Industry and Technology Committee on Oct. 27th, 2025

[The Chair, Liberal, Ben Carr]

You are. Fortunately, you will have more.

Mr. Ste‑Marie, the floor is yours for six minutes.

[Gabriel Ste-Marie, Bloc, Joliette—Manawan, QC]

Thank you, Mr. Chair.

Greetings to all four of you. Thank you for being here and for all the information you are sharing with us.

My first question will be for Mr. Williams and Mr. Bernard. It concerns a subject we've been talking about for a few months.

The federal government had an electric vehicle subsidy program. If I understood correctly how it worked, when consumers bought a vehicle, the dealer gave them the rebate and then the retailer applied under the federal program to be reimbursed. However, we learned at the last minute and in a poorly communicated way that funding from the federal government had run out, creating a major shortfall for dealers.

Could you give us an update on that? Has the government committed to reimbursing you for that money? Has it appropriated funds for that, or does it intend to?

[Huw Williams]

Thank you for your question.

I'll turn the floor over to Mr. Bernard, but I would like to point out that all dealers who were waiting for money under this program have been reimbursed.

[Charles Bernard, Chief Economist, Canadian Automobile Dealers Association]

Dealerships were reimbursed as a result of pressure exerted not only by them, but also by representatives in Parliament, including members of the Bloc Québécois. We must nevertheless thank them for this work, which was done jointly. So the dealers were reimbursed.

This program worked well when it was in effect. As for its future, it's important to remember that this program relied on dealers to meet certain targets, which poses problems in terms of competitiveness. That's another discussion that will have to be had. I'm sure we'll be talking again about the implementation of the program, why this situation arose and the role of communication in the process.

However, the dealers were paid, and we thank parliamentarians for the work they did to make sure that happened.

[Gabriel Ste-Marie, Bloc, Joliette—Manawan, QC]

I'm very happy to hear that. Thank you very much.

My next questions are for Mr. Kingston.

Obviously, the main reason we're doing this study is the Stellantis announcement that they're going to move production of the Jeep Compass from their plant in Brampton to Illinois. You told us that it wasn't a closure of the Brampton plant and that other projects would be announced.

Before the committee today, can you guarantee that the number of jobs will be the same as if assembly of the Jeep Compass continued to be done in Brampton?

[Brian Kingston]

Yes. What we'll need to see, of course, is progress on the trade front, in particular with CUSMA. We need market certainty so that companies can continue with investments.

When you think about an automotive plant like we have in Brampton or in other parts of the country, these are long-term investments. These are huge plants, and companies intend to have them here for decades. We need certainty on the trade front. Then companies can proceed with decisions with respect to the Canadian footprint. As long as that uncertainty hangs over the economy, it will make it very challenging.

[Gabriel Ste-Marie, Bloc, Joliette—Manawan, QC]

The Stellantis announcement about moving the assembly to Illinois raises concerns that North American manufacturers are reviewing supply chains, given the uncertainty surrounding the tariffs imposed by the U.S. president, so that the production of vehicles sold on the American market no longer depends on the production stages made in Canada.

As you just said, projects to develop plants and partnerships take a long time. Are the manufacturers you represent currently redrawing their supply chains so that they don't need Canada to produce vehicles sold in the United States?

[Brian Kingston]

No, that's not happening. We deal regularly, weekly, with our counterparts in the United States, and the message that's being delivered consistently is that we exist as an industry, are competitive as an industry, because of the North American supply chain. You cannot change that overnight. You cannot change that in the course of one presidential term.

With the cost of moving manufacturing outright from Canada and Mexico to the United States, finding the employees, building the facilities, getting the utilities hooked up, this would be a mutli-decade project, and it would cost far too much.

It would also reduce the economies of scale. This industry is competitive because you build and sell into a market of 20 million vehicle sales. That is the objective of everybody in the automotive industry. I remain confident and optimistic that, for some of the reasons Mr. Williams pointed out, there's a deal to be had here. It works to the benefit of all.

