Minister Joly highlights the Government of Canada's new Auto Strategy

Launch of new strategy to transform Canada's auto industry

GUELPH, ON, Feb. 6, 2026 /CNW/ - Today, Mélanie Joly, Minister of Industry and Minister responsible for Canada Economic Development for Quebec Regions, visited Linamar, a Canadian company and global leader in advanced automotive manufacturing, to highlight the Government of Canada's new Automotive Strategy. The world is changing rapidly, fundamentally reshaping trade relationships and leaving economies, businesses and workers under a cloud of uncertainty. Canada's automotive industry is on the front line of this shift, with more than 90% of Canadian-made vehicles and 60% of Canadian-made auto parts currently exported to the U.S.

The government is focused on what we can control--implementing a new industrial strategy. Canada is transforming the economy from one that is reliant on a single trade partner to one that is more resilient to global shocks--a stronger, more sustainable, more independent economy built on the solid foundation of strong Canadian industries and bolstered by diverse international trade partners. In parallel, the government is launching a national electricity strategy to leverage our energy advantage to provide clean, affordable and reliable power to Canadians.

These shifts present a unique opportunity to transform Canada's auto industry to be less reliant on the U.S. and gas-powered vehicles. To that end, the government has introduced a new auto strategy that rewards the production of made-in-Canada vehicles and harnesses our world-class capabilities in artificial intelligence and technology expertise to build the cars of the future. This is a strategy that positions Canada to become a global leader in electric vehicle (EV) production.

On February 5, Prime Minister Mark Carney announced the following new measures:

1.  To accelerate investment in Canada's auto manufacturing sector, the government will:

• allocate $3 billion from the Strategic Response Fund and up to $100 million from the Regional Tariff Response Initiative to help the auto industry adapt, grow, and diversify to new markets.
• harness the Productivity Super-Deduction and reduced corporate tax rates for zero emission– technology manufacturers to encourage investment in clean technologies and EVs.

2.  To rationalise emissions reduction policies to focus on outcomes that matter to Canadians, the government will:

• introduce stronger greenhouse gas emission standards for model years 2027–32. These standards will put Canada on a path to achieve a goal of 75% EV sales by 2035 and 90% EV sales by 2040--reducing our carbon footprint and securing Canada's global leadership in clean energy.
  • These more stringent emissions standards will enable the Government of Canada to repeal the Electric Vehicle Availability Standard. This approach will allow manufacturers to use a wide array of technologies to meet the standards and respond to consumer preferences in the near term, while driving EV adoption over time.

3.  To build up a domestic consumer base and make electric vehicles more affordable and reliable, the government will:

• launch a five-year EV Affordability Program to lower the cost of EVs for Canadians and create a stronger domestic consumer market.
• • The new $2.3 billion program will offer individuals and businesses purchase or lease incentives of up to $5,000 for battery electric and fuel EVs, and up to $2,500 for plug-in hybrids (PHEV) with a final transaction value up to $50,000 on cars made by countries Canada has free trade agreements with. To support the Canadian automotive industry, this $50,000 cap will not apply to Canadian made– EVs and PHEVs.
• enhance our national EV charging network through investments of $1.5 billion through the Canada Infrastructure Bank's Charging and Hydrogen Refuelling Infrastructure Initiative, making it easier and more convenient for drivers to charge their EVs across the country.

4.  To establish a comprehensive trade regime that strengthens the competitiveness of the auto sector, the government will:

• strengthen Canada's automotive remission framework to reward companies that produce and invest in Canada.
• maintain counter-tariffs on auto imports from the United States to ensure a level playing field for Canadian automotive manufacturers in the domestic market.
• build on its recently strengthened strategic partnership with the Republic of Korea by signing a memorandum of understanding (MOU) to strengthen Canada Korea– industrial collaboration for future mobility. This builds on other MOUs that Canada has signed with global automakers to promote cooperation.
• focus on establishing a new strategic partnership with China, a global leader in EV manufacturing, to further diversify trade and catalyse new investment in the automotive sector. The recently announced partnership will look to drive new Chinese joint venture investment in Canada and allow for a fixed volume of Chinese EV imports into the Canadian market.

