Prime Minister Mark Carney has suspended Canada’s 2026 electric vehicle sales target and launched a ‘Buy Canadian’ policy to bolster domestic industries facing economic headwinds and US trade pressures.
On Friday, September 5, 2025, Prime Minister Mark Carney announced the pause of the federal mandate requiring automakers to achieve 20% electric vehicle sales by 2026. A 60-day review will assess the feasibility of these targets amidst current challenges.
Concurrently, the government introduced a ‘Buy Canadian’ initiative, which prioritizes Canadian-made goods in federal procurement and establishes a fund to support local businesses in product development. This policy aims to enhance domestic competitiveness and resilience.
The decision comes as Canada’s economy shows signs of strain, with 66,000 jobs lost in August and unemployment rising to 7.1%, the highest since 2016 excluding pandemic years. Carney emphasized the need to focus on internal strengths amid external uncertainties.
US trade policies, including 25% tariffs on foreign vehicles and 35% tariffs on Canadian goods, have significantly impacted sectors like automotive, steel, and aluminum. While some exemptions exist under trade agreements, the pressures have compelled policy adjustments.
Opposition leader Pierre Poilievre criticized the move as a “flip-flop” and a “clumsy retreat,” arguing that it creates uncertainty for investors. He contended that businesses might delay decisions pending the review’s outcome.
Despite the pause, long-term environmental goals remain intact, with targets of 60% EV sales by 2030 and 100% by 2035. The government is also addressing other trade issues, such as supporting canola farmers facing Chinese duties.
Carney’s administration is engaged in trade talks with the US to seek relief for affected industries, following recent steps to drop some retaliatory tariffs. The ‘Buy Canadian’ policy and EV review are part of a broader strategy to navigate global trade dynamics.
Looking ahead, the 60-day review will shape future policy, potentially leading to adjusted targets or additional supports. The government aims to balance economic stability with environmental commitments, ensuring a sustainable path forward.