Canada Adopts CAFE 2025-Based Fuel Economy Standards

Canada’s government is seen as reluctant to tackle the issue of climate change. Concerned Canadians have even taken to discussing how putting a Canadian flag on one’s backpack may be dangerous because our lack of environmental leadership has diminished our standing in places like Europe. Or at least that’s what one eco-conscious party guest told me, in between agitating for more bike lanes and asking for a lift home.

Since motorists and drivers are low-hanging fruit without any kind of organized lobby, our Conservative government has decided to offer up the automobile as a sacrificial lamb in the PR temple by implementing CAFE-style standards on Canadian vehicles. As we all know, CAFE is a deeply flawed system that rewards the bad guys. So why would Canada, a land of small cars and high gas prices, do this?

The official answer, beyond all the environmental posturing, is for the sake of harmonizing Canadian and American regulations. Canada’s Environment Minister, Peter Kent, made this clear in a speech announcing the regulations on Wednesday

Given the integrated nature of the North American automotive industry, it makes sense for us to cooperate closely with the United States on regulations. Our approach is consistent with the overall goal of the Canada-U.S. Regulatory Cooperation Council, which aims to achieve greater alignment and reliance on each other’s regulatory system.

As the race for better fuel efficiency continues to drive increased global competition in the auto sector, Canada and the United States have worked together so that North America can have a common long-term approach. This is consistent with the overall goal of the Canada-U.S. Regulatory Cooperation Council, which aims to achieve greater alignment and reliance on each other’s regulatory system.

Now, this is understandable in light of our geographic proximity with the US, and Canada’s Motor Vehicle Standards, which are broadly in line with America’s FMVSS. But a background document reveals another interesting tidbit that won’t surprise anyone familiar with CAFE, even if it may hold a clue as to why Canada chose to adopt it, rather than more stringent standards.

As light trucks are typically used by farmers and construction workers, it is equally important that these vehicles can perform the work they are required to do. To that end, the proposed regulations provide short-term relief in the form of less-aggressive annual reductions. Consequently, light trucks will be required to achieve, on average, 3.5% annual GHG emission reductions from model year 2017 to 2021 and 5% reductions from 2022 to 2025. This will give time for companies to find technological solutions that lead to reduced emissions without affecting the utility of their trucks.

Despite loving small cars, Canadians love trucks even more. The Ford F-Series and RAM 1500 are Canada’s first and second best-selling vehicles respectively. A tailpipe emissions based standard like Euro VI would make these cars horribly unaffordable for the average Canadian, to the point where they would become toys for the rich.

Consumers would cry foul over having their choice in vehicle being regulated out their budget, thanks to punitive carbon taxes or the inability to comply with the standard, and the Detroit Three would cry foul, faced with the prospect of having a 33 million-strong market for their most profitable vehicles at risk of drying up. It’s true that many full-size pickups are used for work related purposes, but the vast majority aren’t. The rest of the world manages to do just fine with the global mid-size pickups offered by a variety of auto makers, so why not Canada? Would harsh emissions regulations that hurt full-size pickups be a good pretext for the D3 to leave the country? With the strong Canadian dollar and the tough negotiating tactics of the CAW, it might be the perfect excuse to pack up and move to Mexico.