Mark Carney Meets Auto Industry Leaders to Address U.S. Tariffs and EV Mandate

Ottawa, The Gulf Observer: Prime Minister Mark Carney held high-level discussions with Canadian automotive industry executives on Wednesday to address the impact of U.S. tariffs and explore strategies to safeguard domestic supply chains amid rising trade tensions with the United States.

The meeting brought together the CEOs of Ford Canada, Stellantis Canada, and GM Canada, along with Brian Kingston, President and CEO of the Canadian Vehicle Manufacturers’ Association (CVMA). The discussions focused on the need to develop a resilient, “made-in-Canada” automotive supply chain and reduce reliance on a single trading partner.

A readout from the Prime Minister’s Office (PMO) emphasized the importance of diversifying trade partnerships and reinforcing Canada’s automotive sector in response to new U.S. tariffs. President Donald Trump recently imposed a 25 percent tariff on Canadian-made vehicles—excluding some U.S.-sourced components—while declaring that the U.S. does not need Canadian automobiles and encouraging auto firms to relocate production south of the border.

Concerns Over Canada’s Zero-Emission Vehicle Mandate

The meeting also touched on mounting concerns from auto manufacturers regarding the federal government’s zero-emission vehicle (ZEV) sales mandate, which is set to take effect in 2026. The mandate requires that 20 percent of all new light-duty vehicles sold be zero-emission, rising incrementally to 100 percent by 2035.

Speaking before the meeting, CVMA head Brian Kingston called the mandate “unsustainable,” stating that the targets set by the government are not achievable under current conditions. Following the discussions, Kingston reiterated in a statement that the mandate must be “urgently removed” to prevent further disruption to the sector.

“Canada’s longest established automakers appreciated the candid discussion with the prime minister and look forward to collaborating to protect and grow this critical industry,” Kingston said.

David Adams, President and CEO of the Global Automakers of Canada — representing 26 European and Asian auto brands, including Toyota and Honda — echoed the concerns. He described the mandate as “costly and problematic” and argued that its removal would allow the industry to better focus on repairing Canada-U.S. trade relations.

“My sense of the prime minister is that he’s a pretty pragmatic person,” Adams noted, expressing optimism that Carney might be receptive to industry appeals.

EV Sales Decline Amid Rebate Shortfall

Industry concerns have been further amplified by a notable drop in electric vehicle (EV) sales following the expiry of the federal $5,000 rebate program. Statistics Canada data shows EVs made up only 8.11 percent of new vehicle sales in the first quarter of 2025—down from 16.5 percent in the final quarter of 2024. The figure fell further to 7.53 percent in April.

The federal government has acknowledged the need for renewed consumer incentives. Environment Minister Julie Dabrusin confirmed last month that Ottawa is working on reintroducing an EV rebate program, though its structure remains undecided.

Political Reactions and Trade Outlook

The federal ZEV mandate has also drawn political criticism. Conservative MP and industry critic Raquel Dancho called for the policy’s repeal, labeling it “irresponsible” and accusing the Liberal government of lacking serious action at a time of heightened economic uncertainty.

Meanwhile, Prime Minister Carney remains engaged in renewed trade negotiations with Washington, following the U.S. decision to suspend talks over Canada’s now-shelved digital services tax plan. Carney has expressed determination to finalize a new Canada-U.S. trade agreement by July 21. If that deadline is not met, the prime minister has vowed to escalate Canadian trade countermeasures.

The Wednesday meeting signals the government’s intent to engage directly with industry leaders as Canada navigates complex trade dynamics, climate policy, and economic competitiveness in the evolving global automotive landscape.