Pembina Institute says EV investment welcome but emissions freeze hurts affordability

TORONTO · The Pembina Institute says a major new investment in electric vehicle manufacturing is welcome but warns that a freeze on vehicle pollution standards will hurt affordability for Canadian buyers. The federal and Ontario governments announced a $2.5 billion investment in EV manufacturing alongside a decision to freeze vehicle greenhouse gas emissions standards through 2029. Adam Thorn, clean growth director at the Pembina Institute, said the investment is an important step for an industry falling behind in the global transition, where nearly 30 percent of new cars sold this year will be electric. "Today’s $2.5 billion investment to help automakers build electric vehicles (EVs) is welcome news for an industry falling behind as the world transitions rapidly to EVs," Thorn said in a statement. "Alongside support for Canada’s critical mineral supply chain, it’s an important step toward building an auto industry that can compete in the growing global EV market." The investment is aimed at protecting and expanding approximately 130,000 jobs across manufacturing, batteries, critical minerals and charging infrastructure.

However, Thorn criticized the decision to delay stronger federal vehicle pollution standards, which were promised earlier this year to start in 2027, until 2029. "This makes its goal of 75% EVs by 2035 next to impossible, delaying progress toward giving Canadians more affordable vehicle choices," he said. The federal government has a target that 75 percent of new light-duty vehicle sales be zero-emission by 2035. Thorn argued that strong pollution standards encourage automakers to bring more electric vehicles, including lower-cost models, to Canadian dealerships. "As governments invest in building EVs, they also need to make sure Canadians can buy them," he said. The institute's research shows automakers operating in Canada can meet stronger pollution standards, despite industry claims to the contrary. Thorn said a strong standard would ensure those vehicles are available to Canadians, making car ownership more affordable and offering a lasting way to reduce reliance on gasoline.

"A strong standard would make sure those vehicles are available to Canadians, making car ownership more affordable and offering a lasting way to reduce their reliance on gasoline and gain greater control over their driving costs," Thorn said. The announcement was made by Prime Minister Mark Carney and Ontario Premier Doug Ford. The Pembina Institute has published research and analysis on the issue, including a report titled "Is the Auto Industry on Track?" and a backgrounder called "Getting the Vehicle Emissions Standard Right." The group has also published opinion pieces arguing that Ottawa must not abandon electric vehicles to align with Washington and that Canadians deserve affordable EVs, asking why they are paying more than the rest of the world. The institute's statement was issued by senior communications lead Lejla Latifovic.

With files from Pembina Institute