Canada could face 11,000 extra premature deaths and incur more than $90 billion in additional health costs if the Carney government bows to pressure from automakers and cancels the country’s Electric Vehicle Availability Standard, The Atmospheric Fund (TAF) warned in a July 10 release.

Yet the only company that stands to benefit from the standard as it’s currently framed is Elon Musk’s Tesla Canada, Politico reports—at least until other automakers’ EV sales bounce back from a recent deep dip, brought on when the previous federal government cancelled its $5,000 EV rebate.

The standard, introduced in 2023, requires 20% of all passenger cars, SUVs, and light trucks sold in Canada in 2026 to run on electricity. The percentage rises to 60% in 2030 and 100% in 2035.

Contrary to some of the persistent misinformation that has been circulating, the standard applies only to new sales. It does not take existing internal combustion vehicles of the road.

But Politico points to a crucial feature of the standard, requiring automakers that miss the 20% threshold to buy credits from competitors that exceed it. In Canada, the only company that fits that description is Tesla.

“This regulation will directly benefit Tesla and Elon Musk. That makes no sense,” Brian Kingston, president of the Canadian Vehicle Manufacturers Association, told the news outlet’s Mike Blanchfield.

He estimated the value of regulatory credits flowing to Tesla in the first three months of the year at $400 million, though Politico didn’t indicate the currency or whether the figure was for Canada or North America.

Either way, the provision means “added cost to your business because you have to pay a competitor money to comply with a regulation,” said Sarah Goldfeder, executive director, government relations and corporate affairs at GM Canada.

But TAF cites a 2023 study that showed the massive health savings the EV mandate would deliver. That analysis “indicated that the EV Availability Standard would result in over $90 billion in health benefits for Canadians over the next 25 years, including up to 11,000 avoided premature deaths,” the Toronto-based centre writes.

“Beyond lifetime ownership cost savings and climate benefits, TAF’s analysis of the government’s proposed electric vehicle sales regulation shows staggering value from a health perspective,” CEO Julia Langer said at the time. “We hope this excellent opportunity provides a compelling case for implementing these targets on schedule.”

Since then, a 2024 study by the University of Toronto has reached a similar conclusion, finding that vehicle-related pollution caused 19,800 deaths in the United States in 2017 alone. “Criteria air contaminants from gas-powered vehicles are associated with adverse health effects such as premature mortality, increased hospitalizations, cardiovascular disease, lung cancer, and other chronic respiratory diseases,” TAF writes.

The TAF release adds that the EV Availability Standard includes “multiple measures that provide flexibility and reduce pressure in this difficult market. For example, automakers can bank credits for EVs or PHEVs [plug-in hybrid EVs] sold prior to the policy taking effect, and they have a three-year grace period to catch up if they fall behind “on targets, with no penalties.

But “the auto sector is saying, ‘If we’re going to stay in Canada, you must get rid of this EV mandate,’” a federal official told Blanchfield.

Politico has more on the underlying politics and the impact of Canada’s trade negotiations with the Donald Trump administration in the United States.

Last week, Kingston, whose lobby group represents Ford Canada, GM Canada, and Stellantis, said he was “cautiously optimistic” the government would take action on the mandate, after the companies’ CEOs repeated their calls for the sales mandate to be repealed. But Clean Energy Canada said the solution is to put more EVs on the road by retooling the mandate, with the government giving automakers near-term flexibility to “weather this temporary storm” of slumping EV sales, while setting out to deliver affordable vehicles with price tags below $40,000.

“Any additional flexibility added in the regulation should be designed to achieve other EV-related goals, such as delivering more affordable EVs and building out Canada’s charging network,” said Executive Director Rachel Doran and Director of Public Affairs Joanna Kyriazis.

Electric vehicle sales in Canada fell 50% in the last three months of 2024 and the first three months of 2025, after the federal government cancelled a popular rebate program it had introduced in 2019. Last month, Environment and Climate Minister Julie Dabrusin said the rebates will still be restored, though the details are still in development.

“Will it be named, iZEV? That I can’t tell you. But there will be a consumer rebate,” Dabrusin said.

That commitment has led to reports that would-be EV buyers are holding off until the federal funding is actually restored. TAF says the downturn is temporary, and the existing sales mandate is flexible enough to accommodate it.

“While EV demand showed a significant decline in the first quarter of this year, the change can largely be attributed to the sudden removal of incentives nationally and in Quebec, which typically accounts for over half of national EV purchases,” the release states. “EV sales increased in most provinces, including Ontario. Overall, the long-term and global trend is toward a rapid increase in EV sales.”