Canada Suspends 2026 EV Mandate Amid US Trade Shifts

Canada announced it will suspend the 20% electric vehicle (EV) sales requirement for 2026, citing the impact of US tariffs and shifts in global trade dynamics. The government will review EV sales targets over the next 60 days, leaving manufacturers without mandatory 2026 benchmarks.

The decision was announced alongside measures aimed at revitalizing the Canadian economy and mitigating the effects of US tariffs. Prime Minister Mark Carney unveiled a CAD$5 billion (USD$3.6 billion) Strategic Response Fund  to support businesses affected across sectors. He also announced a policy requiring federal agencies and public enterprises to purchase Canadian-made products.

“The US decision to impose tariffs on all its partners is producing fundamental changes, and Canada can no longer rely on its trade relationship with its neighbor as in the past,” the government said.

Carney added, “We cannot control what other nations do. We can control what we give ourselves, what we build for ourselves. Canada is building the strongest economy in the G7, less dependent on foreign powers.”

Addressing the automotive sector, he noted, “Our auto sector, due to massive policy changes in the United States, is under extreme pressure. We understand that. They already have enough at the moment, so we are removing that.” The EV mandates, established under the previous Trudeau administration, had set progressively stricter targets, culminating in a requirement that all vehicles sold in Canada be electric by 2030.

The move received industry support. David Adams, CEO, Global Automakers of Canada  (GAC), said, “We applaud the federal government for recognizing that consumer adoption of electric vehicles is not at the level anticipated just a few years ago.”

The announcement coincided with new labor and economic data. Statistics Canada reported that unemployment  rose to 7.1% in August, the highest since August 2021, following a loss of 66,000 jobs attributed to the US-Canada trade dispute. Economic activity also contracted 0.4% in 2Q25, driven by a decline in exports and business investment in machinery and equipment.