Canadian Legislative News

Recently, Canada and California signed a Memorandum of Understanding (MOU) aimed toward reducing vehicle emissions. The agreement, in theory, intended to harmonize efforts and carry out cooperative activities to reduce greenhouse gas emissions from light vehicles. The MOU also includes emissions standards and cooperation to accelerate the adoption of zero-emission vehicles (ZEVs).

This MOU comes as U.S. President Trump considers rolling back emissions standards set by former President Barack Obama – which have been harmonized with Canadian regulations since 2011. These North American standards would have required vehicles to become more fuel-efficient every year between 2017 and 2025. After President Trump's election, the administration started a review of the emission standards and issued a proposal to freeze them at 2020 levels. When Trump said last year, he intended to roll back the targets, the government of Canada launched its own review of the emissions plan.

The Canadian Minister of Environment, Catherine McKenna, indicated that Canada will not move forward with its own vehicle emissions standards until the U.S makes the final decision on the current standards.

The ideal result would be to continue a unified national standard, as disharmonized strategies between Canada and the United States could distort the automobile market in North America, potentially limit availability, and perhaps increase vehicle prices in Canada. In turn, the North American automotive supply chain could be disrupted.

While it is still unclear if the Canadian government will adopt its own standard aligned with California, a single national emission standard aligned with the U.S remains, to most, the optimal way forward. The Canadian government is expected to work to ensure an agreement acceptable to both countries is reached, especially considering USMCA which would further integrate the economies of the two countries.