Prime Minister Mark Carney unveiled Canada’s new automotive strategy in Vaughan, Ontario, on February 5, 2026. Ottawa is scrapping the mandate requiring all new vehicles sold by 2035 to be electric, restoring purchase rebates of up to $5,000, and investing billions in charging infrastructure and in an auto sector threatened by United States tariffs.
Announced in the heart of Ontario auto country
Mark Carney chose an auto parts manufacturer in Woodbridge, in Vaughan, to launch the strategy on Thursday, February 5 — a deliberate setting in the province where Canada’s vehicle assembly and parts plants are concentrated. More than 90 per cent of Canadian-made vehicles are exported to the United States, and U.S. tariffs imposed in 2025 have left plants and suppliers across southwestern Ontario facing an uncertain future.
The strategy’s message was that Canada’s auto future is still electric, but that Ottawa, not a sales quota, will set the pace. “We know where the auto industry is headed. We’re going to support that transition,” Carney told reporters.
The mandate is gone; rebates are back
The centrepiece is the repeal of the Electric Vehicle Availability Standard, the Trudeau-era mandate that required zero-emission vehicles to reach 20 per cent of sales in 2026, 60 per cent by 2030 and 100 per cent by 2035. It will be replaced by stricter greenhouse gas emissions standards for the 2027–2032 model years, which the government says are designed to put EVs at 75 per cent of new vehicle sales by 2035 and 90 per cent by 2040, while letting each automaker choose how to comply. Officials said the new standards are expected to cut vehicle emissions by 56.9 per cent by 2035.
For buyers, the practical news is the return of the federal rebate, which had ended early in 2025 and whose disappearance coincided with a sharp fall in EV sales. The new five-year, $2.3-billion EV Affordability Program opens on February 16, offering up to $5,000 toward a battery-electric or fuel-cell vehicle and up to $2,500 toward a plug-in hybrid, for individuals and businesses. The full amounts apply in 2026 and then decline each year until the program ends after 2030. Most imported vehicles must be priced under $50,000 and built in a country that has a free trade agreement with Canada — a rule that excludes Chinese-built EVs, including those admitted under January’s Canada-China deal — while Canadian-built EVs are exempt from the price cap. Ottawa hopes the program will help put roughly 840,000 additional EVs on the road.
Billions for plants and chargers
Beyond consumers, the strategy commits $3.1 billion to help the auto industry adapt, grow and diversify into new markets, and $1.5 billion through the Canada Infrastructure Bank to expand the national charging and hydrogen refuelling network. Tax measures for zero-emission technology manufacturers are intended to pull more of the EV supply chain — batteries, parts and critical minerals — into Canada.
The sector’s scale explains the spending: it supports about 552,000 direct and indirect jobs and contributes $16.8 billion to GDP, according to industry figures cited by clean-economy groups, with roughly 130,000 workers in the EV segment alone.
Relief in Ontario, doubts from environmentalists
Ontario Premier Doug Ford, who was not at the announcement, issued a statement welcoming and supporting the federal strategy — a notable alignment between Queen’s Park and Ottawa after Ford’s sharp criticism of the January China EV arrangement. Auto parts makers praised the flexibility of the emissions-standards approach, and Unifor, which represents Canadian auto workers, reacted cautiously while insisting that companies selling in Canada should also build in Canada.
Environmental organizations, by contrast, condemned the loss of a binding sales mandate, arguing that targets without legal force may slip. The debate now moves to the details: the draft emissions regulations, the speed of charger construction, and whether rebate-driven demand can keep Ontario’s assembly lines — and the towns that depend on them — working while the trade fight with Washington continues.
