NEWS - Our Comments Regarding the Consultation on Vehicle Emission Standards in Canada

Published on September 27, 2018


In connection with the consultation on the midterm evaluation of greenhouse gas emissions regulations for 2022 to 2025 model year passenger automobiles and light-duty trucks in Canada, Æquo, Shareholder Engagement Services (Æquo) believes that the government should maintain the regulations and objectives it set in 2014.

Through its mission, Æquo has sought to create value for company shareholders and society at large, by encouraging industry best practices, particularly related to the environment. Æquo would therefore like to take advantage of this public consultation opportunity since, in its opinion, such a regulatory change would be a significant step backwards in Canada’s global climate policy, thereby hindering Canadian companies’ ability to compete in the medium and long terms.



The transportation sector is currently responsible for nearly 25% of all GHG emissions in Canada. Now the second largest emitter, it was responsible for almost half of Canada’s GHG emissions increases between 1990 and 2015.

Canada has put in place U.S.-aligned regulations aimed at reducing GHG emissions in 2025 model year vehicles by 50% compared with vehicles marketed in 2008.

In view of the recent decision from the American Environmental Protection Agency (EPA) to modify its legislation by blocking emission performance improvement in 2021 (instead of 2025), we believe that Canada must end its harmonization by default with American regulations. This is especially relevant given the lack of harmonization of these regulations within the United States itself.



As such, we are calling on the Canadian government at the very least to maintain its regulations, while continuing to implement a strategy and incentive measures for manufacturers and consumers, aimed at accelerating the deployment of zero-emission vehicles, including electric vehicles.

The decision to maintain the present regulation would demonstrate a long-term strategy, with Canada being on the side of the worldwide trend to promote energy transition, fight against climate change, and achieve the objectives it has set in this area (The ICCT believes that 11 Mt of additional CO₂ would be emitted by 2030 if Canada aligns with the EPA). This decision would also facilitate technological innovation and competitiveness on the part of the Canadian automobile-manufacturing sector — a major player on the world stage, boasting a number of companies in Canadian investor portfolios.

Canada should join the various American states, including California, which oppose the EPA revision, so as to establish a regulatory space that would represent more than 40% of all vehicles sold in North America.



Æquo, Shareholder Engagement Services provides shareholder engagement services to

institutional investors seeking to integrate environmental, social and governance (ESG) considerations into their investment strategies. Æquo’s mission is to create value for shareholders by leading constructive dialogues with companies on ESG risks and opportunities. In total, Æquo’s clients represent more than CAD$110 billion.

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