EDITOR’S NOTE: This story was updated Sept. 1 to include the Liberal platform, unveiled that day.
No matter the outcome of the Sept. 20 federal election, support appears secure for auto manufacturing and adoption of electric vehicles in Canada
Platforms for the country’s three leading political parties back such initiatives.
The snap election, called Aug. 15, comes as the auto industry continues to see strong demand for new and used vehicles but also as it wrestles with ongoing health and safety challenges during the fourth wave of the COVID-19 pandemic and the lingering microchip shortage.
Nearly halfway through the 36-day campaign, sliding support for the Liberals, and gains for the Conservatives and New Democrats, have lessened the chances any party will emerge from the vote with a majority government. The latest averaging of public polls from CBC News Sept. 1 shows Conservative support at 33.8 per cent, the Liberals at 31.2 per cent and NDP at 20.6 per cent.
Based on the detailed election platforms. the auto industry is expected to remain a federal priority regardless of which party forms the next government. What role policy levers, such as tax incentives, carbon emissions reduction targets and innovation funding will play in supporting the industry, however, will fall to Canadian voters.
Where the parties stand on the key automotive issues:
LIBERALS STICK TO FAMILIAR GROUND
The last of Canada’s leading political parties to share a detailed set of priorities, the governing Liberals released their full platform Sept. 1. The party is working to form its third government in six years, and under previous mandates has established a relatively consistent track record for automotive support and investment, particularly when it comes to electric vehicles. Its latest platform offers few surprises.
The government announced in June that all new light-duty vehicles sold in Canada be zero-emissions by 2035, advancing the previous goal five years. The new platform reiterates the 2035 target, as well as commits to working with industry to develop a regulated sales requirement that would make 50 per cent of light-duty vehicles zero-emissions by 2030.
The plan pushes up the timeline for creating an all-ZEV federal fleet as well. The Liberals now plan to electrify all federal vehicles by 2030, compared to 80 per cent of the federal fleet by 2030 previously.
For the average Canadian, the shift to ZEVs is supported by a consumer incentive program – launched in 2019 -- that covers up to $5,000 of eligible vehicles. The Liberal platform pledges an additional $1.5 billion to expand the iZev rebate, making a wider range of vehicles, including used vehicles, eligible.
The plan also sets a target for charging station installations. The party said it will invest an added $700 million to build 50,000 new EV chargers and hydrogen stations – though hydrogen vehicles are not otherwise mentioned in the platform. Another $100 million will be put toward charging station installations in existing buildings.
The Liberals’ record on a national carbon tax is well established, and the new election platform highlights few adjustments. The government forced provinces without a price on carbon to adopt one in 2019 and has set targets to increase the price of carbon to $50 per tonne by 2022. The federal framework includes both added charges on fuel and a performance-based system for industries, including automotive. It allows provinces to establish their own carbon tax regimes, but requires they meet federal benchmarks. Under the Liberal plan, the carbon tax will increase $15 per tonne annually after 2022, reaching $170 per tonne by 2030. The tax will increasingly hit consumer wallets at the pump and automakers’ bottom lines – depending on plant CO2 emissions – as it creeps higher.
For automakers, the Liberals’ platform pledges continued support for the $8 billion Net-Zero Accelerator Fund, which backs industrial innovation projects, but introduces no new programs. In this year’s budget, the government proposed reducing the corporate tax rate on car companies building ZEVs. It is currently analyzing feedback from industry stakeholders on the plan that would, starting in 2022, cut in half the tax rate for makers of EVs and batteries.
Also introduced in the 2021 budget, the Liberals’ tax on vehicles costing $100,000 or more has sent shockwaves through the high-end vehicle market, with opponents criticizing the proposed tax as damaging to sales and ineffective. Consultations between government and industry remain ongoing, and the latest election platform recommits to the tax.
CONSERVATIVES ‘GO BIG’ ON EVS
The Conservative platform focuses on helping the economy bounce back from the pandemic. Among other headline pledges, the party aims to get one million Canadians back at work over 12 months. It also wants a balanced federal budget by 2031.
On the automotive front, the party plans to “go big” on zero-emissions vehicles (ZEVs), pledging $1 billion to build out electric-vehicle manufacturing sites, battery plants and parts facilities. It has earmarked another $1 billion to deploy hydrogen vehicles, and other hydrogen technologies, such as those for producing and exporting blue and green hydrogen.
The platform makes no mention of the recent Liberal goal of having ZEVs account for all new passenger vehicles sales by 2035. Instead, a Tory government would introduce a ZEV mandate that takes a page from British Columbia’s, which requires ZEVs account for 30 per cent of light-duty sales by 2030.
Infrastructure to support the increasing number of EVs would receive support as well. Pledging to work with provincial and municipal governments, the Conservatives plan to require a minimum number for EV chargers in new developments, but did not point to how many. All federal buildings would need to have chargers by 2025. The party would also make investments in recycling end-of-life batteries to improve the carbon footprint of EVs.