5.  To protect Canadian auto workers and businesses from immediate pressures while helping them bridge them to the future, the government will:

• provide support to employees through a new Work-Sharing grant--preventing layoffs and supporting worker retention so businesses can plan for the future.
• establish a new workforce alliance of industry, labour and training partners to address bottlenecks and catalyse private investment.
• provide employment assistance and reskilling supports for up to 66,000 workers across Canada, including for displaced auto workers, through a $570 million investment.

The government will leverage our new and existing trade agreements--including the recent EV arrangement with China--to catalyse massive new investment in the sector, diversify Canada's auto export markets and position Canada as a global leader in EVs. Canadian workers and industries are well equipped to seize this opportunity, and we are making generational investments in critical minerals, including those essential for batteries, to secure Canada's place in the world's most important supply chains.

The choices made now will shape the Canadian auto industry for decades to come. By protecting the industry and incentivising automakers to build here, we are helping ensure that Canada's workers and businesses can transform to compete and win in this new global environment.

These measures build on previously announced initiatives to help transform strategic Canadian industries, including steel and softwood lumber. Together, they form an ambitious industrial strategy that will build a stronger, more resilient, more independent Canadian economy and ensure workers and industries can bridge to that future and seize its opportunities.

Canada is a nation of builders and our auto sector has grown and powered communities across the country for more than a century. The skills and dedication of Canadian auto workers is at the heart of this new strategy. Our new government's message is clear: Canada intends not only to keep building vehicles at home, but to shape the future of the industry with Canadian workers at its core.

Quote

"Canada is an auto nation and home to world-class vehicle manufacturers. With facilities across the country and operations around the globe, Linamar stands as a prime example of Canadian manufacturing excellence. Our government's new auto strategy will strengthen the sector here at home, invest in the growth of industry leaders,  and ensure Canadian workers are building the vehicles of the future."
– The Honourable Mélanie Joly, Minister of Industry and Minister responsible for Canada Economic Development for Quebec Regions

"Today, Canada is a global leader in auto parts, assembly and innovation. We will leverage that excellence by investing in the best auto workers in the world, supporting domestic production, and setting our sights on global leadership in electric vehicles – for Canada and for the climate. The return of EV incentives, a $1.5 billion investment to build a national EV charging network, and stronger greenhouse gas emission standards that put Canada on a path to achieve a goal of 75% EV sales by 2035 and 90% EV sales by 2040, all mean we can grow the auto sector successfully and sustainably."
          -  Dominique O'Rourke, Member of Parliament for Guelph.

Quick facts

• Canada's auto sector supports over 500,000 workers, contributes over $16 billion annually to Canada's GDP and is one of the country's largest export industries. In 2025, Canada produced over 1.2 million passenger vehicles.
• As over 90% of Canadian-made vehicles and 60% of Canadian-made parts are exported to the United States, U.S. automotive tariffs are threatening Canada's automotive manufacturing industry and the 125,000 direct jobs it supports.
• Since April 2025, Canadian-made vehicles have faced a 25% U.S. tariff on non-U.S. content (the value of U.S. content in CUSMA-compliant autos is exempt).
• Within five years, EV sales are projected to reach nearly 40% of global car sales.

Related products

• News release: Prime Minister Carney launches new strategy to transform Canada's auto industry 
• Backgrounder: Prime Minister Carney unveils Canada's new automotive strategy to protect jobs and position our country as a global leader in next-generation vehicle manufacturing

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Contacts: Gabrielle Landry, Press Secretary, Office of the Minister of Industry and Minister responsible for Canada Economic Development for Quebec Regions, [email protected]; Media Relations, Innovation, Science and Economic Development Canada, [email protected]