Prime Minister Mark Carney announced billions of dollars in financial aid and other measures for some of the industries hardest hit by the trade war with the United States, saying it would help Canada adjust to a “rupture” in the global world order.
The range of programs announced Friday includes hitting pause on a mandatory sales target for electric vehicles, a $5-billion Strategic Response Fund targeted at sectors directly affected by U.S. tariffs, financial aid for the agriculture sector, a “Buy Canadian” policy for the federal government, the expansion of employment insurance, and new training programs for workers.
The package was unveiled at the end of a week in which senior Canadian officials were back in Washington for trade talks, after a summer of little progress on ending tariff disputes with the U.S.
The focus of negotiations has shifted to sector-specific deals, rather than a new overarching trade pact, after several missed deadlines and an acknowledgment from Mr. Carney that any agreement with the U.S. is likely to include tariffs on some Canadian goods.
Prime Minister Mark Carney is pausing the electric-vehicle sales target for 2026 models and launching a review to determine what other changes to make to the policy.
The Canadian Press
In the meantime, Mr. Carney said the government will focus on domestic economic transformation.
“We know we need to act now, invest now, precisely when it’s hard,” Mr. Carney said Friday, at an aerospace company in Mississauga. “That’s why we’re charting an economic strategy to move our country forward from reliance to resilience, from uncertainty to prosperity.”
The decision to pause the EV mandate is the latest reversal of the marquee environmental policies of the Justin Trudeau government. One of Mr. Carney’s first acts as Prime Minister was to abolish the consumer price on carbon.
The EV sales mandate required the sale of new zero-emission vehicles to hit 20 per cent of total vehicle sales for the 2026 model year, 60 per cent by 2030 and 100 per cent by 2035, as part of a broader pledge on reducing carbon emissions.
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Now, automakers won’t need to hit those targets for 2026, and the government is reviewing the entire program.
Though Canadian manufacturers have a partial exemption from U.S. President Donald Trump’s 25-per-cent tariffs on foreign vehicles, the levy is hurting the sector. That, combined with slumping demand for EVs, led to warnings that the sales mandate could ruin the industry.
Many in the auto industry, and from the communities that are home to its workers, applauded Mr. Carney’s pause.
But Keith Stewart, a senior energy strategist at Greenpeace Canada, called out the Carney government’s move on EVs.
“We should be aligning with Europe, which is doubling down on renewable energy and electric vehicles, rather than bowing before Trump’s attack on people and the planet,” he said.
Conservative Leader Pierre Poilievre, who has called the mandates a war on cars, called the move a “clumsy retreat.”
“So now, businesses who would otherwise consider investing in automaking here in Canada will have to put that investment on hold while Mark Carney dithers for another year to try and figure out how he can ban people from putting gas and diesel in their trucks and cars,” he said.
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Mr. Carney was asked Friday whether he was open to scrapping the entire mandate, and what the pause says about his broader commitment to climate change.
Automakers have “enough on their plate right now,” he said.
“We’re using this as an opportunity, as part of a broader strategy on climate competitiveness, to look at all our measures to help get greenhouse gases down,” he said.
The assistance announced for the canola sector will also change another carbon emissions reductions program: clean fuel regulations. Canola producers are fighting a trade war on two fronts: one with China, and a second with the U.S. because of changes in policies there that make Canadians products harder to sell.
Ottawa aims to help beleaguered canola industry with moves to boost domestic biofuel production
Mr. Carney said Friday the regulations will be amended to make biofuel production easier, and the government will fund more domestic production of those fuels to stave off the potential loss of the sector.
Environmentalists, as well as Indigenous leaders, are also wary that Mr. Carney’s plan to speed up approvals for major projects will run afoul of environmental protections.
The Prime Minister’s plan to build faster is a centrepiece of his agenda to retool the Canadian economy.
The fusion between the Canadian and U.S. economies has gone from being a strength to a vulnerability and Canada must move on, he said Friday.
“What’s going on is not a transition, it’s a rupture, and its effect will be profound,” he said.
There were clear signs Friday of that effect. New numbers from Statistics Canada revealed the unemployment rate is at the highest level since 2016, outside of the early pandemic.
The changes announced to employment insurance programs involve extra weeks of benefits for workers who have spent significant time with one employer. The government is also extending previously announced EI measures that include waiving the waiting period to receive benefits.
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Ottawa will also automatically enroll EI claimants in a new digital tool to match them with available jobs.
The $5-billion Strategic Response Fund will help companies access the costs of reaching new markets, retool or expand. It replaces the Strategic Innovation Fund. Earlier this summer, the Carney government announced $1-billion through that fund to help the steel industry adjust to the new tariff regime; that money is part of the newly-announced fund.
The Canadian Chamber of Commerce – while welcoming the government’s ambition – warned the bill for Mr. Carney’s promises will eventually come due, and reiterated their call for a federal budget.
“The spending of today stays with us in the deficits of tomorrow,” said Matthew Holmes, the organization’s executive vice-president and chief of public policy.
“In the months ahead, we will need to see a realistic plan to maintain fiscal responsibility and return to balance for the long-term health of the Canadian economy.”