OTTAWA—Canada has cast its lot with California on vehicle emissions regulations, setting the stage for a split with the U.S. federal government if the Trump administration follows through on a proposal to weaken rules that dictate the fuel economy of vehicles sold in North America over the coming years.
In a joint conference call with California Gov. Gavin Newsom, Environment Minister Catherine McKenna announced a new agreement to collaborate with the state on regulations to slash greenhouse gas emissions from vehicles in the two jurisdictions.
The deal comes as the United States federal government considers whether to weaken national vehicle emissions standards that have been in harmony with Canadian regulations since 2011. The prospect has alarmed environmentalists who consider the standards a key climate achievement of Barack Obama’s presidency, and has raised concerns of a regulatory rift in an auto industry that has been integrated across the Canada-U.S. border since the 1960s.
“It looks like there will be two standards in effect in the U.S. That’s certainly not anybody’s first choice. Competitiveness is incredibly important, and I think having an integrated market with one standard would be preferable,” McKenna said Wednesday.
“But, you know, look — if there are two choices in the U.S., our focus is really how about how do we get meaningful cuts to climate pollution.”
The federal governments in Canada and the U.S. have worked together on vehicle emissions rules for more than a decade. Since 2011, regulations for emissions from new automobiles and light trucks have been aligned, creating a uniform standard for those vehicles across the Canada-U.S. auto industry.
Those standards were set to increase each year until 2025, so that new models would have to keep getting more fuel efficient. McKenna said Wednesday that, according to the current standards, a new light duty vehicle in 2025 will need to burn 50 per cent less fuel than a 2008 model.
But that plan was imperilled after Donald Trump was elected president. In 2018, the U.S. Environmental Protection Agency signalled the administration’s intention to scale back the regulations. The agency kick-started a regulatory review, and issued a draft proposal to freeze the fuel economy standard at 2020 levels, instead of continuing to make it stricter every year to 2025, Reuters reported at the time
The New York Times reported in April that Washington is preparing to increase standards by 1 per cent each year from 2021 to 2026, instead of by 5 per cent annually as originally planned. But no final decision has been made.
McKenna said Wednesday’s agreement with California is meant to ensure emissions standards continue to get more stringent every year, but she and Newsom did not rule out the possibility that the U.S. federal changes could match their ambitions and still allow for a regulatory harmony across the two countries. They said 13 other U.S. states have signalled they intend to stick with California on stricter standards, even if the Trump administration pulls back on the federal regulations.
“Those states make up 40 per cent of the U.S. auto market,” McKenna said.
“We’re not a small, isolated state. California moves markets,” Newsom added. “This only reinforces our efforts and reinforces our commitment and resolve.”
Dan Woynillowicz, policy director with the think tank Clean Energy Canada, said Ottawa is not in a position to dictate emissions standards on its own. But combined with California and the other states, these jurisdictions represent about half the North American market. That could encourage most automakers to decide it makes more sense adhere to the stricter standards, rather than craft different lines of production for two sets of rules, he said.
“The auto sector is now going to be trying to navigate what the future standards are going to be,” Woynillowicz said. “But I think the government took an important step today towards signalling to Canadians as well as to automakers the direction it would like to see this go.”
Huw Williams, spokesperson for the Canadian Automotive Dealers Association that represents 3,200 car dealers across the country, said Wednesday’s deal is “premature” because Washington still hasn’t made a final decision about changing the U.S. national standards. He said a regulatory split would run counter to the spirit of the new North American trade deal, which sought to create harmony across the border.
“Any move where you start to force the automakers and dealers to have a segmented market makes it much more difficult,” he said, suggesting that dealers may decide not to sell certain models in some markets to align with regulations.
“Having a whole North American approach is really the only way to go,” he said.
The transport sector is one of the largest sources of greenhouse gas emissions in Canada, with emissions from road transportation rising from 130 megatonnes in 2005 to 144 megatonnes in 2017 — hitting 20 per cent of the country’s total emissions that year — according to the most recent tally submitted to the United Nations. Emissions from transportation account for 40 per cent of the total in California.
Alex Ballingall is an Ottawa-based reporter covering national politics. Follow him on Twitter: @aballinga