EMC's National EV Action Plan

Maintaining EVAS, with a mid-point review by 2030, strikes a balanced approach: it provides policy certainty while allowing for adjustments considering technological, supply chain, or market developments. The US political situation should have changed by 2030 so there is no reason to get rid of the EVAS altogether, way past the current Trump administration lifespan.

• Maintain existing targets through to 2032 (83%) but commit to a reassessment in 2030.
• If any changes are made to the regulation, only amend section 30.12 (ZEV requirements) and leave all other sections of the regulation as-is:
• Do not lower the 2026 target of 20% - 2026 Model Year has already started. Changing it would be retroactive regulation.

According to our calculations, legacy carmakers will have to reach 14% to 17% ZEV sales for 2026 instead of 20% because or early compliance credits that they already have accumulated.

2.1. Strengthening Canada’s grid as critical infrastructure for clean transportation

• Incentivize electricity regulators to authorize proactive grid upgrades in areas with strong potential for fleet electrification.
• Enable local utilities to raise capital for electrification by revising the federal departure tax threshold, as committed in Budget 2024.

2.2. Making residential charging a foundation of the EV transition

• Recapitalize and streamline ZEVIP to support EV-Charging retrofits: Invest $250 million over four years to make existing condos and apartments EV-ready, improving affordability by covering up to 50% of electrical upgrades, installation costs, and charging stations.
• Extend the residential credit generation pathway in the Clean Fuel Regulation under credit category 3 (CC3), which otherwise sunsets in 2035.
• Integrate EV-readiness into the Model National Building Code and support provincial adoption to reduce long-term charging costs. “EV Ready” parking features an adjacent electrical outlet (e.g., a junction box or a receptacle), at which an EV charger can be installed in the future when needed.
• Provide targeted home charging incentives through energy efficiency programs to reduce installation costs for lower-income households and used EV buyers.

2.3 Scaling public charging infrastructure as critical clean transportation asset

• Update and meet national EV charging deployment targets through sustained federal-private collaboration.
• Recapitalize and streamline ZEVIP to support a reliable public charging network, with a focus on underserved regions.
• Establish a funding stream to support both capital and operating costs of fast chargers in rural and remote areas and include funding for battery energy storage when grid capacity is insufficient to operate DCFCs.
• Consider offering additional credit pathways, such as those utilized in the California and Washington clean fuel standards, in the Clean Fuel Regulation under credit category 3 (CC3), to catalyze private investment in public fast charging in rural and remote areas.
• Implement policy and regulatory reforms to unlock private investment in fast charging infrastructure.

2.4. Building critical charging infrastructure for medium- and heavy-duty fleets

• Establish a dedicated funding stream for fleet charging infrastructure across private and public MHDV fleets, including public, shared, and depot-based models.
• Fund early-stage fleet charging planning to overcome adoption barriers among fleet operators.
• Require managed charging in federally funded fleet charging projects to reduce grid impact and operating costs.
• Invest in publicly accessible MHDV charging hubs, including rest stop-based DCFC and megawatt (MW) charging infrastructure

• Reinstate federal purchase and lease incentives for new and used electric light-duty vehicles (LDVs), including two-wheel and four-wheel EVs and adopt a predictable, gradually declining incentive to provide certainty to consumers and the auto industry: 2025: $5,000 | 2026: $4,000 | 2027: $3,000 | 2028: $2,000 | 2029: $1,000
• Adopt a fee-bate system so the funding is financially neutral for government
• Reinstate the 100% first-year capital cost allowance (CCA) for ZEV LDVs purchased or leased by businesses and self-employed workers.
• Gradually phase out the CCA for new ICE LDVs on a similar timeline, aligning tax policy with Canada’s climate goals.
• (Alternative proposal) Fund EV incentives from polluters through a strengthened OBPS update to the Federal minimum benchmark. Industrial polluters should fund the transition cost for Canadians to EVs which will reduce pollution, support Canadian jobs, and improve Canada's air quality.

• Sustain and expand the iMHZEV program for medium- and heavy-duty ZEVs, ensuring that funding, eligibility, and program timelines match the pace of industry transition.
• Integrate infrastructure support into iMHZEV to streamline access: Allow fleets to bundle vehicle and charging/refueling infrastructure funding in a single application to simplify uptake and accelerate deployment.
• Introduce dedicated incentives for vehicle conversions, enabling the electrification of existing internal combustion vehicles (e.g. delivery trucks, utility vehicles) where feasible.
• Reinstate the 100% first-year CCA for MHD ZEVs (new and conversions), helping fleets amortize the higher upfront cost of ZEV purchases.
• Begin phasing out CCA eligibility for new MHD ICE vehicles, in line with Canada’s climate and air quality commitments.

