Prime Minister Mark Carney has announced a temporary pause on Canada’s electric vehicle sales mandate for 2026, which had required 20% of new vehicles sold to be zero-emission by next year. The decision forms part of a broader “Buy Canadian” strategy prioritizing domestically produced goods in federal contracts and establishing a fund to support local product development. The move responds to economic headwinds, including a loss of 66,000 jobs in August and rising unemployment (7.1%), as well as trade pressures from U.S. tariffs.

While the near-term EV target is suspended, Canada’s longer-term goals—60% zero-emission sales by 2030 and 100% by 2035—remain unchanged. The government will conduct a 60-day review of the EV mandate, initially implemented under former Prime Minister Justin Trudeau. Carney emphasized national self-reliance, stating, “We cannot control what other nations do. We can control what we build for ourselves.

The policy shift has drawn criticism from Conservative leader Pierre Poilievre, who accused Carney of a “clumsy retreat” that creates uncertainty for automakers and investors. The adjustment also reflects practical challenges: zero-emission vehicles accounted for just 11.7% of sales last year, well below the 2026 target.

The “Buy Canadian” initiative and EV pause aim to shield industries from U.S. trade policies, including Trump’s 25% tariff on foreign vehicles and 35% blanket tariff on Canadian goods. Exemptions under the Canada-United States-Mexico Agreement soften the blow, but sectors like automotive, steel, and aluminum remain vulnerable. Ottawa recently dropped some retaliatory tariffs to encourage renewed trade talks with Washington.

Additionally, the government plans support for canola farmers facing a 75.8% Chinese tariff on seed imports—a retaliation for Canada’s 100% tariff on Chinese EVs. Carney’s strategy balances economic protectionism with pragmatic adjustments to global trade realities, aiming to stabilize jobs and growth while advancing clean energy goals at a more adaptable pace.

Source: BBC.