Canada’s Conservatives Push Back on Carney Auto Strategy With US-Focused Plan

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(Bloomberg) — The leader of the Conservative Party of Canada proposed new measures for protecting the country’s automotive industry, arguing that it’s a mistake to shift focus away from the US as the industry’s primary export market. 

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Pierre Poilievre proposed exempting Canadian-made vehicles from federal sales tax and implementing a “dollar-for-dollar” rule on tariffs. An automaker that assembles vehicles in Canada would be allowed to import the equivalent dollar value in cars or trucks from the US or Mexico without paying duties, under the Conservative plan. 

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The proposals are an attempt to differentiate his party from Prime Minister Mark Carney’s automotive strategy. The government has launched consultations on a system that would give companies “import credits” when they make cars in Canada, which could be used to wipe out Canadian tariffs on US-made vehicles or sold to other companies. 

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That concept appears similar in principle to the one Poilievre is now proposing, but the government has given few details on how it would work. Industry players can submit comments to the consultations until April 13.  

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Carney’s strategy also includes trying to attract investments from Chinese electric-vehicle makers and exporting that production, potentially to non-US markets. In January, the prime minister also agreed to allow imports of 49,000 China-made EVs at a low tariff rate — drawing condemnation from the White House, which continues to block Chinese electric vehicles with a high tariff wall. 

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Poilievre said it’s a “dangerous illusion that we can replace auto sales to the US with EVs overseas.”

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Canadian auto production has declined by almost 50% since 2016 to 1.2 million vehicles last year, according to the Trillium Network for Advanced Manufacturing. Most are shipped for sale in the US, but carmakers are piling up huge tariff costs after President Donald Trump put new import duties on foreign vehicles nearly a year ago. Canada responded with matching counter-tariffs on US-manufactured cars and trucks. 

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The president and members of his administration have said on a number of occasions they don’t want the US to import vehicles made in Canada. 

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The traditional Detroit automakers — General Motors Co., Chrysler parent Stellantis NV and Ford Motor Co. — have plants in Ontario and once dominated the Canadian industry. But two Japanese giants, Honda Motor Co. and Toyota Motor Corp., are now the firms that matter most, accounting for about three-quarters of Canadian-made cars and light trucks in 2025. 

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The Conservatives said that, even as Canadian production kept falling, more than 40% of cars sold in Canada last year were US-made. “Without tariff relief it will only get worse,” the Conservatives said.

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The opposition party laid out other proposals, such as the end of subsidies on electric and plug-in hybrid vehicles. It also advocated for the creation of a harmonized North American cybersecurity and data standard, and a ban on vehicles using Chinese- and Russian-connected software.

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The plan would help “secure tariff-free access to the US market, save and expand Canada’s auto industry,” it said.

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Carmakers currently face a 25% tariff on the value of non‑US content in vehicles shipped into the US under the US-Mexico-Canada Agreement — meaning an Ontario-made sport-utility vehicle with 60% US components would face a 10% tariff.

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The auto industry directly employed more than 125,000 people in Canada in 2024, according to the government.

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