Carney meets with car industry CEOs as U.S. trade talks continue

Prime Minister Mark Carney met with automotive sector CEOs Wednesday morning to discuss U.S. tariffs and ways to protect Canadian supply chains from the trade war with the United States.

A spokesperson for the Prime Minister's Office (PMO) said the CEOs of Ford Canada, Stellantis Canada and GM Canada met with Carney, along with Brian Kingston of the Canadian Vehicle Manufacturers' Association.

A brief readout from the PMO said the group discussed "the need to build up a made-in-Canada supply chain as well as diversify our trading partners."

U.S. President Donald Trump has said repeatedly that the U.S. does not need Canadian cars and he wants to see automotive companies move all production to the U.S.

The U.S. has imposed 25 per cent tariffs on vehicles manufactured in Canada, with a carve-out for components built in the U.S. through the highly integrated vehicle supply chain.

"I think it's good and useful for the prime minister to be meeting with the Detroit-based automakers. I think we're also hopeful that we're going to have an opportunity to meet with the prime minister as well," said David Adams, president and CEO of the Global Automakers of Canada, which represents 26 European and Asian auto brands including Toyota and Honda.

Adams said one key issue for automakers is the government's zero-emission vehicle mandate, which is set to kick in next year and was the target of recent Conservative attacks in the House of Commons.

Canada's auto manufacturers have called on the government to repeal the mandate.

Kingston told CBC News that he intended to raise the issue with the prime minister.

"The EV mandate itself is not sustainable. The targets that have been established cannot be met," Kingston said on his way into the meeting.

Conservative MP and industry critic Raquel Dancho echoed the industry's call for a repeal of the mandate.

"I think it's very irresponsible and unfortunately quite in line with the lack of serious action that is needed at this time, more than ever, from the Liberals," Dancho told CBC News.

"It is my hope and expectation that they will see the light."

Electric vehicles remain more expensive than their gas-powered equivalents, and sales fell in the winter after the $5,000 federal vehicle rebates ran out of funding.

Between January and March, zero-emission vehicles made up only 8.11 per cent of all new vehicle sales in Canada — a drop from the 16.5 per cent recorded in the fourth quarter of 2024 — Statistics Canada data shows.

The monthly share of new vehicle sales going to EVs never dropped below 10.65 per cent in 2024 and peaked at 18.29 per cent in December.

In April — the most recent Statistics Canada data available — EV sales dropped to 7.53 per cent of all new vehicle sales in Canada.

Environment Minister Julie Dabrusin confirmed last month the government was working to bring back an EV rebate of some kind, but wasn't sure yet if it would restore the old program or be something new.

The government's EV sales mandate states that at least 20 per cent of new light-duty vehicles offered for sale in 2026 must be zero-emission. That share is supposed to rise each year until it reaches 100 per cent in 2035.

"There's no way that manufacturers are going to be able to meet their targets for 2026," Adams said.

He said the targets are "costly and problematic," and their removal would allow Canada's auto industry to better focus on the trade relationship with the U.S.

Adams thinks Carney could be sympathetic to that argument.

"My sense of the prime minister is that he's a pretty pragmatic person," he said.

Canada and the U.S. are back at the bargaining table after Trump called a halt to trade talks over Canada's plan to impose a digital services tax on major tech firms — a plan the Carney government called off Sunday evening.

Carney has said he wants a new Canada-U.S. trade deal in place by July 21 and if that deadline isn't met, he'll boost Canadian trade countermeasures.