The government of Canada has released Draft Zero Emission Vehicle Regulations (“Draft ZEV Regs”). If these draft regulations are made into law, they will create sales quotas for ZEVs. Each year a certain, and increasing, percentage of all the cars, SUVs, and pick-up trucks (collectively called “light duty vehicles”) that each automaker in Canada sells would have to be ZEVs.
(This post is sourced from the ZEV Consultation Toolkit prepared by Climate Messengers.)
Zero Emission Vehicles – ZEVs
Over time, the proposed Regulations would result in ZEVs replacing internal combustion engine (“ICE”) vehicles. The Draft ZEV Regs call for 100% of light duty vehicle sales to be ZEVS in 2035.
Quebec, British Columbia, and California already have similar ZEV regulations in force. Far more ZEVs are sold in those jurisdictions than in jurisdictions without such regulations.
When the Draft ZEV Regs were released, the government also commenced a public consultation process by which regular citizens, just like you, can tell the government what you think of the Draft ZEV Regs.
The Draft ZEV Regs need to be improved before they become law. Right now, the sales quotas are too lenient and they increase too slowly. The Draft ZEV Regs are also too lenient in the breaks they offer to automakers who don’t achieve their quotas.
The deadline for members of the public and grassroots ENGOs to make submissions is 16 March 2023.
It is very important that you, and many other people like you, take a bit of time to learn about the Draft ZEV Regs and provide your comments on them, because most of the automakers have opposed, and continue to oppose, the Draft ZEV Regs. They would like to see ZEV sales quotas eliminated entirely. If they cannot achieve that, they want to delay them and water down their effectiveness.
Too often, climate activists hear that a policy has been introduced, assume they have achieved a victory, and move on without looking at the details. However, the industry and their lobbyists (in this case the automakers and their various associations) stick around until the bitter end, and often succeed in making the policies more lenient and therefore less effective, as well as slowing down their final implementation.
Simply submitting a comment telling the government that you approve of passing the Draft ZEV Regs into law as soon as possible is useful to help counter the excessive influence of the automakers. Of course, the more time and attention you want to put into your submissions, the better.
This Toolkit will provide some additional information on the Draft ZEV Regs. It will also suggest some of the features that you may want to tell the government to improve and also some features that you may want to tell the government you approve of.
Two Good Features to Praise
It is important that, in your submissions, you express your approval of these facts and features, because the automakers and their lobbyists are campaigning against them.
- The very fact that the federal government is creating ZEV Regs is good and important. We need to stop consuming oil. This is an excellent and relatively easy way to do that. While Quebec and British Columbia have ZEV regs and the rest of Canada does not, there is a vast difference in the availability of ZEVs in Canada. It is reasonably easy to buy a ZEV in Quebec and B.C., and very often extremely difficult to buy one anywhere else in Canada.
- The $20,000, indexed to inflation, penalty on every ZEV for which an automaker falls below the sales quota is a great feature. (In the Draft ZEV Regs and in the Regulatory Impact Analysis Statement (“RIAS”), it is not called a penalty. It is called a “compliance credit”.) Automakers make more profits selling ICE vehicles than they do selling ZEVs. If the extra profit an automaker can make on the ICE vehicle is greater than the penalty, the automaker will not comply with the sales quota and treat the (lower) penalty as simply the cost of doing business.
Two Bad Features to Improve Before they Issue the Final Regs
- The annual sales quotas are too lenient. The sales quotas in the Draft ZEV Regs do not catch up to those of California until 2032. They lag behind those of Quebec and British Columbia until 2035, when they all are 100%. More stringent quotas earlier are important. Environment Canada itself assumes that light duty vehicles stay on the road for an average of 15 years, and we need all light duty vehicles to be ZEVs as soon as possible. The annual sales quotas in the final ZEV Regs should be as stringent as Quebec and British Columbia.
- The compliance flexibility mechanism in the Draft Regs that permits automakers to miss their sales quotas for three years and apply credits they generate in later years to retroactively fix their shortfalls in earlier years is too lenient. The gap between the higher profits that automakers make on ICE vehicles and the lower profits that automakers make on ZEVs is relatively wide now, but it is expected to significantly narrow in the future. This gives the automakers an incentive to miss their quotas earlier while the profit gap is wider and fix their problem later when the profit gap is narrower. That makes the ZEV Regs less effective, which means more GHGs are emitted. The Quebec legislation does not have this three-year retroactive loophole. It should be removed from the Draft ZEV Regs before the final Regs are released.
The only sector of Canada’s economy that creates more GHG emissions than Transportation is Oil and Gas Production. By eliminating the need for gasoline (derived from oil), we are helping to reduce Oil and Gas Production.
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