The heads of associations representing automotive manufacturers and car dealers in Canada are calling on the federal and provincial governments to immediately scrap mandates to achieve full-scale zero-emission vehicle targets if they cannot support the funding and resources to achieve them.
Speaking at a joint press event Tuesday on Parliament Hill, Canadian Automobile Dealers Association President & CEO Tim Reuss, along with Global Automakers of Canada President & CEO David Adams and Canadian Vehicle Manufacturers’ Association President & CEO Brian Kingston joined together with a united message that the 2035 ZEV sales target is no longer realistic.
They did so after Transport Canada announced on Monday that they would pause the Incentives for Zero-Emission Vehicles (iZEV) rebate program, which offered a purchase incentive of up to $5,000. The announcement came three days after Transport Canada indicated it was going to put the program on pause because the remaining funds were depleted due to high uptake. The program was scheduled to conclude in the spring, on March 31.
CADA’s Tim Reuss said the decision by the federal government to pause the EV incentives abruptly is particularly frustrating for car dealers who have done their part in building the infrastructure and resources required to support the EV transition.
“We are seeing governments from both the federal and provincial level decommitting from a difficult and costly process that they themselves instituted,” said Reuss. “There is obvious hypocrisy in imposing ambitious ZEV targets and affiliated penalties on the industry and consumers when the government is showing a clear lack of motivation in support to meet these goals.”
Reuss called on Steven Guilbeault, the federal Minister of Environment and Climate Change, to “get rid of the program” if he cannot secure adequate funding for it.
CVMA’s Brian Kingston said the abrupt pause has created chaos for consumers. “It should be obvious to everyone now that provincially- and federally-mandated zero-emission sales targets are no longer ambitious but a complete fantasy. There is no pathway to 100 per cent zero-emission vehicle sales in the next 10 years with the support provided to Canadians.”
Kingston added that dictating what vehicles Canadians can and cannot buy without providing them with the support necessary to switch to electric is a made-in-Canada policy failure. He said “the industry is moving to electrification, that is a foregone conclusion, but it has to be done in an orderly way.”
He also said the targets established a year ago by the federal government to have 20 per cent ZEV sales by 2026, 60 per cent by 2030, and 100 per cent by 2035 were “ambitious” and lacked evidence to support their feasibility.
The GAC’s David Adams said this is an issue that is very problematic for dealers and fundamentally for Canadian consumers. He said following the ZEV mandates is neither reasonable nor fair to vehicle manufacturers, their dealers and, most of all, Canadian consumers.
“Canadian consumers are the ones who ultimately drive this transition to electrification or conversely suffer the consequences from ill-fated mandates,” said Adams. He added that the time period between Friday’s announcement by Transport Canada and the subsequent abrupt pause on Monday indicates a lack of communication or miscommunication – which has caused chaos and confusion.
Adams said the use of the term “pause” is disingenuous because it seems highly likely that Canada will head into an election once Parliament returns on March 24 from the current prorogue, with no guarantee that any future government will continue to provide a purchase incentive.
Efforts and implications
Instead of incorporating industry and expert input for its ZEV mandates, CVMA’s Kingston said the federal government relied on “ill-conceived analysis” from environmental groups posing as automotive experts.
He also noted that the CVMA indicated at the time the federal government announced its objectives that higher ZEV sales levels could be achieved with favourable market conditions, stronger consumer purchase incentives, effective consumer education and awareness, widespread charging infrastructure, expanded grid capacity, and development of a North American battery supply chain.
“Automakers have put their money where their mouth is,” said Kingston, indicating that, since 2020, manufacturers have announced over $40 billion in job creating investment in Canada. He said there is new data that shows the pace of the charging infrastructure rollout is slowing. That infrastructure is critical to mass electric vehicle adoption. Kingston said the buildout of public charging ports slowed by 3,000 in 2024, compared to 2023.
He said this is at a time when the government’s own analysis is calling for an unprecedented acceleration in the pace of the charging infrastructure buildout. He noted that 100,000 public ports are required this year and there are only 32,000 available today.
He also highlighted that provincial governments in B.C. and Quebec have established even more aggressive mandates, while also pulling back on consumer purchase incentives to build the necessary charging and electric capacity.
The Quebec government announced in December it is putting a pause on its rebates worth up to $4,000 in February through to the end of March. It will end all rebates in 2027, and has said it will end all internal combustion sales by 2035. B.C. changed its rebate program last year, limiting incentives to cars with a maximum sales price of $50,000 — a drop of $5,000 from the previous limit. Kingston said there has been a total disconnect between the federal government’s environmental policies and its desire to support and grow the automotive industry.
Dealers may face consumer frustration
As for CADA’s Reuss, he said dealers will be facing the “ire and the madness and frustration” from consumers over the federal government’s decision to pause the iZEV program. “Let’s make it very, very clear, our members are actually fronting the money for the Canadian government towards the consumer because the EV purchase incentives are destined for the end consumer.”
“Our members are performing a service on behalf of the government of Canada to administer and give that up front when a customer purchases a vehicle. The government of Canada doesn’t have to deal with hundreds of thousands of individual customers putting in an EV incentive claim. This is done at the dealership level,” he said.
