The federal government is forcing a faster change in the driving habits of Canadians, with its decision to include a sales mandate for zero-emissions cars in the country’s first legally mandated climate plan, released this week. Now, Ottawa will have to iron out the details of the controversial strategy, as the clock ticks toward 2026.
That’s the date by which 20 per cent of light-duty vehicle sales will need to be zero-emissions cars, according to the Liberals’ Emissions Reduction Plan. The target will rise to 60 per cent in 2030 and 100 per cent in 2035. The government said it also wants to see zero-emissions vehicles, or ZEVs, make up 35 per cent of medium- and heavy-duty vehicle sales by 2030.
To achieve the targets, Ottawa will need both carrots – in the form of meaningful rebates that encourage consumers to buy ZEVs – and sticks, in the form of regulations that compel automakers to move away from traditional internal combustion engines.
In an interview with The Globe and Mail in Vancouver on Wednesday, Environment Minister Steven Guilbeault played down the difficulty of hitting the newly ambitious sales targets, including the challenge of bringing electric vehicle, or EV, charging infrastructure up to scale.
“Frankly, it’s ambitious, but it’s not super complicated,” Mr. Guilbeault said. “There’s electricity pretty much everywhere. And that’s one area where [while] we may not agree on many things with certain provinces when it comes to climate change, on things like that there’s a lot of co-operation with municipalities and different jurisdictions.”
But while the ZEV sales mandate is a simpler proposition than some of the other regulations Ottawa is developing as part of its climate plan, such as emissions caps for the oil and gas sector and new methane rules, there are still several key details that it needs to resolve in the coming months.
One of those remaining uncertainties is whether, despite the narrow time frame, the 20-per-cent target for 2026 will be strictly regulated and enforced. While the government has sent clear signals about that being the case with the later sales targets, it has sent somewhat mixed signals this week around the nearer-term one.
The government is being lobbied by the auto industry, which opposes ZEV mandates in general and sharply criticized the Emissions Reduction Plan upon its release on Tuesday, to move slowly on the requirements.
In a joint statement, the Global Automakers of Canada, the Canadian Vehicle Manufacturers’ Association and the Canadian Automobile Dealers Association said they are concerned about the level of demand required to meet the EV targets and about the charging capacity.
“We need some assurance that the consumer is going to join us on this ride,” said David Adams, the president and chief executive officer of the Global Automakers of Canada. “And at this point that is not entirely clear.”
Another unresolved matter is whether the sales quotas will apply to a manufacturer’s sales across the country overall, or whether that target will need to be met in each province and territory.
In Canada, plug-in hybrid electric vehicles and battery electric vehicles made up 5.4 per cent of new vehicle registrations in the third quarter of 2021, up from 3.4 per cent in the same period in 2020 and 3.1 per cent in the same period in 2019.
But the countrywide picture massively varies. In B.C. and Quebec – which are the only two provinces that have both a sales mandate and a rebate program that tops up the federal incentive – zero-emissions vehicles made up 12 per cent and 10 per cent of registrations in the third quarter of 2021, respectively. In Ontario, the figure was 3 per cent. In Manitoba, New Brunswick and Saskatchewan, it was less than 2 per cent.
Joanna Kyriazis, a senior policy adviser at Clean Energy Canada, noted long wait times in many provinces for those who currently want EVs, and the regulations’ potential to rectify that. “One of the main goals of the policy is to even the playing field across the provinces and address this lopsided electric vehicle supply situation, and address the long wait times,” she said.
Mr. Guilbeault was non-committal on mandating levels of supply in each province. “Certainly, regional equity is an area of concern and it’s something that is very present on our radar screen,” he said.
And while the path on passenger vehicles may be relatively straightforward, it’s much more complicated when it comes to medium- and heavy-duty trucks.
There is a great deal of variation among different forms of commercial vehicles, ranging from electric buses to delivery vans to long-haul freight trucks, in the pace at which zero-emissions options are being developed and scaled up. So while the government has set the 35-per-cent target for these trucks as a whole, it will need to develop different requirements for each vehicle class, with little indication so far of what those will be.
What is clear is that Ottawa is fully prepared to break with a tradition of synchronizing Canadian vehicle regulations with American ones, given the integrated continental market.
U.S. President Joe Biden has so far opted to set a voluntary target for electric vehicles to make up half of new vehicle sales by the end of the decade.
“It’s a huge deal for Canada to go on its own and say, ‘We’re going to have a zero-emissions vehicle mandate, because we believe in this. And we’re willing to put our money where our mouth is,’” said Electric Mobility Canada president and CEO Daniel Breton, who was in charge of Quebec’s electric mobility plan as a provincial minister a decade ago. “To me, that’s a big deal.”
With Ottawa’s move toward a sales quota, nearly half of the Canadian and U.S. market will be covered by zero-emissions sales mandates of varying levels of ambition. B.C., Quebec and more than a dozen U.S. states already have quotas.
It’s also clear that Ottawa is prepared to spend more than previously to speed along the EV transition and complement the new regulations.
As part of the climate plan, the government is going to pour $1.7-billion into its incentives program for zero-emissions vehicles, making it more affordable for Canadians to purchase the new cars. It is also going to spend $900-million to expand the country’s charging network.
But one thing that both Ms. Kyriazis and Mr. Breton will be looking for in next week’s federal budget is whether the government will expand the electric vehicle incentive program, which currently limits rebates to new vehicles with a maximum base price of $45,000, and a maximum price for models with upgraded features of $55,000.
At present, the program leaves out many new SUVs and pickup trucks, such as the F-150 Lightning electric pickup that Ford has said will start at around $58,000.
Either way, Ms. Kyriazis expressed hope that the ZEV mandate will have the effect of encouraging automakers to manufacture and make available more electric vehicle makes and models that appeal to Canadians – including SUVs and pickup trucks – in order to meet the sales requirements that are coming.
Editor’s note: An earlier version of this story said France, Britain and Germany have zero-emissions vehicle sales mandates. In fact, those jurisdictions are subject to European Union tailpipe emission standards, which are so stringent they effectively require automakers to sell more electric vehicles to comply. Britain has announced plans to adopt a zero-emissions vehicle sales mandate, but the policy is not yet in place.
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