CANADA'S AUTO DEALERS CALL FOR A COMPLETE RESET OF THE FEDERAL ZEV MANDATE

 (Ottawa, ON) November 27, 2025 - The Canadian Automobile Dealers Association (CADA) is urging the federal government to undertake a complete reset of the national Zero-Emission Vehicle (ZEV) sales mandate, warning that the current targets are no longer achievable and are placing growing pressure on consumers, local automotive businesses, and the Canadian economy.

 

CADA represents 3,400 franchised new car and truck dealers across Canada, employing more than 178,000 people and contributing over $28 billion to Canada’s GDP. Dealers have made significant investments to support the EV transition, but the mandated pace of change no longer aligns with what consumers can realistically afford or what the market can supply.

 

Affordability has become the defining barrier to EV adoption. National data shows that 67% of Canadians expect to pay less than $500 per month for a vehicle, yet the average monthly payment has climbed to $770 for leases and $880 for loans figures that continue to rise as tariffs and supply chain pressures intensify. These financial constraints are pushing many Canadians to delay purchasing newer vehicles altogether.

 

“The expectations set out in the ZEV mandate do not match what is happening in the marketplace,” said Tim Reuss, President at CADA. “With affordability concerns rising and new pressure created by U.S. tariffs, continuing on the current path risks making vehicles even more expensive for Canadians and undermining the competitiveness of our sector.”

 

CADA notes that dealerships across the country are facing compounding pressures: rising vehicle costs, prolonged economic uncertainty, and policy requirements that do not reflect consumer demand or Canada’s uneven charging infrastructure. These challenges are being felt in every region, from urban centres to rural communities where EV adoption remains significantly lower.

 

“Current EV targets simply don’t reflect what we’re seeing on the ground,” said Charles Bernard, Chief Economist at CADA. “Canadians are under growing financial pressure, and policy has to align with what consumers can actually afford.”

 

Dealers appearing before committee earlier today offered the following suggestions to support progress on the ZEV file:

• Suspend the EV mandate until the future of Canada’s auto industry is clearer based on the outcomes of the negotiations between Canada, the US and Mexico regarding tariffs and a new CUSMA (USMCA).
• The federal government works collaboratively with industry on a revised trajectory for targeted technology-neutral Zero Emission Vehicles sales to align with consumer preferences and the actual availability of charging options.
• Count ALL hybrid vehicles (not just plug-in hybrids) towards any new targets.
• Exclude EVs and all hybrids from the so-called luxury tax.
• Implement a mechanism to prevent automotive companies with no significant manufacturing or dealer footprint, investment, and employment in Canada, such as Tesla and Rivian, from profiting from the sale of their excess credits.
• The federal levels work with BC and Quebec to have ONE framework, not three separate and distinct ones.

 

“As economic conditions tighten, Canadians are becoming more cautious with major purchases, and we are seeing that reflected in EV demand,” said Reuss.

 

CADA remains committed to working with government and industry partners on an approach that supports consumers, reflects market conditions, and ensures Canada’s auto sector remains strong in every region of the country.