Canada’s new federal government has unveiled a sweeping package of automotive and clean-technology measures aimed at accelerating domestic investment, reshaping emissions policy, and strengthening Canada’s competitive position in the global auto market.

Announced today by Prime Minister Mark Carney, the plan touches manufacturing, vehicle affordability, emissions compliance, infrastructure, and international trade—areas that will directly affect automakers, suppliers, dealers, and the aftermarket in the years ahead.

“Canada’s new government is fundamentally transforming our economy – from one reliant on a single trade partner, to one that is stronger, more independent, and more resilient to global shocks. We are making strategic decisions and generational investments to build a strong Canadian auto sector, where Canadian workers build the cars of the future,” said Prime Minister Carney.

Investment and Manufacturing Focus

To spur investment in Canada’s auto sector, the government will allocate $3 billion from the Strategic Response Fund, along with up to $100 million from the Regional Tariff Response Initiative. The funding is intended to help manufacturers adapt to changing market conditions, diversify export markets, and scale production.

Additional incentives include the use of the Productivity Super-Deduction and reduced corporate tax rates for zero-emission technology manufacturers. These measures are designed to attract capital investment in EVs, batteries, and related clean technologies, reinforcing Canada’s ambition to remain a North American hub for advanced vehicle manufacturing.

Emissions Policy Shift

On emissions, the government signalled a move away from prescriptive rules toward outcome-based regulation. New greenhouse gas emissions standards will be introduced to support a target of 75% EV sales by 2035 and 90% by 2040.

Importantly for manufacturers, these standards will allow the repeal of the Electric Vehicle Accessibility Standard. Instead of mandating specific vehicle mixes, automakers will be able to use a broader range of technologies to meet emissions targets in the near term, while still driving long-term EV adoption.

Boosting EV Demand and Infrastructure

To strengthen domestic demand, the government will launch a five-year, $2.3 billion EV Affordability Program. The program offers purchase or lease incentives of up to $5,000 for battery electric and fuel-cell vehicles, and up to $2,500 for plug-in hybrids.

Incentives will apply to vehicles with a final transaction price of up to $50,000 when sourced from countries with Canadian free trade agreements. Notably, that cap will not apply to Canadian-built EVs and PHEVs, a move aimed at supporting domestic production.

Charging infrastructure will also see a major boost, with $1.5 billion earmarked through the Canada Infrastructure Bank to expand EV charging and hydrogen refuelling networks nationwide.

Trade and Global Partnerships

On trade, the government plans to strengthen Canada’s automotive remission framework to reward companies that manufacture and invest domestically, while maintaining counter-tariffs on U.S. auto imports to protect Canadian producers.

Internationally, Canada has signed new mobility-focused agreements with South Korea and China, including a strategic partnership aimed at enabling Chinese EV joint ventures in Canada and allowing a fixed volume of Chinese EV imports—further diversifying supply and investment sources.

For the auto sector, the message is clear: Canada is betting heavily on EVs, but with an increased emphasis on flexibility, domestic competitiveness, and global integration.