Feds outline measures aiming to boost auto manufacturing

Prime Minister Mark Carney tours an auto-parts plant moments before making an announcement in Woodbridge, Ont., February 5, 2026. THE CANADIAN PRESS/Eduardo Lima

VAUGHAN — The federal government has outlined a suite of measures it hopes to use to boost investment in Canadian auto manufacturing.

Along with dropping the electric vehicle sales mandate and restarting an electric vehicle rebate program, Prime Minister Mark Carney says the government is also increasing funding, reducing taxes and adjusting its tariff remission program.

Speaking in Vaughan, Ont., on Thursday, Carney said the government plans to dedicate up to $3 billion from the Strategic Response Fund to support investment in auto manufacturing and $100 million from the Regional Tariff Response Initiative.

It also plans to launch consultations on how to strengthen an existing program that rewards automakers who maintain their Canadian production footprint with tariff exemptions on imports from the United States.

Carney says he plans to expand the remission program into a tradable system that will give credits to those who invest in Canada, and require those that don’t to buy those credits to avoid tariffs.

He also touted tax measures announced in its last budget that he says will make the country’s lowest marginal effective tax rate 4.5 percentage points below the United States.

This report by The Canadian Press was first published Feb. 5, 2026.

The Canadian Press