentive program with a focus on affordable EVs, using lower eligibility price caps to help drive down vehicle prices. The rebate should start at $5,000 and decline by $1,000 each year, providing consumers and automakers with a well-communicated phaseout that avoids periods of artificially lowered EV sales as buyers await the return of rebates or at least clarity.
3. Reconsidering Canada’s trade approach by lowering the tariff on Chinese-made EVs (72% of Canadians support) and allowing in a limited quota of these affordable vehicles while also recognizing EU-approved vehicles (70% support). Doing so would open Canada’s vehicle market to fill important market gaps, drive innovation, and ultimately make our auto sector more competitive.

“On clean energy generally and EVs specifically, Canada must now decide whether to follow the path of the US in becoming an island of fossil fuel powered and aging technologies, or if we wish to chart a course that better aligns with global direction and that balances the critical objectives of consumer affordability and domestic industrial competitiveness,” Clean Energy Canada says.

No Easy Answers

There is, of course, one countervailing argument that needs to be discussed. If Canada said “Hello” to boatloads of Chinese and European cars, that could devastate the country’s domestic car industry and imperil tens of thousands of jobs. It isn’t easy being green.

InsideEV readers seem to be as cognitively functional as our readers here at CleanTechnica. Tom99 posted a comment there that many may agree with. He posted:

“Of course the US is overstepping — but not surprising considering that Trump is now even attempting to use tariffs to interfere with Brazil’s criminal justice system. Trump is all about overreach and disrespecting boundaries. An appropriate reaction by Canada would be to promote EVs as being the patriotic choice and giving Trump the one-fingered salute. Caving to a bully is never a winning strategy, because it means that you are subjecting yourself to even more bullying.” Amen to that.