[Gabriel Ste-Marie, Bloc, Joliette—Manawan, QC]

Based on my analysis of the situation, the tariffs imposed by President Trump, except for those on steel and aluminum dating back to his executive order in his first term, are illegal because they haven't been passed by both houses.

Are your American counterparts currently taking steps to eliminate these illegal tariffs in American courts, and are you hopeful that those steps will work?

[Brian Kingston]

Yes, absolutely.

[Gabriel Ste-Marie, Bloc, Joliette—Manawan, QC]

Thank you very much.

[The Chair, Liberal, Ben Carr]

Ms. Borrelli, I give five minutes to you.

[Kathy Borrelli, Conservative, Windsor—Tecumseh—Lakeshore, ON]

Thank you, Chair.

Mr. Kingston, you've warned that the government's EV mandate, which has a $20,000 penalty per gas-powered vehicle over the limit, is driving investment away. Meanwhile, Prime Minister Carney has said that Canadians must sacrifice during this transformation.

I'm baffled by the Liberal government solutions for these thousands of workers in Windsor, Brampton and Oshawa, who are already losing their livelihoods. They're being told that they're the ones who must continue to sacrifice, while government policy actively drives industry out of Canada.

In your expert opinion, what policy changes need to happen to secure our jobs and the long-term functioning of our industry here in Canada?

[Brian Kingston]

Repeal the EV mandate. It could be done today, and it would have an immediate benefit to the automotive industry.

Under the mandate, if companies don't hit the mandated targets, they have two options. One is to purchase credits from other companies, notably companies that are not invested here in Canada. Our estimate is that will cost the industry about $3.6 billion between now and 2030.

The second option is to pull vehicles from the market. There are 700,000 to 900,000 new vehicle sales pulled from the Canadian market every single year. For a Canadian customer looking to buy a car, it means there will be fewer on the lot and that the prices will be higher.

The pressure on the industry is originating from U.S. trade policy. It's effectively an own goal. There's no other way to put it. We can provide relief to the sector, but instead, we're keeping this punitive regulation in place, which is highly costly at the worst possible time.

[Kathy Borrelli, Conservative, Windsor—Tecumseh—Lakeshore, ON]

You're leading into my next question.

There are 700,000 cars pulled off lots every year. My goodness, at a time when owning a car is a luxury, do you believe that this government is forcing wasteful habits that are only hurting our economy instead of growing it? Also, where do all of those cars go?

[Huw Williams]

Dealers are on the front lines of this. I've said it publicly and I've said it privately. I say the same thing in private as I say in public on all of this. If they keep the EV mandate, rich people are still going to be able to afford cars. It's rural Canadians and Canadians from middle-class backgrounds who won't be able to afford cars.

There are only two ways the auto sector and dealers will have this managed for them by manufacturers. You either pay the $20,000 per vehicle or you sell fewer cars. Our dealers are worried sick that the global manufacturers, to meet these targets, are just going to put fewer cars on the marketplace. When you have fewer cars on the marketplace, there is less choice for consumers and prices go up. You can get the calculation for rural Canadians and Canadians from middle-class backgrounds. The whole thing is a pending disaster.

What's worse about it—I can maybe be a little more direct than Mr. Kingston or Mr. Adams on this—is you have two other governments that have EV mandates. We have the B.C. government and the Quebec government. They've told us that they're waiting for the federal government to move so they can get rid of the mandates there because they know they won't work. Everybody knows they won't work. I support the intentions behind this. Dealers support electric vehicles. We've invested hundreds of millions of dollars. Each dealer has put in more than $1 million to have the lifts, the charging infrastructure, put in their dealership, but what we can't have is a system that just subsidizes Tesla.

Mr. Ste-Marie mentioned that they get a subsidy on the front end of the purchase of the vehicle, but they also get a subsidy from all the other manufacturers who have to buy credits for them. If you want to help Tesla and not your local car dealer, keep the EV mandate.

