Evidence of meeting #17 for Environment and Sustainable Development in the 45th Parliament, 1st session. (The original version is on Parliament’s site, as are the minutes.) The winning word was vehicles.
A recording is available from Parliament.
Chief Economist, Canadian Automobile Dealers Association
Studies also show that this calculation of credits would not have allowed us to meet federal targets and that there was a risk Canada’s inventory would have a shortfall of 400,000 vehicles. I’m talking about Canada, not Quebec. I don’t know if that would have been the case in Joliette or Rimouski. However, that has an impact in Canada, namely, 400,000 fewer units, and this has an impact on prices and consumer choice.
Liberal
The Chair Liberal Angelo Iacono
Thank you, Mr. Bernard.
I would just like to inform witnesses that you can contact the committee in writing. If you don’t have enough time to complete your answers or if you wish to expand on them, you may provide additional information to the clerk in writing. Any additions are always welcome.
Mr. Leslie, the floor is yours for five minutes.
Conservative
Branden Leslie Conservative Portage—Lisgar, MB
Thank you, Mr. Chair.
To build on that, Mr. Gessaroli in particular, given some of the data you outlined on the unfair distribution of low-income and rural people, could you submit all of that data? I think it's a continuation of policies that, unfortunately, are making it harder to live in this country.
I'd like to turn to Mr. Reuss.
Car dealers have been sounding the alarm, as you mentioned, for quite a while regarding the unworkability of this EV mandate. You've been ignored for a long time. Now we're at point where nobody really knows what's going to happen.
From your vantage point, could you describe the level of frustration that exists amongst dealer owners?
President and Chief Executive Officer, Canadian Automobile Dealers Association
I would characterize it as a deep concern because they've already made the investments. Over $3.4 billion have been spent by all of our members. Now they're not selling the units as much as they thought and as much as the manufacturers thought. There is a deep concern when they see that. Mix that in with the concerns that we currently have overall as an industry and as dealers with the trade environment and you can imagine what our members are going through.
Our members are made up of small, medium and large companies that might have only 40 employees in their location. They don't know whether they're going to be able to exist or not if certain vehicles are cut off because of Trump's tariffs. They're not able to sell EVs at the rates that they had.
The investment they've made is sunk money. That's already done. This is in charging infrastructure, in training and special lifts for the vehicles. By the way, you need a forklift in every single dealership to be able to take out a battery in case you need to take it out. It's things of that nature that are probably not considered.
Our members are the first ones who have the pulse of what's going on in the market because they have the vehicles. If they're not able to sell them, they let us know fairly quickly why that is and what the customers are telling them.
Is there interest in EVs? Yes, absolutely. Will EVs be part of the solution? Absolutely they will be a growing part of the solution. It's just not at the pace that is currently outlined in the standards.
Conservative
Branden Leslie Conservative Portage—Lisgar, MB
I'll turn to Mr. Bernard to comment from an economic standpoint and to continue on with what you were just saying.
Do you believe that the EV mandate regulations are the most effective way to convince people that they should buy an EV?
Chief Economist, Canadian Automobile Dealers Association
The answer is no to that. I don't believe it's a tool made to convince people to buy EVs. It's a supply-side program and tool. We can have a good discussion on how it served its purposes, for example, for our dealers who have invested over $3 billion in infrastructure, but it's a supply-side tool. Now the issue is on the demand side.
No, it's not a great tool to convince. I'd say quite the opposite. I think it's a tool for the supply side with a lot of wishful thinking on the demand side.
Conservative
Branden Leslie Conservative Portage—Lisgar, MB
We keep hearing this idea that somehow this is going to increase choice. Continuing on that, in your view what policies would actually expand choice for consumers?
Chief Economist, Canadian Automobile Dealers Association
I'll go first and then I'll let Tim talk.
It's not a policy that's going to increase choice. It's going to limit it quite extensively.
President and Chief Executive Officer, Canadian Automobile Dealers Association
By having technology neutral regulation, you're going to see more choice because you're going to have companies compete for that business, innovating in that space more than they are today where everybody's focused on one portion of it only.
Imagine how far hybrids have come in the last couple of years to the plug-ins now available, but unfortunately not yet at the range that is foreseen of a minimum of 80 kilometres for plug-ins in the current regulations. Those things will happen. Once you have technology-agnostic regulation and you just mandate an outcome, you're going to have more competition and therefore more choice.
Conservative
Branden Leslie Conservative Portage—Lisgar, MB
Thank you for your very common-sense recommendations off the bat in your opening remarks of how to try to fix this problem.