• Collaborate with provinces, fleets, and manufacturers to establish realistic, phased-in sales targets for new medium- and heavy-duty zero-emission vehicles, including Class 7–8 trucks and school buses, that reflect market and technology readiness.
• Finalize “made-in-Canada” vehicle emission standards for medium- and heavy-duty vehicles, currently under development by Environment and Climate Change Canada (ECCC), to secure deep reductions in greenhouse gas and air pollutant emissions from MHDVs and reinforce domestic leadership in low-carbon transportation.

The Clean Fuel Regulations (CFR) provide a critical market-based tool to support Canada’s transition to zero-emission transportation by attaching value to carbon intensity reductions in fuels. Category CC3, which enables credit generation from EV charging, is especially important and should be maintained for the following reasons:

• Crowds in private investment in public charging infrastructure: CC3 credit generation makes public EV charging projects more financially viable, particularly in lowerutilization or rural sites. For many investors, these credits are essential to closing the business case for building and operating chargers. Without them, new stations may not get built — or may be delayed until demand catches up.
• Creates a self-reinforcing financing loop: Revenue from CC3 credit sales must be reinvested in additional EV charging infrastructure. This creates a virtuous cycle: more charging drives more credit generation, which funds even more charging. Eliminating CC3 would break this feedback loop just as momentum is growing.
• Helps keep public charging more affordable: Credit revenue helps offset the high cost of delivering and operating public charging — particularly highpower DCFC stations, which face significant demand charges and capex costs. This helps keep per-kWh prices lower for drivers and prevents pass-through of full infrastructure costs to users. In effect, it acts as a hidden consumer affordability mechanism.
• Complements public subsidies without replacing them: The CFR is a market-driven complement to direct federal and provincial infrastructure grants. It rewards performance (i.e., delivered charging sessions) rather than forecasts or plans, and ensures ongoing revenue to support site operation and maintenance, unlike most upfront grants. It also makes private-led and nonsubsidized projects more viable.
• Supports equitable access and deployment in underserved areas: Because credit revenue improves project economics, it can support deployment in less profitable areas (e.g., rural, northern, or lower-income communities) that may otherwise be overlooked. As a result, the CFR contributes to Canada’s broader equitable electrification goals.
• Aligns with long-term decarbonization and grid planning goals: Unlike fossil fuel blending or combustion-based carbon offsets, electricity-based CC3 credits support direct electrification of end uses — the core of most net-zero pathways. They also create a signal for utilities and governments to anticipate growing loads and invest in future-proof grid upgrades.

Canada has a strategic opportunity to build a globally competitive EV supply chain that spans extraction, refining, component manufacturing, assembly, software, servicing, and recycling. But to fully realize this potential, a coordinated national strategy is needed; one that ensures value-added production stays in Canada, supports Canadian innovators, and fosters long-term economic growth.

• Innovation drives economic growth and global competitiveness: A thriving supply chain depends on innovation across sectors: battery chemistry, component integration, vehicle software, manufacturing processes, and smart-grid solutions. Canada’s research institutions and private sector innovators need targeted support to accelerate these developments. This includes sustained funding for R&D, demonstration, and commercialization, through programs like NSERC, NRC IRAP, and the On-Road Transportation Decarbonization Program, and more accessible tax credits for all companies, including SMEs.
• Full value chain approach: From extraction to end-of-life:  Canada’s participation in the EV economy must not stop at mineral extraction. A successful supply chain strategy must include refining, cathode/anode production, vehicle and battery assembly, and increasingly, end-of-life (EOL) battery recovery, refurbishing, and recycling. Circular economy principles are critical to both sustainability and competitiveness. Supporting Canadian firms innovating in battery reuse and recycling will reduce supply chain risks and improve domestic resilience.
• Federal leadership and strategic program coordination: Although several federal programs exist to support different points along the innovation spectrum, they must be aligned under a cohesive national strategy with clear priorities: domestic commercialization, support for Canadian champions, and a level playing field with international competitors. Strategic use of procurement, innovation funding, and investment attraction tools must be deployed together, not in isolation.
• Cross-sectoral and future-facing by design: The EV supply chain touches not just auto manufacturing but also sectors that will define Canada’s future economy: clean energy, software and AI, battery tech, cybersecurity, and advanced materials. A modern supply chain strategy should reflect this convergence, positioning EVs as part of Canada’s broader industrial and clean tech transformation.

