On September 5, 2025, the Government of Canada (the " Government ") announced a one-year delay to the implementation of its zero-emission vehicles sales mandate (" ZEV Sales Mandate "), originally set to begin in 2026.1 The pause will remove the target for 2026 model year vehicles. 2 The mandate would have required that starting in 2026, 20% of all new passenger cars sold in Canada be zero-emission vehicles (" ZEV "). 3 The ZEV Sales Mandate encompasses a steady ramping up of the 20% target year over year, to reach 100% ZEV sales by 2035. 4 For an overview of the regulations imposing the ZEV Sales Mandate, see McMillan's previous bulletin on the program here .
The Government will be conducting a 60-day review of the ZEV Sales Mandate framework during the break. This review is meant to reduce the economic pressure on automated manufacturers due to tariffs and ensure the mandate "reflects market realities, remains effective for Canadians, and avoids imposing undue burdens on automakers." 5 The Government will also consider amendments to subsequent annual sales targets and "explore additional flexibilities." 6 The pause does not eliminate Canada's long-term ZEV sales targets, but it does introduce a certain degree of uncertainty for industry regarding the future of ZEV sales targets in Canada.
Notably, the announced delay only affects the federal ZEV Sales Mandate and does not affect provincial ZEV programs, like those in Quebec and British Columbia, which remain in place for now.
Footnotes
1. Government of Canada. Prime Minister Carney launches new measures to protect, build, and transform Canadian strategic industries. September 5, 2025.
2. ibid
3. Regulations Amending the Passenger Automobile and Light Truck Greenhouse Gas Emission Regulations, SOR/2023-275 .
4. ibid .
5. supra note 1 .
6. ibid .
The foregoing provides only an overview and does not constitute legal advice. Readers are cautioned against making any decisions based on this material alone. Rather, specific legal advice should be obtained.
© McMillan LLP 2025
