Prime Minister Mark Carney has paused a key electric vehicle sales target while pushing for a “Buy Canadian” policy, as his government deals with the impact of US trade policies.
Canadian automakers will no longer be required to ensure 20% of new car sales are electric by next year, Carney said on Friday. New rules will also prioritise Canadian-made goods for federal contracts and include a fund to assist firms to develop new products.
The moves come as Canada’s economy has shown signs of weakening – shedding 66,000 jobs in August and pushing unemployment to 7.1%.
“We cannot control what other nations do,” Carney said. “We can control what we give ourselves – what we build for ourselves.”
While the EV mandate from next year will be paused, the longer-term goals – 60% by 2030 and 100% by 2035 – will remain.
The mandate requiring the number of new zero-emission vehicles sold in Canada was put in place by Carney’s predecessor Justin Trudeau in 2023.
Ottawa will also launch a 60-day review of the EV mandate rules.
Sales of zero-emissions vehicles hit an 11.7% market share last year, according to government figures.
The leader of Canada’s Conservative Party Pierre Poilievre told reporters on Friday that Carney had “flip-flopped” on his previous stance of advocating to ban petrol and diesel vehicles by 2030, and had “finally admitted that the Conservatives were right”.
But he said the PM had made a “clumsy retreat” for only delaying the EV mandate.
“So now, businesses who would otherwise consider investing in auto making here in Canada would have to put that investment on hold while Mark Carney dithers for another year,” Poilievre said.
President Donald Trump has imposed 25% tariffs on foreign vehicles – though manufacturers in Canada and Mexico have some exemptions – and the move will help the struggling sector manage US tariffs, Carney said.
The US has also imposed a blanket 35% tariff rate on Canadians goods.
While the vast majority are exempt under the Canada-United States-Mexico Agreement and many goods are still able to cross the border tariff-free, industries like auto, steel and aluminium have been hit hard.
Friday’s announcement comes as new numbers suggest economic uncertainty is slowing growth.
Canada lost 66,000 jobs in August, largely the result of a drop in part-time work, the national statistics agency said on Friday.
The unemployment rate jumped 0.2 percentage points to 7.1% – the highest since May 2016, barring 2020 and 2021 at the height of the Covid pandemic.
This month, Canada dropped some of its billions of dollars in retaliatory tariffs on an array of US products as it sought to restart trade talks with Washington, which are focused on levies on those specific sectors.
Carney said earlier this week that he had “good conversation” with Trump on Monday on trade and hopes to secure some relief for those industries.
Ottawa will also bring in support for canola farmers, which last month were hit with preliminary duties from China of 75.8% on seed imports.
China’s levies are being viewed as a response to Ottawa imposing 100% tariffs on Chinese electric vehicles in October 2024, following US policy.
By BBC News
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