Canada’s new government is transforming Canada’s auto industry
Transforming Canada’s Auto Industry for a New Era
Canada’s new government is transforming Canada’s auto industry to compete and win in a rapidly changing global economy.
The world is reshaping trade relationships. Canada’s automotive sector — where more than 90% of vehicles and 60% of auto parts are exported to the United States — is on the frontline of that shift.
Canada’s new government is focused on what we can control: building a more resilient, diversified economy supported by strong domestic industries and broader global partnerships.
This includes launching a national electricity strategy to leverage Canada’s clean energy advantage — providing reliable, affordable power while supporting the cars of the future.
A New Auto Strategy
Canada is introducing a comprehensive strategy to reward made-in-Canada production, harness our strengths in artificial intelligence and advanced manufacturing, and position Canada as a global leader in electric vehicles (EVs).
Today, Prime Minister Mark Carney announced the following measures:
Accelerating Investment
To strengthen Canada’s auto manufacturing base:
$3 billion from the Strategic Response Fund and up to $100 million from the Regional Tariff Response Initiative to help the sector adapt, grow, and diversify.
Leveraging the Productivity Super-Deduction and reduced corporate tax rates for zero-emission manufacturers to drive clean technology and EV investment.
Modernizing Emissions Policy
To focus on measurable outcomes:
Introduce stronger greenhouse gas standards to achieve 75% EV sales by 2035 and 90% by 2040.
Repeal the Electric Vehicle Availability Standard, allowing manufacturers flexibility to meet targets through multiple technologies while accelerating long-term EV adoption.
Making EVs Affordable and Reliable
To strengthen domestic demand:
Launch a five-year EV Affordability Program worth $2.3 billion, offering:
Up to $5,000 for battery electric and fuel EVs
Up to $2,500 for plug-in hybrids
For vehicles up to $50,000 (with no cap for Canadian-made EVs and PHEVs)
Invest $1.5 billion through the Canada Infrastructure Bank to expand EV charging and hydrogen refuelling infrastructure nationwide.
Strengthening Trade and Competitiveness
To protect and diversify the sector:
Strengthen Canada’s automotive remission framework to reward domestic production and investment.
Maintain counter-tariffs on U.S. auto imports to ensure a level playing field.
Deepen partnerships with global leaders, including:
A new mobility collaboration with the Republic of Korea
A strategic EV partnership with China to catalyse joint venture investment and diversify trade
Protecting Workers and Building Skills
To support Canadian workers:
Introduce a new Work-Sharing grant to prevent layoffs and retain skilled employees.
Establish a workforce alliance of industry, labour, and training partners.
Invest $570 million to provide employment assistance and reskilling supports for up to 66,000 workers, including displaced auto workers.
The Big Picture
Canada’s auto sector supports over 500,000 workers, contributes $16 billion annually to GDP, and produced over 1.2 million vehicles in 2025.
With U.S. tariffs creating uncertainty and EV sales projected to reach nearly 40% of global car sales within five years, the choices we make now will define the next generation of Canadian auto manufacturing.
By protecting Canadian workers, investing in critical minerals and battery supply chains, strengthening trade partnerships, and incentivizing automakers to build here at home, we are positioning Canada to lead in the global transition to electric vehicles.
That’s how we Build Canada Strong.
