Environment Committee on Nov. 3rd, 2025

[Megan Nichols]

What has been said publicly is that an avenue for compliance would be to invest $20,000 in charging infrastructure. That could hypothetically be considered the upper bound of a cost, because why would someone pay $20,000 if they could comply at a lower rate by purchasing credits from another company?

[Branden Leslie, Conservative, Portage—Lisgar, MB]

There will potentially be a choice between a credit of up to, probably, $20,000 and a $20,000 tax on the vehicle. To my colleague's question, with either of these, you could have a $20,000 fee added to the cost of the vehicle. Who is going to bear this cost? Ultimately the consumer will, won't they?

[Megan Nichols]

I'm not sure what is intended by a $20,000 tax, but I would just like to say that this is exactly the kind of thing the review is looking at. Are these compliance flexibilities, such as the purchase of an infrastructure credit for $20,000.... Is that the appropriate level? Should it be something that is reconsidered to be at a lower level? Is it something that's even effective at all? All of these things are on the table as part of the review that's under way.

[Branden Leslie, Conservative, Portage—Lisgar, MB]

Are there any Canadian companies that are currently in the seller's market of this credit scheme, or is the only seller with volume the American company Tesla?

[Mark Cauchi]

There are other companies selling EVs, and I'm not going to get into specifics on who is. We have knowledge of other companies that are selling credits, but I'm not going to get into which ones. I don't think that's appropriate for me.

[Branden Leslie, Conservative, Portage—Lisgar, MB]

Well, Tesla would be the obvious one. They're a completely electric company, so they would have access.

[Mark Cauchi]

There are other companies, as you know, that manufacture only EVs, and there are others that are doing quite well and manufacture both ICE vehicles and EVs.

[Branden Leslie, Conservative, Portage—Lisgar, MB]

Are any of them Canadian? It seems to me that Canadian manufacturers will be exporting their cash on hand to foreign companies to pay for this credit scheme.

[Mark Cauchi]

This regulation does not apply to the export of vehicles. Roughly 90% of the vehicles made by Canadian-based OEMs are sold into the U.S. market. This regulation applies only in the domestic realm.

We do have some companies that are based in Canada that are also selling EVs here. They all have different profiles in that regard, or different levels of success, but yes, there are some Canadian-based companies that are selling EVs here and—

[Branden Leslie, Conservative, Portage—Lisgar, MB]

Are they selling more EVs than gas-powered vehicles? That's how you gain a credit, correct?

[Megan Nichols]

Just to confirm, in order to gain a credit, automakers would have to.... Well, to gain a credit, you need to meet a target, the percentage target. If you exceed that target, then that counts as a credit. You don't have to sell...at least in the early years, there is no need to sell more EVs than ICE vehicles.

[Branden Leslie, Conservative, Portage—Lisgar, MB]

As it is right now, all the Canadian manufacturers are selling under 20%, and I understand there's a pause, so none of them, in theory, would have credit.

My second question is that there seems to be no transparency about this market: How will Canadians know if there's a cost to a new vehicle that's built in through this compliance credit scheme?

[Megan Nichols]

I just want to clarify one thing, which is that there are some other flexibilities in the early years. They're called “early action credits”, and they can count towards future target-meeting.

[The Chair, Liberal, Angelo Iacono]

Thank you very much.

Mr. St‑Pierre, you have the floor for five minutes.

[Eric St-Pierre, Liberal, Honoré-Mercier, QC]

Thanks for being here today.

During your testimony, you mentioned global car sales. I believe you were referring to Asia and Europe. Can you perhaps provide any studies or reports that would substantiate some of those global trends? If so—not to put you on the spot, and you could always report back—if you could elaborate on it, that would be great.

[Mark Cauchi]

I'd be happy to share a few sources.

The International Energy Agency would be probably one of the key reporters on global trends. Their information is available online.

There have been a multitude of other reports done. I believe Bloomberg has one.

There's also ICCT's reporting on global automotive trends. There's a fairly wide number of sources there.

[Eric St-Pierre, Liberal, Honoré-Mercier, QC]

That would be great if you could provide the Bloomberg or IEA reports.

Would you characterize the growth of electric vehicles as incremental, or would you characterize it as exponential in terms of the growth of electric vehicles globally?

[Mark Cauchi]

Globally, I think we can say with a fairly high degree of confidence that there's been incremental growth. North America has been in a decline in 2025, but globally as a whole we are seeing growth.

[Eric St-Pierre, Liberal, Honoré-Mercier, QC]

How would you characterize it over the next five years, by 2030? What would the global market for electric vehicles potentially look like in the next few years?

[Mark Cauchi]

There's a wide range of forecasts, and I think it would be premature for us to speculate, given the current short-term situation that we find ourselves in in Canada. I think we're looking at a lot of modelling that's out there. There's a wide range.

For the North American market in particular, I think we need to be cautious about predictions, but we're definitely looking at this. Globally, I think there's a fair degree of confidence that we're going to see increased sales, just given the trends we're seeing in the automotive market.

[Eric St-Pierre, Liberal, Honoré-Mercier, QC]

Can you maybe comment on that? If, globally, the trends are moving in a faster direction, what does that mean for Canada's competitiveness?

[Mark Cauchi]

This may be a question more for our colleagues at ISED, but I'll state the obvious: Canada finds itself in a North American marketplace. Historically, we've been highly integrated with the U.S. automotive market. North America has a unique set of features regarding its automotive market. It is not like other automotive markets. North Americans tend to buy much larger vehicles than we see consumers buying in Europe and South America, for example. There are some unique attributes to the North American marketplace.

Generally speaking, I think we can conclude that—and, certainly, even the automotive sector will tell you this—electrification is viewed as an unstoppable long-term trend. The question is how fast Canada should go there and how fast we can do that in a North American market, where we have some countervailing forces, as you know, right now, in the short term.

I think it's not a question of “if”; it's a question of how fast we should transition there.

[Eric St-Pierre, Liberal, Honoré-Mercier, QC]

Earlier, we talked about co-benefits. We were talking about health care, for example.

I would love it if you could elaborate a bit on other co-benefits. I come from Quebec, where the grid is mostly renewables, and all the money goes back to Hydro Québec.

Can you comment on some of the co-benefits in terms of electrification in Canada, and say more about the play around utilities?

[Mark Cauchi]

Certainly, from what we can tell from the scientific data—and there were a number of studies done—the life-cycle emissions gain from EVs is pretty undisputable. I think we had, in our RIAS, about a 50% gain on life-cycle emissions—CO2—over the life of a vehicle.

In Canada, we have a clean grid, so there have been studies out there that show much higher levels of life-cycle emission gains for Canada with EVs, so I think it's fairly well established now that there is certainly a gain on the climate side.

As Megan mentioned, obviously, some other benefits include the lower costs for households associated with lower maintenance and operating costs.

I think that competitiveness is also a consideration in that space as the world moves to clean electricity.

[The Chair, Liberal, Angelo Iacono]

Thank you very much.

Mr. Bonin, you have the floor for two and a half minutes.