Should Canada mandate sales targets for electric vehicles?

OTTAWA — Whether Canada should introduce a national mandate requiring the auto industry to make or sell more zero-emission vehicles is a question facing the Liberal government as it’s not on the road to meet its own targets.

The vehicles, known as ZEVs, are seen by Ottawa as a way to help cut the country’s greenhouse gas emissions to get to net-zero by 2050 and slash them by up to 45 per cent below 2005 levels within the decade.

Together, light-duty passenger trucks and cars typically make up the biggest polluting culprits within Canada’s transportation sector.

A parliamentary committee tasked with studying how to incentivize the purchase and production of electric vehicles recently recommended that Ottawa work with provinces and industry to “establish a national ZEV standard.”

Essentially, it’s a regulation that would require manufacturers and companies to make or sell a certain number of electric vehicles by issuing them credits and setting targets.

Such programs exist in British Columbia and Quebec — which lead the country, along with Ontario, for where most of Canada’s electric vehicles have been registered.

The committee’s final report says the design of such programs differs slightly by jurisdiction. It recommends any mandate be developed “while respecting constitutional responsibilities and the deep integration of the North American automotive market.”

A statement from Transport Minister Omar Alghabra’s office says it remains “open to all options, that would encourage the adoption of zero-emission vehicles.”

Introducing a standard for zero-emission vehicles is among the ideas pitched by the Conservatives in the party’s recently released climate plan.

In its study, the parliamentary committee heard that only one-third of car dealerships in Canada had a zero-emission vehicle actually in stock.

Sarah Petrevan, a policy director at Clean Energy Canada, said aside from the cost of the vehicles, their availability is one of the barriers to getting more on the road.

“The one thing that a ZEV standard does is help ensure that there’s supply,” she said.

“If somebody does want to buy a zero-emission vehicle or they’re interested in it, it’s available at the dealership lot, they can test it, they can try it, they can buy it.”

Statistics Canada reported in April that only around 3.5 per cent of the vehicles registered in the country last year were electric.

David Adams, president and CEO of Global Automakers of Canada, said the writing is on the wall for the industry that the future is electric, but he believes a mandated sales target isn’t the best way to get there.

He contends that financial incentives are driving the uptake of such vehicles, which need to be supported by more education and charging infrastructure.

The Liberal government has been offering cash rebates of up to $5,000 for buying a fully electric car and up to $2,500 for plug-in hybrid models. The maximum purchase price of the lowest-end model can’t be over $45,000.

The government says the $300-million-program has been so popular that as of last November, $255 million had already been claimed since it was introduced in May 2019.

Even with rising sales and millions spent to build more charging stations, Transport Canada has said more needs to be done to meet the department’s first target to have 10 per cent of all light-duty cars be electric by 2025.

Adams believes one of the risks with a mandate is that it could force auto companies to manage their fleets to ensure they are not selling more vehicles powered by internal combustion engines than electric ones out of concern for facing penalties.

That could result in people looking to buy a truck or SUV turning to the United States if they couldn’t find what they’re looking for in Canada.

“And most consumers, I mean, let’s face it, if they drive an SUV or a pickup truck they’re not going to all of a sudden say, ‘Oh well, I don’t want that vehicle, I’ll substitute it for a sedan instead.'”

Adams said with more models of electric vehicles expected to hit the market in the years ahead, fear among dealers is there will not be enough buyers to support demand, which is why rebate programs should continue until the price of electric vehicles gets close to non-electric ones.

Petrevan said the transportation sector is a huge source of Canada’s emissions of heat-trapping gases, second only to the fossil fuel industry.

And as Canada faces increased pressure from countries like the United States, United Kingdom and European Union to more aggressively curb emissions, it needs greater focus on what’s on the road.

“We actually have to do something in the transportation sector to not only reduce emissions but to encourage and support the economic transition that Canada’s auto-sector is facing.”