Brian Kingston is the president and chief executive officer of the Canadian Vehicle Manufacturers’ Association
There is plenty of exciting news to celebrate in the Canadian automotive industry.
Ford, General Motors and Stellantis are leading the transformation to electric vehicles in Canada, having announced record investments of nearly $12-billion, creating 6,400 good middle-class jobs. Most of these investments are dedicated to zero-emission vehicle, or ZEV, assembly and creating a North American battery supply chain, giving Canada a role in the once-in-a-century transformation to electrification taking place in the industry.
Despite unprecedented automaker commitments to bring millions of new ZEVs to the market, the federal government outlined in its recently tabled 2030 Emissions Reduction Plan that it intends to regulate the type of vehicles Canadians can buy rather than helping them make the switch to electric. At the urging of environmental groups such as Clean Energy Canada and Electric Mobility Canada, neither representing companies that build electric vehicles in Canada, Environment Minister Steven Guilbeault is preparing to introduce a regulated ZEV sales mandate.
Sales mandates have been used to limited effect in jurisdictions such as California and the U.S. Northeast where ZEV sales hover between 3 and 13 per cent. Meanwhile the world’s leading ZEV jurisdictions, Norway and Iceland, have focused on significant consumer incentives and charging infrastructure to reach ZEV sales of 74 per cent and 45 per cent in 2020, respectively.
It begs the question why Canada would pursue an outdated, redundant and ineffective policy like a ZEV mandate when the tools to increase adoption are so obvious and proven by the worlds’ leading ZEV markets. It’s also worth noting that there are existing regulations today in Canada on greenhouse gas emissions that require automakers to increase ZEV sales to be compliant.
For examples closer to home, British Columbia and Quebec invested in provincial consumer incentive programs, charging networks and education efforts with predictable results. Both provinces lead Canada in ZEV sales, with the increase in sales beginning well before the province introduced unnecessary sales regulations. Ontario was on track to lead all provinces in ZEV sales without a sales mandate when the former Wynne government introduced a consumer purchase incentive. Sales then fell by more than 70 per cent quarter-to-quarter when Premier Doug Ford cancelled the program.
With so many successful examples available on how to effectively increase ZEV sales, it would seem obvious what Canada’s plan to achieve 100-per-cent ZEV sales by 2035 should look like. Alas, Mr. Guilbeault wants to regulate Canadians to buy more expensive ZEVs absent sufficient price offsets and necessary infrastructure that he considers to be out of his purview, all while introducing punitive and duplicative regulations on the very auto companies that are investing billions of dollars to build and support the ZEV transition in Canada.
The 2022 budget, to be released this week, is a pivotal opportunity for Canada to put its climate policy on the right track and outline a credible plan to achieve ambitious ZEV sales targets. The budget must include the following three prerequisite actions if Canada is serious about becoming a leading ZEV jurisdiction:
- Triple purchase incentives to $15,000 per Canadian. The single-largest barrier to ZEV adoption is the higher cost of the vehicles. Without a much higher purchase incentive Canada will not achieve its sales targets, particularly if provinces such as Ontario continue to resist implementing their own provincial incentive.
- Earmark funds to put Canada on the path to building four million ZEV chargers. Getting millions of ZEVs on the road requires millions of publicly accessible ZEV chargers. Canada has 15,000 ZEV chargers, 250 times short of what will be required to support a fully electrified vehicle fleet.
- Launch a national consumer awareness program. There are many misconceptions about ZEV capabilities, recharging, the environmental effect and the ability of a ZEV to adequately replace a gas-powered vehicle. Getting more Canadians behind the wheel of an electric will require a supercharged effort to educate Canadians and encourage them to make the switch.
Failing to deliver on these prerequisites for electrification, while regulating that Canadians buy ZEVs, is bound to fail. It would be akin to the federal government regulating that every Canadian wear 30-inch waist pants without considering the role of diet, exercise and genetics.
Instead of implementing bad polices that will have predictably bad outcomes for consumers, now is the time for the federal government to work with the automotive industry on the road to 2035.
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