According to media reports, the Canadian government has reaffirmed its commitment to its mandatory zero-emission vehicle (ZEV) sales targets, despite urgent warnings from the auto industry. Industry leaders have argued that the mandated ZEV goals are unachievable and could lead to vehicle supply shortages and increased car prices. However, the government remains steadfast in maintaining the policy.
Mélanie Joly, Canada's Minister of Innovation, Science and Economic Development, emphasized at the Canadian Auto Summit that the mandatory ZEV policy is essential to achieving the government's long-term climate objectives.
"It's important that we continue to work with the industry-and frankly, push the industry-to embrace the transition to zero-emission vehicles," she stated.
Under Canada's current mandate, ZEVs must account for 20% of all new vehicle sales by the 2026 model year, 60% by 2030, and 100% by 2035. Automakers can also meet these targets by purchasing credits from other manufacturers or by investing in charging infrastructure.
However, in reality, the penetration of ZEVs in Canada has dropped significantly since 2025, moving the country further from its targets. According to the latest monthly data from Statistics Canada, the ZEV adoption rate for the first four months of 2025 was just 8.6%, down from 12.9% during the same period last year and well below the record high of over 20% reached in December 2024.
Minister Joly acknowledged the recent decline in ZEV sales but said the government will continue to "stimulate demand" to help the industry meet the goals. She mentioned plans to relaunch the federal ZEV incentive program (iZEV), which expired in January, but did not provide a specific timeline. Joly also did not clarify whether the government is considering relaxing the ZEV targets, only stating that "the government is always open to dialogue."
However, the auto industry argues that reinstating the ZEV incentive program is not the "silver bullet" the government claims it to be.
Brian Kingston, CEO of the Canadian Vehicle Manufacturers' Association (CVMA), said, "The idea that bringing back subsidies alone will allow Canada to meet the 2026 ZEV targets is completely detached from reality and math."
He called for immediate change: "Damage is already being done, because the only way companies can comply is by starting to restrict the supply of internal combustion engine vehicles in Canada. Given current trends, that's a realistic path companies are taking."
Kingston added, "EV sales have hit rock bottom, and consumer demand has stalled. The government must recalibrate its targets or risk inflicting serious harm at a vulnerable moment for the industry."
Bev Goodman, CEO of Ford Canada, issued a similar warning at the Canadian Auto Summit. She said that without policy changes, the mandatory ZEV targets will lead to fewer vehicle sales and higher prices.
David Adams, CEO of the Global Automakers of Canada-representing foreign brands-said that automakers are at different stages of the electrification transition, but most are unlikely to achieve the 20% ZEV sales target for the 2026 model year. He added that Canadian policymakers appear unaware of the urgent need to revise the mandate.
In response, Environment and Climate Change Canada-the federal department leading the ZEV policy-stated that legislating mandatory EV sales is not currently a top priority. Department spokesperson Hermine Landry emphasized, "We must recognize that the core challenge facing Canada's auto industry today is the unjustified tariffs imposed by the United States."
Landry did not directly address whether the government is considering abandoning or adjusting the ZEV targets, but suggested that automakers are expected to adapt. She highlighted, "It's important to note that the current sales mandate already includes flexibility, such as allowing hybrid vehicles to partially count toward the targets."
