Carney Pauses 2026 EV Sales Target, Pushes ‘Buy Canadian’ Policy Amid Trade Tensions

Canadian Prime Minister Mark Carney has announced a pause on a key electric vehicle (EV) sales target while unveiling a new “Buy Canadian” policy aimed at shielding the country’s economy from mounting pressure caused by U.S. trade actions.

Speaking on Friday, Carney said automakers will no longer be required to meet the rule that 20% of all new vehicle sales must be electric by 2026. Instead, the government will conduct a 60-day review of the mandate, which was introduced in 2023 by former Prime Minister Justin Trudeau. Despite the delay, Carney stressed that Canada remains committed to its long-term targets of 60% EV sales by 2030 and a full transition to zero-emission vehicles by 2035.

The move comes as Canada grapples with a slowing economy, with recent data showing the country lost 66,000 jobs in August, pushing the unemployment rate up to 7.1% – the highest level since 2016, outside of the pandemic years.

“We cannot control what other nations do,” Carney said during the announcement. “But we can control what we give ourselves – what we build for ourselves.”

The “Buy Canadian” initiative will prioritise domestically produced goods in federal contracts and introduce a new fund to help Canadian companies innovate and develop homegrown products. The policy is widely seen as a direct response to President Donald Trump’s aggressive trade measures, including a 25% tariff on foreign-made vehicles and a blanket 35% tariff on Canadian goods. While many Canadian exports remain exempt under the Canada-United States-Mexico Agreement (CUSMA), key sectors such as auto, steel, and aluminium have been hit particularly hard.

Carney said the EV mandate pause would give the struggling auto industry room to adapt as it faces these tariffs, while Ottawa continues negotiations with Washington. Earlier this week, he described his recent conversation with Trump as “good” and expressed optimism about securing trade relief for affected industries.

The opposition, however, was quick to criticise the announcement. Conservative Party leader Pierre Poilievre accused Carney of reversing his earlier hardline stance on banning petrol and diesel vehicles by 2030, calling the move a “clumsy retreat.”

“Instead of offering clarity, he’s created more uncertainty,” Poilievre told reporters. “Businesses that might have invested in Canada’s auto industry now have to wait while Mark Carney dithers for another year.”

Meanwhile, Canada is also facing fresh trade tensions with China. Last month, Beijing imposed preliminary duties of 75.8% on Canadian canola seed imports, widely seen as retaliation for Ottawa’s decision to apply a 100% tariff on Chinese electric vehicles in October 2024, mirroring U.S. policy.

The government has pledged additional support for farmers impacted by the Chinese tariffs while continuing efforts to restart trade talks with the United States. Despite these challenges, Carney said the government’s focus remains on strengthening Canada’s domestic industries and protecting jobs as global economic uncertainty grows.