Texture Analysis: Canada’s New Auto Strategy
On Thursday, Prime Minister Mark Carney launched a new automotive strategy, aimed at making Canada’s auto sector a global leader in EV production and its associated supply chains.
The two biggest moves for consumers are scrapping the electric vehicle sales mandate and restarting an electric vehicle rebate program. In other words, Carney is choosing an all-carrot, no-stick approach. It also includes a renewed emphasis on incentives and investments for automakers.
However, this much remains the same: the federal government is signalling that EVs are the future of the automotive industry in this country. The new strategy signals that Ottawa wants vehicles assembled in Canada, batteries and components sourced from trusted suppliers, and critical inputs increasingly produced and processed domestically or within allied supply chains.
At the same time, the Conservatives are warning that this move will “have almost zero benefit for Canadian auto workers and manufacturers”, as Raquel Dancho, Shadow Minister for Industry, and Kyle Seeback, Shadow Minister for Labour, said in a statement that followed the government’s announcement.
Industry insiders say the details — like consultation, timing, and ultimate implementation of the initiatives — will be critical to its success.
The brief
At a time of heightened trade tension and shifting EV policies across major markets, Ottawa’s approach moves from compliance-focused regulation to a strategy built on competitiveness, diversified trade and supply-chain resilience.
The big news is that the government is foregoing the EV sales mandate that had previously led their strategy and instead embracing stricter emissions standards, robust consumer incentives and targeted investments to encourage domestic production and electrification. It sets a path toward 75 per cent EV sales by 2035 and 90 per cent by 2040, while allowing manufacturers flexibility in how they meet these goals.
In short: the government is aiming to strike a balance between environmental ambition and economic realities. It’s also aiming to address the rift that the Prime Minister’s earlier trade deal with Beijing caused with Ontario Premier Doug Ford. Ford has been the loudest voice echoing the auto industry’s point that the EV mandate was fanciful policymaking.
The strategy rewards investment and production in Canada. Through the Strategic Response Fund, Productivity Super-Deduction, tariff measures, and enhanced trade framework (including a new EV arrangement with China and cooperation with Korea), Ottawa is pursuing diversification of export markets and deeper integration into global supply chains. With only one OEM currently making EVs in Canada, this policy is a pitch to anchor previous investments like the ones both the Ontario and federal governments have made in the St. Thomas Volkswagen facility, and the Honda Asahi Kasei facility in Port Colborne.
Industrial strategy is important, and so are the supply chains that underpin it. The government explicitly highlights investments in critical minerals: the key inputs for EV batteries and advanced manufacturing. Canada’s broader critical minerals agenda, built on funding mechanisms like the Critical Minerals Sovereign Fund and regionally coordinated strategies, aims to have these resources flow through domestic supply chains rather than relying on overseas sources.
This is especially important in light of the U.S. government’s recent Critical Minerals Ministerial. If you’re following Texture’s analysis of that meeting, you’ll know that the U.S. is proposing a “preferential trading zone” that has the potential to reshape global supply chains.
The emphasis on critical minerals is also music to the ears of Ontario Premier Doug Ford – who quickly endorsed the new strategy and took the opportunity to tout the province’s abundant resources as a linchpin to the success of his federal counterpart’s strategy. The province has also focused on critical minerals, including launching a $500-million Critical Minerals Processing Fund, and making announcements aimed at advancing construction in the mineral-rich Ring of Fire region of Ontario, to anchor extraction, refining and processing locally, reinforcing value creation within Canada.
What Ottawa is trying to solve
The government is responding to multiple pressures:
Changing global policy: the U.S. has softened elements of its EV push (while sharpening its approach to critical minerals), Europe is recalibrating timelines, and China continues to dominate battery and component supply chains. Canada needed a strategy that can endure this volatility without scaring off investment.
Investment certainty: auto manufacturers and suppliers have been clear that unpredictable mandates create risk. Ottawa appears to be prioritizing feasible projects, clear incentives, and policy that’s more realistic than moralistic.
Shoring up supply chains: an EV push without secure access to batteries, components, and critical minerals leaves Canada exposed. The strategy acknowledges that vehicle assembly alone is not enough, and seeks to create the right conditions for related industries to thrive.
What this means for your communications
The federal government has adopted a prescriptive approach to communications — one that’s focused on demonstrating action and progress, and consistently highlights big, bold policy to reshape the country’s economy at speed.
That’s clear here, too.
The communications approach for the new auto strategy signals a decisive move away from obligation, mandates, and moral pressure, and towards competitiveness, affordability, and economic prosperity.
This matters for industry communications. Companies that continue to frame their projects primarily around “meeting targets” or “supporting government mandates” risk sounding out of step with the government’s current narrative. The Carney government is positioning electrification as an economic opportunity Canada cannot afford to miss, not a regulatory box to be checked.
In practical terms, this means your communications need to emphasize:
Competitiveness and productivity gains.
Affordability for consumers and cost discipline for industry.
Supply-chain security or even sovereignty alongside domestic value creation.
Canada’s ability to win investment in a volatile global market.
Those in the auto sector and related supply chains must demonstrate how they’re ready to gear up and meet a generational challenge — and opportunity — to move Canada’s economy into the future.
What to do now
For companies operating in the auto supply chain, this should be treated as an important communications and government relations signal.
In the near term:
Map how your operations align with Canada’s new strategy and supply-chain goals.
Reframe your story in terms of competitiveness, resilience, sovereignty and national economic interest, not just regional economic development.
Engage early with federal and provincial decision-makers shaping implementation.
The team at Texture Communications has deep experience moving the needle in boardrooms, newsrooms, and around the Cabinet table. Our clients become industry-moving thought leaders through powerful communications, and they secure government funding and approvals through our lobbying efforts. Work with us to ensure your story is heard and your most important gains are earned.
