Three ways Ottawa can score big with a power play on electric vehicle policy
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Oct 27, 2020
Ben Sharpe

EV policies that leverage GHG standards, support commercial vehicle stakeholders and that are directly linked to creating jobs, are among strategies proposed by clean transportation research expert Ben Sharpe

EV policies that leverage GHG standards, support commercial vehicle stakeholders and that are directly linked to creating jobs, are among strategies proposed by clean transportation research expert Ben Sharpe

With Ford and Fiat Chrysler Automobiles announcing plans in the past month to produce EVs in Ontario, Canada’s auto sector is getting some much-needed good news. While the federal government may rightly feel excited about these developments, policymakers should keep their victory lap short and look to build on this momentum to create a major power play on EV policy. Here are three strategies that government officials in Ottawa can use to build on the Ford and FCA breakthroughs and increase Canada’s chances to play more of a leading role in the global shift to EVs.

Creativity: use vehicle GHG standards to drive EV adoption

While the federal government deserves credit for the bevy of EV incentives it started rolling out last year for consumers and businesses, we believe that binding requirements for manufacturers are essential if Canada is to achieve its goal of 30 per cent EV sales by 2030 and 100 per cent by 2040. With Quebec and British Columbia already having zero-emission vehicle (ZEV) regulations, or mandates, in place, there has been considerable interest in adopting a similar approach at the federal level. We are certainly supportive of a national ZEV regulation. Real-world data show that explicit sales requirements are the most effective way to ensure that manufacturers increase the supply of EV models in the market and there is sufficient diversity to meet a wide range of consumer preferences.

However, a national ZEV regulation is not the only way to ensure the total transition to electric drive by 2040. Another viable option is to leverage Environment and Climate Change Canada’s (ECCC) greenhouse gas performance standards for new vehicles.

At present, ECCC is grappling with the decision to remain aligned with the recently weakened U.S. federal regulation or develop an independent path forward that reverts back to the more stringent requirements for 2025 that were in place prior to the U.S. rollback. Not only does this crossroads present an opportunity for Canada to take control of its own destiny, but the country can look beyond 2025 and develop GHG requirements for 2030 that are premised on having 30 per cent EV sales. In this way, GHG standards for new vehicles would become a de facto ZEV regulation. The key advantages of using the GHG regulation as a pseudo ZEV regulation is that the regulatory authority and administrative framework is already well-established, and lawmakers would not need to spend the significant political capital and resources that would be needed to develop an entirely new regulation from scratch.

Canada is well-positioned to stake its claim as a leader in both manufacturing, as well as sales of combustion-free trucks and buses

Another important co-benefit is that a GHG regulation with rigorous long-term targets would continue to drive efficiency improvements for conventional gasoline vehicles, which are expected to make up the majority of sales for at least the next decade.           

Anticipation: embrace the approaching wave of truck and bus electrification

As we detail in an upcoming collaborative study with the Environmental Defense Fund and Propulsion Québec, the commercial vehicle market in North America is primed for a zero-emission future. Every major truck and bus manufacturer in the U.S. and Canada is developing at least one all-electric vehicle model or is part of an industry collaboration to bring zero-emission vehicles to market. In addition, there has been a surge of startups that have entered the market over the past five years and that are quickly bringing a growing number of zero-emission models to commercial truck and bus customers.

Despite this recent activity, the transition to combustion-free trucks and buses is still in its infancy, with all-electric models making up roughly 0.1 per cent of total sales in the U.S. and Canada in 2019. With this nascent market, Canada is well-positioned to stake its claim as a leader in both manufacturing as well as sales. This will require decisive and targeted demand- and supply-side policies that support a broad set of commercial vehicle stakeholders, including manufacturers, suppliers, fleets, drivers, technicians, utilities, fuel providers and the labour community. With a comprehensive policy framework of incentive and regulatory programs, Canada can boost its emerging set of home-grown zero-emission commercial vehicle manufacturers and also take advantage of its early position as a world leader in hydrogen and fuel cell technology.     

Teamwork: develop EV policies that create jobs and economic opportunities nationwide

Finally, Canada’s power play has to be a total team effort. Building nationwide cohesion on vehicle electrification requires establishing as many domestic jobs as possible. Implementing EV policies that are directly linked to creating high-quality jobs for Canadians makes the effort much less likely to be politicized or framed as an environment-only issue. And, electric vehicle jobs are not just for Ontario. There are opportunities for every Canadian province and territory to build charging stations, hydrogen pipelines and infrastructure, EV maintenance industries and transportation service jobs. In addition, the economic benefits of Canada’s vast mineral wealth can be kept at home by developing battery supply chains that can feed directly into domestically produced EVs.    

We’re only in the first period in this global transition to electric drive in the transportation sector. The combination of bold long-term vision and policy commitments from the federal government will send a potent signal that Canada is making a power play to transform itself from a minor role player into an electric vehicle world leader.

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Ben Sharpe, Ph.D., is a senior researcher with the International Council on Clean Transportation and leads the organization’s Canada Program.

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