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Federal policy change will impact local auto production

September 18, 2025   ·   0 Comments

By Brian Lockhart

In a major policy shift aimed at revitalizing Canada’s auto industry and shielding it from the impact of U.S. tariffs, Prime Minister Mark Carny announced the delay of the federal Zero Emission Vehicle sales mandate.

That policy was originally planned to begin in 2026.

The move is part of a broader industrial strategy called ‘Building Canada Strong,’ which focuses on strengthening domestic manufacturing, supporting tariff-impacted sectors, and spurring innovation across key industries.

PM Carney said the ZEV mandate, which would have required 20 per cent of new vehicle sales to be zero-emission by 2026, and 100 per cent by 2035, will now undergo a 60-day review to assess its economic impact and feasibility.

This announcement will have a significant impact on New Tecumseth – home to Honda Canada Manufacturing.

A recent slowdown in electric vehicle sales, a pause of the federal iZEV rebate program, and the imposition of steep U.S. tariffs on Canadian-made vehicles have disrupted supply chains and delayed major investments. This includes investments like Honda’s proposed electric vehicle and battery plant.

New Tecumseth Mayor Richard Norcross welcomed the announcement.

“Prime Minister Carney’s decision to delay the ZEV mandate is a critical step toward stabilizing our local economy and protecting jobs in Canada,” Mayor Norcross said. “It reflects the voices of our communities and industry partners who have been advocating for a more flexible, realistic approach to electrification. While this is a big win for New Tecumseth and the Simcoe County Auto Mayors, we must continue working with Ottawa to address the tariff challenges that still threaten our competitiveness.”  

Earlier this summer, Mayor Richard Norcross brought together municipal leaders and industry partners to create the Simcoe County Auto Mayors. They issued a joint letter urging the federal government to include non-plug-in hybrid vehicles in the ZEV mandate. Their advocacy emphasized the need for transitional technologies to bridge the gap between traditional gas-powered vehicles and full electrification, especially in light of market pressures and infrastructure limitations.

The announcement was also welcomed by industry leaders, including Honda Canada, whose manufacturing operations in Alliston have long been a cornerstone of Simcoe County’s economy.

“We appreciate the Canadian government’s announcement today of a series of measures indicating its commitment to supporting the auto sector at this critical time, including the announcement to waive 2026 model year vehicles from the ZEV mandate requirement and launch a 60-day review as well as the supports announced under the Strategic Response Fund,” said Dave Jamieson, President and CEO of Honda Canada inc. “We look forward to consulting with the government to explore broader possibilities that better reflect current customer demand and the realities of our manufacturing supply chains, while developing a new broad policy framework that focuses on reducing greenhouse gas emissions, including policies that promote the sale of made-in-Canada hybrid vehicles. Honda’s current fleet is already among the most fuel efficient in Canada with the Canadian-built Honda Civic Hybrid and Honda CR-V Hybrid which have proven popular with Canadians.”

The announcement signals a renewed commitment to domestic resilience, regional collaboration, and economic growth — with New Tecumseth poised to play a leading role in shaping the future of Canadian auto manufacturing. 

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