Ottawa and Ontario are putting another $2.5 billion into the province’s auto sector and easing up on vehicle emissions rules for the next few years, just two months after the federal government moved to scrap the EV sales mandate.
Prime Minister Mark Carney and Ontario Premier Doug Ford announced the measures on October 21 as part of a wider $8.7 billion action plan aimed at industries hit by U.S. tariffs.
Back in February, we told you that Carney would replace the Electric Vehicle Availability Standard with tougher fleet-wide emissions rules while bringing back a $5,000 EV rebate, a shift that followed the government’s decision last fall to pause the mandate and launch a 60-day review. Those new emissions rules are now being softened before they have had much time to bite.
According to the Prime Minister’s Office, the auto money will flow over two years into capital projects that help manufacturers buy modern machinery and upgrade production lines “to build the connected and electric vehicles of the future.” The federal government is committing $1.5 billion of that total, with Ontario covering the remaining $1 billion, although the federal backgrounder describes both amounts as “up to” figures.
When it comes to emissions, the fleet average standard for new light-duty vehicles will stay at its 2026 level of 172 grams per mile through the 2029 model year. Yearly tightening returns with the 2030 model year, heading toward 74 grams per mile, which tis tied to Canada’s target of 75 per cent EV car sales by 2035.
Both governments say the pause gives automakers near-term flexibility while letting them generate greenhouse gas credits for use in later years. A new Canada-Ontario Automotive Task Force will oversee the rollout.
“From mine to mill to assembly line, Canada and Ontario are protecting jobs today and making bold investments that will build a stronger, more resilient, more independent Canadian economy for tomorrow,” said Carney.
Which manufacturers will tap the new capital fund hasn’t been announced yet. The move also comes as automakers continue to rethink their EV plans south of the border, with GM recently confirming it will close a Detroit-area EV battery plant, putting even more pressure on Ontario’s auto suppliers.
Related Articles:
- Canada Moves to Scrap EV Sales Mandate
- Canada brings back $5,000 EV rebate, scraps EV sales mandate
- Canadian government pauses ZEV mandate – launches 60 day review
- GM to Close Detroit EV Battery Plant as it Scales Back EV Investments
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