Ottawa’s proposed zero-emission vehicle mandate threatens to eliminate all the positive momentum the federal government has built up on the automotive file over the past several years in “one clean swoop,” according to Ontario Premier Doug Ford.
Premier Doug Ford 'dead against' federal ZEV sales mandate
'The market dictates all the time, not the government. As soon as the government sticks their nose into something and starts mandating, it never works out'
ZEV Sales Mandate at a Glance
Proposed ZEV sales mandate percentage by model year:
2026 — 20
2027 — 23
2028 — 34
2029 — 43
2030 — 60
2031 — 74
2032 — 83
2033 — 94
2034 — 97
2035 — 100
The federal government proposed its ZEV legislation at the end of 2022 and is currently midway through a 75-day consultation period. As drafted, it would require ZEVs to make up 60 per cent of new-vehicle sales in Canada by 2030 and 100 per cent of sales by 2035.
“I am dead against that. It is not good for the industry,” Ford told Automotive News Canada in an interview Feb. 17.
“I can’t stand when government dictates to the private sector what to do,” he added. “The market dictates all the time, not the government. As soon as the government sticks their nose into something and starts mandating, it never works out.”
Ford said the government’s role should be reserved to clearing the way for new ZEV technology with regulations and offering incentives for manufacturers to produce clean-running vehicles.
The stance is consistent with the fine line the Ontario government has been walking on ZEV policy since before the pandemic.
The province is home to the majority of Canada’s automotive industry, including assembly plants for five global automakers. It has supported those plants’ transitions to ZEV production with hundreds of millions of dollars in funding, typically matching contributions from Ottawa. Queen’s Park has also been actively courting global investors looking to establish North American battery supply chain operations, and in March 2022, helped support a $5-billion investment in a battery cell manufacturing plant from Stellantis and LG Energy Solution.
At the same time, the province has repeatedly rebuffed calls to implement a ZEV incentive for consumers to complement the $5,000 rebate offered by Ottawa. This is despite a growing number of provinces, led by Quebec and British Columbia, offering additional purchase incentives of up to $7,000 for ZEV buyers.
Critics point to the lack of incentives as one of the key reasons Ontario is lagging the leaders on ZEV adoption.
In the third quarter of 2022, the most recent for which data is available, ZEVs respectively made up 17.6 and 12.5 per cent of new vehicles registered in B.C. and Quebec. Ontario followed at 7.2 per cent ZEV sales, below the national average of 8.7 per cent, according to Statistics Canada.
Quebec and B.C. also have provincial mandates on their books, requiring automakers to sell an escalating percentage of ZEVs over the next decade.
But as Ottawa fine-tunes legislation that will enact a ZEV mandate nationwide, the premier of Canada’s most populous province is not alone in pushing back.
Numerous auto industry leaders, including the Canadian heads of Toyota and Honda, which produce hundreds of thousands of vehicles in Ontario each year, have recently criticized the mandate’s aggressive timeline and one-size-fits-all approach.
“We're not afraid of regulation, but we are afraid this regulation will fail, and that it will fail with heavy consequences for the environment, for the economy and for average Canadians,” Toyota Canada CEO Larry Hutchinson told reporters and company stakeholders Feb. 15.
Hutchinson said Toyota is committed to eliminating carbon emissions across its fleet, but “complex problems, do not lend themselves to simple solutions.”
“We need to use all the tools in our toolbox. The federal ZEV policy, as currently drafted, attempts to address the climate change challenge with just one tool: the sale of new battery-electric vehicles.”
With limited availability of battery minerals and short-term ramp up challenges, Ottawa should not discount the role of hybrids and other technologies in cutting carbon emissions, Hutchinson added.
Honda Canada CEO Jean Marc Leclerc outlined a similar stance Feb. 8.
He warned the ZEV mandate will put the country’s automotive sector on a “collision course” with vehicle buyers, many of whom are not ready to go electric, or cannot afford ZEVs.
“If customer psychological barriers are not urgently addressed — affordability, range anxiety [and] charging infrastructure — mass adoption will not be possible,” he said at the inaugural EV Innovation & Technology conference in Toronto.
The federal government and supporters of the ZEV mandate, on the other hand, say sales requirements will boost the availability of ZEVs in Canada and accelerate adoption. Ultimately, the proposed legislation aims to put Canada on track to meet its 2050 emissions reduction goals.
Consultations on the ZEV mandate will run until March 16. Ottawa has said it plans to finalize the regulations this year.
But Ontario, among others, is pushing Ottawa to reverse course on the policy. Ford said the province is already talking with the federal government about the damage the mandate could do to the country’s auto sector.
“They have to change that. Simple as that.”