Kelly McParland: EV mandate another fanciful Trudeau plan Carney forced to reckon with
There's no doubt automakers have a serious threat on their hands. The Trump administration is putting a vigorous squeeze on the industry in its crusade to force manufacturing back to the U.S. Canadian plants face tariffs on steel and aluminum, and another on autos themselves. Even if negotiations succeed in reducing those levies, the unpredictability of the current U.S. administration eliminates any chance of certainty, inhibiting long-term planning and investment strategies. Add in the failure of the EV revolution to attain the heights enthusiasts forecast for it and the future looks like one long, bumpy ride into doubt.
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The Trudeau EV targets were introduced in 2022 by then-environment minister Steven Guilbeault, now minister of Canadian Identity and Culture. They set minimums for zero emission vehicle sales at 20 per by 2026, 60 per cent by 2030 and 100 per cent by 2035.
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The goals were always fanciful and have looked increasingly so as the EV business ran into trouble on numerous fronts. China's determination to flood the world with low-cost EVs roiled higher-cost rivals in Europe and North America. A global race to secure essential minerals set off commercial clashes in some of the world's most troubled countries. In addition to his on-again off-again tariff regime, Trump is set on weakening the U.S. EV industry, ordering an end to supports introduced by the Biden administration and cancelling a federal tax credit for EV sales in the 'Big, Beautiful Bill' approved Wednesday by Congress. A last-minute change to the legislation even advanced the end of the credit by three months to September this year.
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Add to all that the personal implosion of Tesla founder Elon Musk, removing the perceived chichi-ness of owning a Tesla and sending sales into a tailspin, a tarnish potentially affecting the popularity of electric vehicles in general.
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So there is a more-than-reasonable case to be made for Carney to water down the EV mandate while he's still in the business of ordering retreats. But there's an obvious political risk involved, and one he can't be keen to encourage. One retreat feeds another, and Canada's history of corporate subsidies and regulatory breaks means there's a long list of supplicants likely to view concessions to the auto giants as a signal to get out their begging bowls and head to Ottawa for similar treatment.
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The auto sector claims an annual contribution of $16 billion to the economy, making the need for sympathetic treatment from Ottawa obvious. Yet a tradeoff of EV ambitions to fossil fuel realities is a contravention to Carney's clearly stated environmental beliefs.
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