Canada's auto strategy: should it invest more in U.S. automakers?

The Carney government has reintroduced federal EV rebates, pledged $1.5 billion for fast-charging and proposed up to $3 billion to help Canada’s auto sector adapt. The article questions whether some of that money should go to U.S. automakers given their retreat from EVs and underused Canadian plants.

The federal government unveiled a new auto strategy that restores EV rebates, commits $1.5 billion to fast-charging networks and offers up to $3 billion to support the auto sector. The plan arrives amid slower EV adoption after earlier rebate cuts and a broader shift in global auto markets toward electric vehicles. Ottawa has also partially opened the Canadian market to lower-priced Chinese EVs under a quota and preferential tariff. The article examines whether channeling some federal funds to U.S.-based automakers would best serve Canada’s goal of boosting EV adoption and manufacturing capacity. Key facts: - The Carney government restored federal EV rebates and pledged $1.5 billion for EV fast-charging networks, plus up to $3 billion to help the auto sector adapt. - EVs made up 10.4 per cent of new vehicle registrations in Canada in the third quarter of 2025. - The Pembina Institute estimates EV owners can save up to $40,000 per vehicle over 10 years in lower maintenance and fuel costs. - Canada partially opened its market to Chinese EVs with a first-year quota of 49,000 vehicles and a preferential tariff rate of 6.1 per cent; the U.S. maintains a 100 per cent tariff blocking Chinese EVs. - Canadian vehicle assembly fell more than 47 per cent over the past decade to about 1.2 million passenger vehicles and light trucks in 2025, while Mexico produced over 3.9 million vehicles in 2025. - A report from the Trillium Network for Advanced Manufacturing says several assembly plants owned by U.S.-based automakers in Canada are idle or under capacity, and labour productivity in the sector dropped from $118 an hour in 2015 to $69 an hour in 2024. Summary: The government’s package aims to accelerate EV adoption and strengthen Canada’s EV manufacturing ecosystem while responding to slower recent uptake. The article argues that directing funds to U.S.-based automakers that have reduced EV commitments and underutilize Canadian plants may not advance those goals. Ottawa plans to provide more detail on how the $3 billion will be allocated in the coming weeks, and the specific distribution of funds remains undetermined at this time.