Mr. Kingston, I'd like to move to you.
On that back and forth we had previously, you stated that Canadian auto manufacturers have committed over $1 billion toward credits required for the 20% target. To the best of your knowledge, have Canadian companies actually bought credits from American automakers such as Tesla—not just committed, but bought credits with real money?
President and Chief Executive Officer, Canadian Vehicle Manufacturers' Association
Yes, my understanding is that they have.
President and Chief Executive Officer, Canadian Vehicle Manufacturers' Association
It's over $1 billion, and if you look at the deficit in sales now to 2030, it would cost at least $3 billion to comply with this regulation.
Conservative
Branden Leslie Conservative Portage—Lisgar, MB
It looks to me, based on the numbers you mentioned, that Tesla has received about $800 million, which likely has to be from Canada.
With that, Mr. Chair, I would like to move a motion that I hope will get to the bottom of this for my Bloc colleague and all of the folks around this table as to the question of whether or not money from Canadian automakers has been sent to Tesla. I move:
That the Committee request Tesla, Inc. or any of its relevant subsidiaries operating in Canada (“Tesla”) to produce the following information as it relates to the Government of Canada’s Electric Vehicle Availability Standard: (a) How many compliance credits has Tesla: (i) already sold as of October 31, 2025, or (ii) committed to sell, to any corporation in Canada (or respective related corporate entity); and, (b) the associated total revenue in Canadian ($) dollar equivalent for each above category, namely already received by Tesla and committed to receive; and, that this information be provided to the committee no later than 4:00 pm EST on Wednesday, December 10, 2025.
I recognize that Mr. Kingston is unable to provide the number for the outflow of Canadian cash due to the commercial sensitivities of this credit market. Recognizing that Tesla is the only or sole manufacturer that would have such an excess that it would be the seller in this carbon market, I think it's reasonable for us to be definitive as to whether or not hundreds of millions of dollars have actually flowed out of this country. I think it's fair to say that it's one thing if a dollar value of $1 billion or more has been committed versus doing so at a time when we've had such a liquidity crisis for our automakers in this country and such a challenging international trade environment with the United States. I'm not sure whether or not Tesla will be transparent. Obviously, their financial disclosures already have the bulk number, so I hope they might be willing to try to play ball.
To my colleague Mr. Bonin, Tesla is the one that would hold this information, so I hope I could get the support to find out, not who is telling the truth here necessarily, but whether or not there has actually been an outflow.
I hope I can get support from all my colleagues to make this request of Tesla to find out if Canadian companies, at a time when they need capital, have been forced due to this scheme to purchase compliance credits from an American auto manufacturer, most likely Tesla, based on the financial disclosures.
Thank you, Mr. Chair.
Liberal
The Chair Liberal Angelo Iacono
Thank you, Mr. Leslie.
Before I go to Mr. St-Pierre, I'd like to ask members if they want to release the witnesses, so that we can look at this proposed motion.
Liberal
Eric St-Pierre Liberal Honoré-Mercier, QC
I have a point of order on that.
I respect the member's motion and would love to debate it. I was going to ask if we could continue with the questioning. I have about five minutes of questions, and my colleague has about two and a half minutes.
I would propose that we continue with the questioning and then proceed to your motion if everybody would agree to that.
Liberal
The Chair Liberal Angelo Iacono
Is there unanimous consent for that? I need unanimous consent to go with that.
Conservative
Branden Leslie Conservative Portage—Lisgar, MB
I'm curious. Maybe we could do a quick straw poll.
Is there a willingness to ask this? I think it's just open information. I look to my colleague from the Bloc and my Liberal colleagues if there is an interest in quickly passing this motion so we could get back to the witnesses. All it is is a request by the environment committee to Tesla and any affiliates to provide the information I outlined in this motion, which would provide clarity for all Canadians, and certainly for this committee after such a back and forth that we had between one of my colleagues and one of the witnesses regarding this specific information.
There is simply one company that has this information. If we ask, we might just find out the answer and I think we could put the issue to bed once and for all.
I'd propose we quickly go to a vote, pass the motion and move on.
Liberal
Eric St-Pierre Liberal Honoré-Mercier, QC
I would ask that we give seven minutes, release the witnesses and thank them for their time, and then have an hour of committee business to discuss the motion. We would need a few minutes to read the motion.
I think it's a reasonable request to ask for seven minutes of additional time with the witnesses.
Conservative