But, consumer incentives for the purchase of EVs are not in the plan. Instead, as part of a wider carbon-pricing scheme, the Tories plan to create Personal Low Carbon Savings Accounts for all Canadians. Funds from the accounts could be used to pay for EVs or other low-carbon products, such as energy-efficient furnaces or windows. Walking back previous pledges to scrap the carbon tax outright, as in the party’s 2019 election platform, the Conservatives say they will tie Canada’s industrial carbon price to the United States and European Union. Linking the carbon tax on industry to the country’s largest trading partners will ensure Canadian businesses do not face un uneven playing field when competing for investment, the party says.
Red-tape reduction and tax changes to incentivize investment in Canada are two other tenets of the Conservative platform, though it offers few specifics on either. The plan includes broad commitments to simplifying the tax system through the recommendations of a new expert panel and appointing a red tape czar responsible for doing away with burdensome regulations.
The Conservative platform puts a new federal tax on luxury vehicle purchases under the microscope as well, though stops short of committing to it. The Tory promise to look into the levy comes as the Liberals government holds consultations on its own plan to impose a tax on vehicles worth over $100,000 in this year’s federal budget. The Conservative party makes no direct reference to the Liberal plan, but pledges to study the potential of new taxes on non-electric luxury vehicles, apparently giving EV buyers a pass.
LIBERALS PLAY IT CLOSE TO CHEST
The party’s 2021 platform will be released “in due course” during the campaign, Automotive News Canada was told when seeking details on the Liberals’ auto-related plans.
Despite the lack of new promises so far this campaign, the governing party, working to form its third government in six years, has a relatively consistent track record for automotive support and investment, particularly when it comes to electric vehicles. For instance, the government announced in June that all new light-duty vehicles sold in Canada be zero-emissions by 2035, advancing the previous goal five years. The approach is supported by a consumer incentive program that covers up to $5,000 of eligible ZEVs.
The Liberals’ record on a national carbon tax is equally clear. The government forced provinces without a price on carbon to adopt one in 2019 and has set targets to increase the price of carbon to $50 per tonne by 2022. The federal framework includes both added charges on fuel and a performance-based system for industries, including automotive. It allows provinces to establish their own carbon tax regimes, but requires they meet federal benchmarks. Under the Liberal plan, the carbon tax will increase $15 per tonne annually after 2022, reaching $170 per tonne by 2030. The tax will increasingly hit consumer wallets at the pump and automakers’ bottom lines – depending on plant CO2 emissions – as it creeps higher.
Supports for automakers are prevalent as well. Along with longstanding programs for innovation and expansion projects, the government proposed reducing the corporate tax rate on car companies building ZEVs in the 2021 budget. It is currently analyzing feedback from industry stakeholders on the plan that would, starting in 2022, cut in half the tax rate for makers of EVs and batteries.
Also introduced in the 2021 budget, the Liberals’ tax on vehicles costing $100,000 or more has sent shockwaves through the high-end vehicle market, with opponents criticizing the proposed tax as damaging to sales and ineffective. Consultations between government and industry remain ongoing.
NDP LOOKS TO TRIPLE ZEV INCENTIVES
Where the Conservative platform skews toward economic recovery, the NDP plan trumpets affordability for individuals.
On the automotive file, this translates to greatly increasing ZEV incentives for consumers. The NDP said it would waive the GST on ZEV purchases, as well as grow the current $5,000 purchase incentive up to $15,000 – though it adds the caveat “per family.” The maximum incentive would apply only on Canadian-made ZEVs.
As with the current government, the NDP wants 100 per cent of new-vehicle sales to be ZEVs by 2035. Turning to made-in-Canada options “whenever possible,” the NDP commits to an electric federal vehicle fleet by 2025.
Tracey Ramsey, the NDP candidate for the Ontario riding of Essex, said the party would focus on building networks of public charging stations in partnership with cities, provinces and territories. It would help purchasers of a new or used ZEV cover the cost of installing a charger as well.
The NDP plans to convene an automotive summit that will bring together government, industry and labour to build a National Automotive Strategy designed to protect jobs and attract new investments to Canada’s sector. The platform also commits to rolling corporate tax rates back to their 2010 level of 18 per cent – for all but small businesses – from 15 per cent currently. The Automotive Innovation Fund, which was launched in 2008 to attract automotive research and development projects to Canada, before being rolled into the Strategic Innovation Fund in 2017, would also be reinstated under the NDP plan. The party would make contributions to automakers non-taxable to support new production capacity. In response to the ongoing microchip shortage, Ramsey said the NDP is calling for Canadian manufacturing of chips and other key parts to ensure the domestic auto industry can sustain itself.
Commissioning a study into the causes, consequences and possible solutions for the trade deficit in auto parts with Mexico is among the NDP’s other manufacturing pledges.
As with the Liberals – and Conservatives with their recent about-face, the NDP supports a carbon-tax system. The platform offers few specifics on future pricing, however. It notes it will eliminate “loopholes” in the current system given to “big” polluters, though does not single out any industries currently exploiting workarounds.
The NDP also pledges to enact a luxury tax on “things like” yachts and private jets. Mention of applying the new tax to luxury vehicles is absent from the section, but not specifically ruled out.