The Canadian Automobile Dealers Association (CADA) is pressuring the federal government to suspend and reconfigure its Zero-Emission Vehicle (ZEV) sales mandate, arguing that it reflects neither the current state of the market nor the financial capacity of households.
According to the association, price increases, interest rate pressure and supply limitations continue to slow the transition to electrification.
A market under economic strain
Appearing before a parliamentary committee this week, CADA reiterated that more than 3,400 franchised dealerships have invested massively in the infrastructure and training required for electric vehicles.
But despite these efforts, buyers are struggling to keep up: average monthly payments now exceed $770 for a lease and $880 for a loan, while the majority of Canadians aim for a budget of less than $500.
CADA president Tim Reuss warns that new American surtaxes on imported vehicles risk further increasing the cost of EVs and making them even less accessible.
Two realities when it comes to electrification
CADA also notes a growing gap between urban and rural regions. Major centres have a more developed charging network, which favours EV adoption. But elsewhere, particularly in remote areas, the scarcity of charging stations is delaying the transition and prolonging a reliance on internal combustion engines.
CADA's Chief Economist, Charles Bernard, argues that federal objectives “do not integrate regional disparities or the financial strain on households”.
Fear of a decline in competitiveness
Dealerships are also concerned that the mandate, as currently designed, limits the competitiveness of the Canadian automotive trade. Without better coherence between infrastructure, pricing, and targets, CADA believes the sector risks being disadvantaged compared to the American market.
CADA's recommendations
To get the plan back on track, the association proposes several measures:
- • Pause the mandate until the end of North American negotiations related to CUSMA (Canada-United States-Mexico Agreement), which could influence EV supply chains;
- • Exclude ZEVs and hybrids from the federal luxury tax, to reduce purchase costs;
- • Prevent companies without production or a dealership network in Canada from profiting by selling surplus ZEV credits;
- • Harmonize federal policies with the approaches of Quebec and BC to avoid a regulatory patchwork.
A supported transition, but one that needs review
CADA maintains that it remains supportive of the electrification of road transport but insists on the necessity of a realistic strategy, one that is better adapted to current economic conditions and what consumers can truly afford.
The association intends to continue discussions with Ottawa to create a more coherent and flexible framework.