TORONTO — The federal government has outlined a suite of measures it hopes to use to boost investment in Canadian auto manufacturing.

Along with dropping the electric vehicle sales mandate and restarting an electric vehicle rebate program, Prime Minister Mark Carney says the government is also increasing funding, reducing taxes and adjusting its tariff remission program.

“We have everything we need to take the lead in the vehicles of tomorrow, and we’re positioning Canadian workers and businesses to seize that opportunity,” said Carney on Thursday.

Speaking at a Martinrea International Inc. plant in Vaughan, Ont., Carney said the government plans to dedicate up to $3 billion from the Strategic Response Fund to support investment in auto manufacturing and $100 million from the Regional Tariff Response Initiative.

It also plans to launch consultations on how to strengthen an existing program that rewards automakers who maintain their Canadian production footprint with tariff exemptions on imports from the United States.

Carney says he plans to expand the remission program into a tradable system that will give credits to those who invest in Canada, and require those that don’t to buy those credits to avoid tariffs.

“Our strategy is to establish a comprehensive trade regime that strengthens the global competitiveness of our auto sector,” said Carney.

He also touted tax measures announced in its last budget that he says will make the country’s lowest marginal effective tax rate 4.5 percentage points below the United States.

The measures on electric vehicles were welcomed by groups representing automakers, but there wasn’t a clear endorsement that the policies would help manufacturing.

“We respect the government’s efforts to both sustain and encourage automotive investment in Canada, however, with all such announcements, the details matter,” said David Adams, head of Global Automakers of Canada, which represents Toyota, Honda and numerous other international automakers.

“The consultation, timing, and ultimate implementation of the initiatives announced today will be critical, with respect to their impact on industry.”

Brian Kingston, who leads the Canadian Vehicle Manufacturers’ Association representing the Detroit Three, was also cautious on the tariff plans.

“Forthcoming changes to the remissions program will require careful review and consultation as the top priority for the automotive industry is the removal of U.S. tariffs and the renewal of CUSMA,” he said in a statement.

The effort drew some support from Unifor, which represents workers at GM, Stellantis and Ford.

“This is a good foundation, but a lot of action is going to be needed, and there are some parts that are critically important that are not fully worked out yet,” said Unifor national president Lana Payne.

She said strengthening the remission program to cover all automakers is key to defending Canadian manufacturing.

“This only works if we have as a principle that if you’re going to sell cars in Canada, you must build in Canada. That ultimately is how we protect production.”

This report by The Canadian Press was first published Feb. 5, 2026.

Ian Bickis, The Canadian Press