Prime Minister Mark Carney of Canada announced Thursday a sweeping plan to offer billions of dollars in incentives and tax breaks for auto industry investment designed to help turn Canada into a global leader in electric vehicles.
The new policies, Carney said, were meant to transform Canada’s economy and make it less reliant on a single trade partner after President Donald Trump’s economic assaults.
“We must take care of ourselves,” Carney told reporters at an auto parts factory in Ontario. “We cannot control what others do.”
Trump has inflicted significant pain on Canada’s auto industry — which exports about 90 per cent of its vehicles to the United States — by imposing a 25 per cent tariff on Canadian vehicles.
Canada applied retaliatory tariffs on American vehicles but gave exemptions to companies that make cars in Canada. But Trump’s dismantling of the trade policies that have knitted together the North American auto industry along with his measures targeting electric vehicles has led to a sense of urgency for Canada to look for alternative markets.
Carney agreed last month to open a crack in Canada’s exclusion of Chinese-made electric vehicles through a 100 per cent tariff that was introduced to match a similar US measure. Canada will allow a small number of Chinese EVs into the Canadian market at a low tariff rate.
The announcement of the Chinese deal was followed by an agreement between Canada and South Korea that may lead to Korean automakers building Canadian factories for vehicles and batteries.
Carney said Canada would still push for a return to free trade in autos during this year’s review of the agreement between the United States, Canada and Mexico, but acknowledged that Trump does not share that objective. He said the measures he announced Thursday would “make our industry world leading regardless of the outcome” of those trade talks.
Carney on Thursday also officially eliminated a mandate to move to zero emission vehicles by 2035, which had been opposed by automakers. Instead, he introduced tougher emissions standards on vehicles in future years and set an ambitious goal of having electric vehicles make up 90 per cent of sales by 2040.
The government is also restoring consumer rebates for electric vehicle purchases. Carney said those rebates will not apply to Chinese-made EVs.
