As part of a host of measures announced by Prime Minister Mark Carney, Canada has waived 2026 model year vehicles from requirements that would have mandated 20% of all vehicles sold to be EVs.

He also announced the Government was launching an immediate 60-day review of the overall regulation “to reduce costs.”

The mandate would have required at least 20% of new vehicles sales in 2026 to be zero-emission vehicles, and has attracted much vigorous oppostion from automakers.

By 2035, the mandate would have required 100% of new vehicle sales to be zero-emission.

The Canadian Automobile Dealers Assocation, which had been vocal in its concerns over the program, signaled its support for the move.

“This is a positive first step as it gives certainty to consumers and the automotive industry for the next year, and will help to avoid a consumer availability and affordability crisis in the short term. The Provinces of Quebec and British Columbia should immediately follow this lead to avoid perpetuating internal trade barriers,” said the organization in a statement.

Brian Kingston, President & CEO of the Canadian Vehicle Manufacturers’ Association (CVMA), echoed this statement.

“The CVMA welcomes today’s announcement that the federal government will waive the Electric Vehicle Availability Standard (EV mandate) for the 2026 Model Year and launch a review of the regulation to reduce costs for the automotive industry. This is an important first step,’ said Kingston.

“The EV mandate imposes unsustainable costs on auto manufacturers, putting at risk Canadian jobs and investment in this critical sector of the economy. A full repeal of the regulation is the most effective way to provide immediate relief to the industry and keep it competitive.

“We look forward to working with the federal government as it undertakes a review of the regulation.”

In addtion to the EV shift, Carney announced a “series of new, strategic measures for workers and businesses in those sectors most impacted by U.S. tariffs and trade disruptions. These initiatives will help workers acquire new skills and businesses retool their production and diversify their products, while spurring more domestic demand for Canadian businesses.”

The announcement contains a broad set of initiatives, including labour supports, “Buy Canadian” initiatives, and supports for farmers and business.

The full text of EV-mandate related shifts is as follows:

Review the Electric Vehicle Availability Standard (EVAS)

The Government is announcing an intent to make targeted regulatory adjustments to help the automotive sector stay competitive during a period of transition. The automotive sector is essential to Canada’s economy, supporting jobs, trade, innovation and the green transition. To support the sector as it navigates the immediate challenges from U.S. trade actions while preparing for a zero-emissions future, the Government of Canada will remove the 2026 target from the Electric Vehicle Availability Standard (EVAS) and is launching a 60-day review of the overall regulation.

The EVAS currently requires that at least 20% of new light-duty vehicle sales in Canada be zero emissions by 2026, rising to 60% by 2030 and reaching 100% by 2035. The EVAS will be amended to remove the target for the 2026 model year vehicles to help reduce the economic pressure due to tariffs.

At the same time, the Government is launching an immediate review of the EVAS to ensure it continues to reflect market realities, remains effective for Canadians, and does not place undue burden on automakers. The review will consider potential amendments to the annual sales targets, including the 2035 goal, and will explore possible additional flexibilities.

Increasingly, countries around the world are transitioning to Zero Emissions Vehicles (ZEV), including electric vehicles. Up to 1 in 4 vehicles sold in the world today is an electric vehicle. Shifting toward ZEVs (including electric vehicles) will offer long-term savings for drivers, reduced carbon emissions and improved health outcomes and reduced health care costs by ensuring cleaner air for communities. The global shift to electrification is also creating significant opportunities for the Canadian economy, including new manufacturing jobs and expansions in Canada’s critical minerals mining and processing, which will benefit rural communities.

While the transition to zero emission vehicles is crucial for addressing climate change, it is unfolding amid significant short-term economic uncertainty. Since these regulations were introduced, U.S. tariffs have had a major impact on the auto industry. Additionally, Canada must carefully consider how recent U.S. policy uncertainty could affect the affordability and availability of ZEVs in the integrated North American market. That’s why we are taking a measured approach – supporting our industries today, while keeping a clear focus on a sustainable future.

In addition to regulatory adjustments, the Government will also explore options to bring more affordable electric vehicles to Canadians.

These changes are part of the Government of Canada’s broader strategy to support key sectors impacted by global trade dynamics, while ensuring a clean and competitive economy for the future.