Canada and Ontario plan to provide an additional C$2.5bn (US$1.78bn) over two years for automotive capital projects, as part of a C$8.7bn scheme assisting sectors hit by US tariffs.
The automotive allocation comprises C$1.5bn from the federal administration and C$1bn from Ontario, a province in Central Canada.
These resources aim to assist producers in upgrading equipment and assembly lines to manufacture electric and connected vehicles.
Both governments will also establish a Canada-Ontario Automotive Task Force to coordinate interventions and guide industrial transition.
Light-duty vehicle greenhouse gas emissions standards will remain frozen at 2026 levels through the 2029 model year, with annual increases resuming in model year 2030.
This trajectory aligns with the national 2035 electric vehicle goal outlined in the Auto Strategy unveiled in February 2026.
The strategy intends to reshape domestic vehicle manufacturing, protect workers, and position the country as a leading electric vehicle producer.
Financing includes C$3bn via the Strategic Response Fund and up to C$100m from the Regional Tariff Response Initiative to support adaptation and market diversification, alongside ongoing counter-tariffs on US automotive imports.
Employing over 120,000 people directly, the automotive sector delivers more than C$16bn annually to national gross domestic product, according to the government.
The wider C$8.7bn Canada-Ontario programme includes a C$5.22bn five-year Joint Steel Action Fund, comprising C$3.55bn from the federal government and C$1.67bn from Ontario, as well as measures to strengthen procurement and trade protections.
It also provides up to C$2bn for road infrastructure serving Northern Ontario’s Ring of Fire critical minerals region and coordinated permitting for related projects.
Canada Prime Minister Mark Carney said: “From mine to mill to assembly line, Canada and Ontario are protecting jobs today and making bold investments that will build a stronger, more resilient, more independent Canadian economy for tomorrow. Today’s action plan is cooperative federalism in action. Canada is strong. Canada is united. Canada is working.”