[Kathy Borrelli, Conservative, Windsor—Tecumseh—Lakeshore, ON]

Mr. Adams, with Canada's light to EV vehicle production down 66% since 2015 and Stellantis redirecting production to the U.S., do you believe Canada has lost its credibility as a stable investment partner? What concrete reforms would restore confidence among global manufactures: lower taxes, faster approval, or simply a government that keeps its word?

[David Adams]

I think those last three things you mentioned are part and parcel of an overall broader strategy to continue to attract investment. If we're going to look at exploring our EV sector, then we need faster approvals to get product out of the ground. Fifteen years is too long to open a mine.

Regulatory redundancy across the country is challenging for all industries, not the least of which is the automotive industry.

Those are a couple of things that need to be done as well. However, none of this in a way is going to make that much difference if we can't go back to the original premise here of needing to ensure that we work to secure our trade arrangement with the United States, not only in the short term with the 232 tariffs, but also in the longer term through the review of the CUSMA-USMCA.

[The Chair, Liberal, Ben Carr]

Thanks, Ms. Borrelli.

Ms. O'Rourke, you have five minutes.

[Dominique O'Rourke, Liberal, Guelph, ON]

Thank you, Chair.

For clarification, the EV mandate is currently paused, will not apply to 2026 models and is under review. The Government of Canada has heard the concerns of the sector and understands the context has changed.

There are over 110 EV models available in Canada.

Mr. Adams, your members are actually leading in this space with very high percentages of EV and plug-in electric hybrid sales, so I appreciate that.

We all want to see those section 232 tariffs removed. We all want to see CUSMA renegotiated to get back to a healthy relationship. We're undergoing a study on productivity. None of this is productive.

I'll come back to a statement Ms. Borrelli made about Canada being a stable investment partner. Would you not agree it is the United States' imposition of tariffs that is creating the instability in the current market?

[Huw Williams]

I'm happy to take that question.

The instability, this trade rupture, is driven by one place. We all know the destination of this. On the EV mandate, because I'm so passionate about it, we're appreciative of the pause and 60-day consultation. Again, I say the same things publicly as I say privately. I met with officials from Environment Canada on Friday and they don't seem like they've read the entire playbook.

I think this really behooves members of Parliament at the political level to understand it.

I think your point is also well taken. We should plant a flag on the success of this. There used to be a challenge in terms of models available. There are over 100 models available. Consumers are taking Canadians up on this and they're charging forward on this. The adoption is happening, the technology is there. We need better charging infrastructure, we need to take into account Canada's climate, but mandates aren't the way to do it.

[Dominique O'Rourke, Liberal, Guelph, ON]

I hear you.

[Huw Williams]

Our dealers tell me all the time, “Don't be anti-EV, because we're not.”

[Dominique O'Rourke, Liberal, Guelph, ON]

I want to use the balance of my time to focus on the purpose of this study, because what is happening in the auto sector is a concern that we all share.

I appreciate the comments you made, Mr. Kingston, around the need for collaboration here.

One of the things that has been very successful in helping Canadian auto manufacturers is the strategic innovation fund. In your remarks, one of you indicated that is based on production.

Can you tell me, generally, how important these investments are and, to the degree that you can, how they are usually structured?

[Brian Kingston]

It depends on the company and the agreement. In response to the Inflation Reduction Act, there were a number of policies. You have the SIF program, run through ISED, which helps with capex. When a company is retooling a plant or building a new plant, they can access that fund.

What we saw was in response to what the U.S. had done: The U.S. introduced production credits, basically in an effort to pull investment into the United States. If you built a battery in the U.S., you would get a credit for every single battery that rolled off the line.

In addition to some of the traditional support for capex, we saw these additional production supports.

I want to note for the record here that sometimes the numbers the government has committed to this get overinflated because they're based on an assumption that companies were going to build plants on time and manufacture to the maximum.

Given what has happened to the EV market, which is in near collapse, no one is producing at those levels, so the amount of production subsidy that would go to companies in the battery supply chain is far below what was anticipated, but they were very critical to securing investment in Canada because the IRA was trying to draw that away.