2 - Managing the transition to net zero

Learn more about our recommendations for managing the transition to net zero, or click here to download the full report.

2.1 Supporting at-risk firms

Governments cannot ignore the disruptive effects this transition may have on workers. Adequate protections must be in place to help workers adjust to this changing industry, upgrade skills and secure high-quality auto jobs for years to come.

Recommendations:

  • The federal government must dedicate resources to undertake a comprehensive risk assessment of Canada’s auto parts industry. This work must be done in partnership with provincial governments and under the oversight of the proposed Ministry of Automotive Supply Chain Development, It is critical for government to understand the country’s supplier vulnerabilities, where these firms are located and develop strategies to support them. Proactively identifying at-risk suppliers and coordinating directly with them around future product plans, advising them of government supports and linking them with new customers as the EV industry grows, will enable governments to manage this transition in a constructive way. By working with unions, governments can also determine the most appropriate training and transitional supports workers need. It is also necessary to make transition supports conditional on firms maintaining both collective bargaining agreements and production in Canada.

2.2 Improving worker adjustment supports

Maximizing the benefit of the EV shift means looking beyond the sustained profit margins of employers. It means developing strategies and financial supports for workers who are most vulnerable to industrial transitions. It also means preserving workers’ fundamental rights to collective bargaining, decent working conditions and fair wages.

Recommendations:

  • The federal government must develop and coordinate, along with provinces, the delivery of a constellation of job transition supports for autoworkers affected by job displacement resulting from a shift to ZEV or other significant technological change. These supports would include tailored income maintenance, labour market readiness, skills upgrading, relocation assistance, early retirement bridging, and other supports necessary to successful labour market adjustment. Dedicated federal and provincial funding to create community-based, union-run unemployed worker help centres can support these efforts. These centres would serve as local job-skills transition hubs and recruitment platforms, built on a successful model of peer-to-peer learning and support. Building structural links between this broader adjustment program and the labour market skills assessment coordination is crucial.

2.3 Making electric vehicles more affordable

One of the biggest barriers to EV adoption in Canada is their relatively high purchase price relative to gas-powered cars. Making the shift to electrification means addressing the affordability gap, acknowledging the price barriers and introducing meaningful supports to overcome it.

Recommendations:

  • Doubling the iZEV rebate program to $10,000 is an immediate step the federal government can take. Provincial governments must also introduce similar and complementary consumer rebates where they are not currently in place. To ensure fair distribution of public funds, governments must also consider setting in place a dynamic income-tested rebate once market penetration for new light duty ZEV purchases crosses the 50 per cent threshold (i.e. eliminating subsidies to individuals with incomes above $200,000 and establishing a sliding scale subsidy for those below that amount).

  • Heavily affected by production downtime and supply-chain disruptions, annual Canadian and U.S. auto industry sales continue to lag pre-pandemic levels by 15 per cent38 and 12 per cent39 respectively. Developing vehicle trade-in or “scrappage” programs can simultaneously boost demand for newer, more fuel-efficient vehicles, such as EVs, and reduce overall carbon emissions by pulling higher-polluting older vehicles off the road. Such a program can apply to vehicles aged 12 years or older, the average lifespan of a vehicle, and work in conjunction with dollar-for-dollar matching incentives provided by automakers.

    38  See Automotive News Canada (January 5, 2022): https://canada.autonews.com/retail/2021-sales-nearly-7-remain-far-below-194m-sold-2019

    39 See Automotive News (January 8, 2022): https://www.autonews.com/sales/2021-us-auto-sales-most-unusual-year

2.4 Expanding electric vehicle charging stations in Canada

One of the biggest barriers to mass adoption of EVs are so-called “range anxiety” concerns and the lack of access to charging infrastructure. To address these barriers, Canada must undertake a major expansion of its electric vehicle-charging network, increase access to a variety of charging types, and meet the needs of diverse communities across the country.

Recommendations:

  • Establishing and communicating a national charging benchmark will provide direction for infrastructure planners as well as coordination efforts between various levels of government. A benchmark also sends a signal to prospective EV buyers to ease “range anxiety” expressed as one primary barrier to adoption. Regular monitoring is critical to ensure appropriate resource deployment and access points in various regions of the country, especially in remote communities.

    Meeting this ambitious benchmark will require further investments by all levels of government, partially funded by automakers themselves, in accordance with anticipated uptake in EV ownership. Investments include the retrofitting of public spaces, including libraries and community centres, multi-unit residential dwellings and in conjunction with the existing network of fuel stations in communities and along highway corridors.

    Increased charging capacity must include a mixture of level two and DC fast charging stations.

  • Convene a federal-provincial task force to assess existing capacity issues and opportunities for joint-investments in more GHG-free power generation, emphasizing the production of energy through renewable sources where possible.

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