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While the Canadian government originally planned to ban the sale of all new gas-powered cars by 2035, the policy landscape shifted dramatically in early 2026. On February 5, 2026, the federal government officially repealed the 100% EV sales mandate. Instead of rigid quotas, Canada has moved to a voluntary target model, aiming for 75% EV adoption by 2035 through a new $2.3-billion consumer rebate program and stricter emissions standards for gas-burning vehicles.

The Old Plan vs. The 2026 Reality

For the last few years, the headline was clear: gasoline-powered vehicles were on a mandatory path to extinction. The original Electric Vehicle Availability Standard (EVAS) required that 20% of new sales be zero-emission by 2026, scaling up to a total ban on the sale of new gas and diesel engines by 2035.

However, citing infrastructure gaps and shifting global trade realities, the federal government flipped the script in February 2026. The hard quotas that pressured auto manufacturers and dealerships to make and sell EVs have been scrapped in favor of a strategy that rewards outcome over obligation.

What Has Changed?

• The 100% Mandate is Gone: There is no longer a legal requirement for all new cars to be electric by 2035. The government now “expects” 75% adoption by 2035, leaving room for high-efficiency hybrids and internal combustion engines to remain in dealership inventories for the foreseeable future.
• Rebates are Back: To encourage adoption without force, a new Electric Vehicle Affordability Program (EVAP) was launched on February 16, 2026. This provides up to $5,000 for battery EVs and $2,500 for plug-in hybrids.
• A “Technology-Neutral” Approach: In a win for consumer choice, the new strategy allows manufacturers to use a wider array of technologies to meet stricter greenhouse gas emission limits, rather than being forced to sell battery-only units.

What This Means for Ontario Drivers

This reversal gives Ontario drivers more time to transition to an electric vehicle and more financial help to do so. Whether you are ready to “go green” today or plan to drive your gasoline vehicle until 2050, the 2026 policy shift ensures that your next vehicle purchase is based on your specific needs and budget rather than a federal deadline.

In this blog, we’ll dive deeper into the new 2026 rebate criteria, how these changes affect your auto insurance rates, and where the $1.5 billion in new charging infrastructure is actually being spent.

Canada Moving to Mandate Electric Vehicle Sales

As we reported in a previous blog, Environment Minister Steven Guilbeault announced in December 2022 that 20% of all passenger vehicles, trucks, and SUVs sold in Canada must be electric by the year 2026.

In September 2025 the federal government announced a pause on the 2026 sales requirement citing financial challenges within the auto industry. In February 2026, Prime Minister Mark Carney said that the goal is now for Canada “to achieve a goal of 75% EV sales by 2035 and 90% EV sales by 2040.”

How the New 2026 Strategy Actually Works

Since the federal government repealed the mandatory sales quotas, you might wonder how Canada plans to reach its new goal of 75% EV sales by 2035. The shift is moving from a “stick” (fines for not selling enough EVs) to a “carrot and limit” approach.

1. Fleet-Wide Emission Standards

Instead of counting every electric car sold, the government is introducing stricter Greenhouse Gas (GHG) Emission Standards for model years 2027 through 2032.

• The Goal: Manufacturers must ensure that the average emissions of all vehicles they sell in Canada drop significantly every year.

• The Flexibility: If a manufacturer wants to keep selling gas-powered trucks or performance cars, they can—provided they sell enough high-efficiency hybrids or EVs to keep their “fleet average” under the legal limit.

2. Reinstated Incentives (EVAP)

The most immediate change for Canadians is the Electric Vehicle Affordability Program (EVAP), which launched on February 16, 2026. After federal rebates were paused in 2025, EV sales plummeted; this new $2.3-billion fund is designed to jumpstart demand.

• Battery EVs (BEV): Are eligible for a $5,000 rebate.

• Plug-in Hybrids (PHEV): Are eligible for a $2,500 rebate.

• The “Made in Canada” Bonus: While most imported EVs must be priced under $50,000 MSRP to qualify, the government has waived this price cap for Canadian-made electric vehicles to support local auto workers.

3. The $1.5 Billion Infrastructure Push

One of the biggest reasons for the 2026 policy reversal was “charger anxiety.” To address this, the government is investing $1.5 billion through the Canada Infrastructure Bank. The goal is to move beyond the current 26,000 stations and build a national network capable of supporting the 440,000+ chargers Canada will need by 2035.

Will Gas Cars Really Disappear?

Under the original 2035 mandate, the answer was essentially “yes” for new sales. After the 2026 pivot, the answer is “not necessarily.” Because the government is now focused on emissions rather than technology type, high-efficiency engines and hybrids can remain on sale as long as they meet the increasingly strict carbon caps. While EVs are expected to make up 75% of the market by 2035, the remaining 25% provides a permanent home for internal combustion engines, particularly for heavy-duty work trucks and enthusiast vehicles.