Consumer hesitation and workforce gaps remain persistent barriers to Canada’s EV transition. Targeted investments in public awareness, workforce upskilling, and industry readiness are essential to accelerate adoption and ensure Canadians and Canadian businesses are equipped to succeed in the shift to zero-emission transportation.

While incentive programs have improved EV affordability, many Canadians still lack accurate, experience-based information about EV performance, charging, total cost of ownership, and vehicle availability. Funded outreach, education, and awareness-building programs can improve public confidence and informed decision-making— particularly in rural and underserved communities where exposure to EVs remains limited.

Similarly, businesses and fleets require tailored support to build internal capacity, adopt EVs safely and effectively, and integrate charging solutions. Safety training, fleet transition planning, and hands-on skills development must be scaled up to address gaps in servicing, diagnostics, and fleet electrification. For MHDVs, successful pilot training initiatives should be made permanent and expanded nationwide.

To complement awareness and training efforts, the federal government should also improve clarity and communication around EV-related financial information. Better financial literacy across the transportation, finance, and insurance sectors will reduce barriers to adoption and increase private-sector investment. Key actions include:

• Fiscal policy communication: Reinforce the 100% first-year Capital Cost Allowance (CCA) for eligible ZEVs and related infrastructure, with clear and predictable timelines to support long-term capital planning.
• Accounting standards guidance: Provide clear direction on amortization treatment under both IFRS and ASPE to ensure consistency in how ZEV investments are reported.
• ROI frameworks: Support the development and dissemination of standardized assumptions—accepted by industry—for key inputs like maintenance costs, energy prices, product lifetime, residual value, and insurance risk. This would strengthen business case development for fleets and enable more robust financing, leasing, and underwriting models.

Canada’s electric vehicle (EV) sector is critical to achieving the nation’s clean energy and economic goals. With strong market growth, innovation, and an increasing number of Canadian-made solutions, the EV industry holds significant promise. However, the potential of this industry could be compromised if trade policies are not carefully crafted to facilitate growth and international competitiveness.

While the Canadian government has made commendable efforts to support fair trade, it is essential that policies do not inadvertently disrupt Canada’s burgeoning EV industry. Several policy measures can help ensure that Canada remains competitive while also fulfilling its climate goals.

9.1. Tariff exemptions for critical EV equipment

Avoid tariffs on critical EV infrastructure and components: Exclude tariffs on EV charging equipment, electrical components, and replacement parts that are essential for the growth of Canada’s EV Industry. Ensure that CUSMA-compliant EV components remain tariff-free to avoid hindering infrastructure expansion.

9.2. Maintain affordability of EVs through trade exemptions

Maintain access to affordable EVs through trade exemptions: Exempt light, medium, and heavy-duty electric vehicles (EVs) from tariffs, especially for imports from countries with which Canada has free trade agreements (FTAs), ensuring that EVs remain affordable and accessible to Canadian consumers

9.3. Incorporate the EV industry in trade agreements

Include EV sector in trade negotiations: Advocate for the inclusion of Canada’s growing EV industry in trade discussions, particularly with the United States and Mexico, to ensure that free trade agreements reflect the strategic importance of the EV sector.

9.4. International collaboration for a stronger EV industry

Foster international collaboration in the EV space: Develop strategic partnerships with international markets such as the European Union, South Korea, and Mexico to expand the Canadian EV industry’s reach and promote the import of affordable CETA-compliant electric vehicles.

9.5. Focus on non-relocatable projects

Prioritize non-relocatable projects and domestic supply chains: Focus on projects tied to domestic resources and infrastructure that cannot be relocated outside of Canada, such as renewable energy, EV charging networks, and critical minerals (extraction, refining, and recycling). Strengthen the Canadian EV industry’s position as a global leader in clean technologies

9.6. Streamlining provincial regulations

Reduce provincial regulatory barriers to accelerate clean technology: Work to eliminate regulatory obstacles between provinces, accelerating the implementation of clean technologies and enabling smoother interprovincial trade in EV and related sectors.

9.7. Strengthening export support for Canadian EV technology

Support export of Canadian EV solutions: Expand export support programs to help Canadian EV technology and service providers access international markets and grow global competitiveness.