The decision is part of a joint package of measures presented by the Canadian federal government and the province of Ontario on October 21. Under the plan, the fleet-wide greenhouse gas emissions limit will remain at 172 grams per mile, equivalent to approximately 107 grams per kilometer. The annual tightening of standards will only resume from the 2030 model year. To reach the goal of 75 percent electric vehicle sales by 2035, the fleet average must eventually fall to 74 grams of CO₂ per mile, or about 46 grams per kilometer.
Governments justify the pause by citing the tense situation in the sector. “Maintaining the fleet average performance standard will provide manufacturers with near-term flexibility at a time when the industry faces trade-related pressures,” said a joint statement from Canadian Prime Minister Mark Carney and Ontario Premier Doug Ford. Additionally, manufacturers can accumulate greenhouse gas credits for future years while gradually improving their vehicles’ emissions performance and fuel efficiency.
Canada seeks more flexibility for the automotive industry
The relaxation of emissions standards is accompanied by additional government support for the Canadian automotive industry. The federal government and the province of Ontario plan to provide another 2.5 billion Canadian dollars (approximately 1.6 billion euros) over two years for large investment projects. Of this, up to C$1.5 billion will come from the federal government and up to C$1 billion from Ontario. The funds are intended to help companies adapt to changing economic conditions, strengthen their competitiveness and secure jobs throughout the supply chain.
The background to this is mainly US trade policy pressures and the 25 percent tariffs introduced in March 2025 on the import of cars and auto parts from Canada to the United States, which the Trump administration may increase further. Following the presentation of the plans, Canadian Prime Minister Carney stated that Canada’s automobile exports to the United States had fallen by more than ten percent since then, while American exports to Canada had fallen by more than 20 percent. The components of an average car cross the border between both countries up to eight times. “Their course has changed, and ours must too,” Carney said, referring to the US government.
The Canadian auto industry is closely intertwined with American manufacturing and has been under pressure since U.S. President Donald Trump’s trade policy began straining cross-border supply chains. Ontario is the center of Canada’s automotive industry. Doug Ford’s provincial government had repeatedly warned of the negative consequences of stricter regulations on competitiveness and employment.
The current decision continues the realignment of Canada’s automotive strategy announced in February. At the time, Carney’s government abolished binding sales quotas for electric and zero-emission vehicles that had been introduced under his predecessor Justin Trudeau in 2023. Instead, Ottawa focused on stricter greenhouse gas standards for vehicle fleets, purchase incentives and the expansion of charging infrastructure. The target of reaching 75 percent electric vehicle sales among new car registrations by 2035 was maintained, albeit as a political benchmark rather than a binding sales quota.
Criticism for the delay in reducing emissions
The new postponement of stricter rules has drawn criticism from environmental and energy organisations. Clean Energy Canada warned that the pause would increase pressure on the remaining years and could make it difficult to achieve long-term goals. The organization also noted potential consequences for electric vehicle adoption, investment in charging infrastructure and household fuel costs.
The Pembina Institute also expressed doubt that the 75 percent electric vehicle sales target by 2035 is still achievable under the revised framework. The auto industry, however, welcomed the additional time. Brian Kingston, president and CEO of the Canadian Vehicle Manufacturers Association, said the measures create a more predictable and competitive regulatory environment that could help protect jobs, production and investment.
It remains uncertain whether Canada can still reach its target share of electric vehicles despite the extended pause. While the government is maintaining its long-term target, it is shifting some regulatory pressure to the period after 2030. For manufacturers, this means more flexibility in the short term, but emissions standards will have to be reduced significantly further in subsequent years for the 2035 target to remain viable.
canada.ca, electricautonomy.ca, gc.ca (Carney speech)
