Since the beginning of the Liberal government’s mandate, reaching net-zero by 2050 has been a major political objective. Electric vehicles (EV) are a critical element of the strategies that countries around the globe are adopting to meet their environmental goals. Canada is well-positioned to be a leader in the EV space because of Canada’s ability to deliver on the key segments of the EV supply chain. We have an abundance of critical minerals, as well as the ability to extract them. We also have a skilled workforce who can manufacture the vehicles and recycle their batteries at end of life.
International companies seem to be recognizing Canada’s natural advantages in the EV market and the federal government appears to be willing to put money on the table to seal the deal.
This past week, Ford Motors committed to investing $1.8 billion in its Ontario plant to transition to a new EV hub. Ford’s announcement is the latest commitment to transition towards an electric future. This is part of Ford’s overall commitment to invest over $50 billion in EV transition globally, and comes on the heels of a number of private sector announcements. Volkswagen recently revealed it would build its first battery cell plant outside of Europe in St. Thomas, Ontario. General Motors and Stellantis N.V. are already producing electric delivery vans in Canada. Stellantis is also working with LG Energy Solution to begin building an EV battery plant in Ontario.
The federal government in turn has provided funding to encourage more companies and sectors to innovate their business models to support EV production. Over $2 billion has been invested by the federal government to ensure EV manufacturing flourishes in Canada. Industry Minister François-Philippe Champagne said he has absolutely no problem justifying the use of taxpayer dollars pumped into multi-national companies trying to transition Canada’s electric future. Minister Champagne noted that governments must be part of the equation and that the returns on investment is “some of the best you can find in the market.”
Financial incentives aside, the federal government also introduced a new policy to ensure one-fifth of all passenger cars, SUVs and trucks sold in Canada in 2026 will need to run on electricity. Federal Environment and Climate Change Minister Steven Guilbeault has been leading the charge on this commitment. He is also mandated to help ensure Canadians have access to purchasing the EVs they want, working closely with Minister Champagne and Canadian supply chains.
Although these plans are ambitious, six in ten Canadians believe an electric vehicle will ultimately cost them less than a gas car and are supportive of the movement to an electric future. An Abacus Data poll from late last year found that 72% of Canadians believe that it is certain, very likely, or likely that a majority of consumer vehicles sold globally will be electric.
Although the electric future is not quite here, it is very near with these recent private sector, provincial, and federal funding investments and major legislative goals supporting a transition.
