Good morning.
The Canadian Automobile Dealers Association represents 3,400 franchised new car and truck dealers across Canada that directly employ over 178,000 people, contribute $28 billion to Canada's GDP and pay over $6 billion in federal, provincial and municipal taxes. This year, our members will sell over 1.9 million new vehicles, 1.3 million used vehicles and write 31 million repair orders.
Our members have collectively invested over $3.4 billion in the EV transition, but the current mandated pace of the EV transition is not in line with consumer demands or Canada's logistical challenges.
When the electric vehicle availability standard was introduced, the federal government made a number of statements and commitments specifically related to affordability that are not valid anymore:
...consumer purchases of ZEVs will be supported by $2 billion invested by the Government of Canada in the Incentive for Zero Emissions Vehicle Program (iZEV).
That support was initially paused and now has been officially cancelled. The mandated targets were improbable to begin with due to weak consumer demand, technology limitations across vehicle segments and use cases, as well as infrastructure shortfalls. Removing the purchase incentives moved these targets from improbable to impossible.
The Prime Minister and cabinet's decision to pause the 2026 mandates was a very good first step. We appreciate the many opposition and government MPs who have raised this issue as a concern for consumers and for the country.
Now is the time to take the next step and remove these unnecessary mandates altogether. Other existing federal-level regulations will reduce emissions without dictating technology. The Prime Minister has correctly labelled this time a historic trade rupture. In the spirit of all sides coming to the table during this crisis, we make the following suggestions for progress.
Suspend the EV mandate until the future of Canada's auto industry is clearer, based on the outcomes of the negotiations between Canada, the U.S. and Mexico regarding tariffs and a new CUSMA or USMCA.
The federal government should work collaboratively with industry on a revised trajectory for targeted, technology-neutral zero-emission vehicle sales to align with consumer preferences and the actual availability of charging options.
Count all hybrid vehicles, not just plug-in hybrids, towards any new targets.
Exclude EVs and all hybrids from the so-called luxury tax.
Implement a mechanism to prevent automotive companies with no significant manufacturing or dealer footprint investment and employment in Canada, such as Tesla and Rivian, from profiting from the sale of their excess credits.
Last, the federal government should work with B.C. and Quebec to have one framework, not three separate and distinct ones in Canada.
Our chief economist will now provide some data perspectives.
Charles.