Working Paper

Automobile production in Canada and implications for Canada’s 2025 passenger vehicle greenhouse gas standards

The U.S. Environmental Protection Agency has recently announced that its passenger vehicle greenhouse gas (GHG) standards for 2025 will be weakened. With Canada’s regulation tied directly to the EPA rule, the imminent roll back of U.S. standards immediately puts a critical decision to the Canadian government: continue the policy of aligning with the U.S. and thus weaken its own 2025 regulation; or, break regulatory ties with the U.S. by maintaining the stringency of the current 2025 standards.

This paper analyzes the Canadian vehicle manufacturing market and sales patterns to illuminate the possible impacts if Canada weakens its greenhouse gas emission standards in order to align with the U.S. federal government or maintains its existing standards and aligns with California and, most likely, 13 other U.S. states and the District of Columbia.