Timely report on Canadian EV policy offers a sweeping list of 13 recommendations that also include the development of domestic supply chains for ZEV components, including batteries, and consideration of dedicated funding to retrain automotive sector workers for ZEV production

The Parliamentary Standing Committee on the Environment and Sustainable Development is recommending that the federal government establish a national Zero Emission Vehicle standard — also known as a ZEV mandate — as part of a sweeping list of 13 recommendations to “encourage the production and sale of ZEVs in Canada” and enable the government to meet its target of having ZEVs make up 100 per cent of new light-duty vehicles sales by 2040.

“The Committee heard that Canada will not fulfill the federal sales targets unless it takes additional measures to encourage the adoption of ZEVs,” the report states.

Further, in Recommendation 7, it “recommends that the Government of Canada work with industry and the provinces and territories to establish a national ZEV standard, while respecting constitutional responsibilities and the deep integration of the North American automotive market.”

ZEV standards can take on different forms, but all are designed to require vehicle producers to sell a minimum number of zero-emission vehicles in all markets, with some kind of sliding scale that increases the minimum over time.

In Canada right now, both B.C. and Quebec — the provinces where ZEVs have the highest market penetration — have provincial ZEV standards. Numerous other counties have them, particularly in Europe. Eleven U.S. states have them also.

“Significant development”

“This is a significant development in a growing series of major developments that are turning the North American automobile industry on its head,” says Martin Olszynski, a law professor at the University of Calgary and one of the witnesses who presented his views to the committee.

The report, released Tuesday, delves deeply into all major aspects of the Canadian ZEV landscape. It includes recommendations to enhance the federal iZEV consumer incentive program, encourage development of a national battery and vehicle manufacturing supply chain and revise building codes to encourage charging infrastructure installation.

However, the ZEV standard proposal stands out as it is a policy lever that the government has, to this point, opted not to pursue — in part due to significant opposition primarily from Canadian automotive manufacturers and associations representing domestic and international vehicle makers.

The report acknowledges this opposition and is careful not to prescribe a specific approach for the recommended ZEV standard policy.

“If the Government of Canada wished to adopt a ZEV standard, it would have to study the best way to do so within federal jurisdiction,” the report states.

It cites witnesses, for example, who proposed an approach whereby the federal government adopt a standard as a “backstop” while encouraging provinces to develop their own standards, much as it has done with carbon pricing. Another option cited involves tightening vehicle emission regulations in such a way that they could only be met by selling more ZEVs.

North American context

Olszynski’s comment about viewing this report in the context of a changing North American vehicle landscape is apt, given President Joe Biden’s recent bold policy moves to electrifying that country’s transportation sector.

“From that perspective and bearing in mind that Canada is usually a policy taker in this space, this Committee report and its recommendations may be seen as simply going with the flow,” says Olszynski. “But that would ignore the fact that, throughout the Trump administration, the Trudeau government stood firm on emissions standards and quietly built a partnership with California and its allies. Viewed this way, the Committee’s recommendations are a natural progression of the Liberals’ approach to this file and can reasonably be considered as reflective of their intentions.”

In all, 21 witnesses presented to the Committee in four rounds of hearings last fall. The Committee also received 17 briefs. Submissions came from a wide range of stakeholders, including automotive manufacturers and suppliers, charging network providers, industry associations, non-governmental policy organizations and multiple federal departments.

The Committee consists of 12 MPs, representing different parties, with other MPs also participating.

On the topic of vehicle incentives, the Committee recommended several changes to the federal iZEV program, “including expanding its coverage to used vehicles, creating a program to trade in old vehicles for scrap, and collecting more data to better understand the demographics of users of the incentive.”

In terms of the supply chain, it calls for the government to “review and build on existing programs, such as the Strategic Innovation Fund, to facilitate the continued development of domestic supply chains for the full lifecycle of ZEV components, including batteries.”

It’s important to note these recommendations are not binding, rather they are a reflection of the conclusions drawn after an intensive and long term research process. The report in and of itself will not impact or change legislation unless the government chooses to accept some, all or none of the recommendations.

Under the terms of standing orders governing parliamentary committees, the government is expected to table a comprehensive response to the report.

But with the Trudeau Liberals slated to unveil their first budget in two years next week — a budget expected to reinforce existing policies related to climate change and reducing greenhouse gas emissions overall — the timing of the report’s release will only further amp up speculation about what the government might announce.