Liberals to form minority government in Canada; what it could mean for auto

Editor's note: All dollar figures in Canadian currency.

Canadians have elected another minority Liberal government — almost identical to the one it replaced — to finish the fight against COVID-19 and rebuild the shattered economy.

Precisely how stable a minority remains to be seen, as results were still trickling in and there were tight contests in dozens of ridings as the clock ran out on Monday night.

There are also almost 800,000 mail-in ballots to be counted, starting Tuesday, which could yet change the preliminary results in many of those tightly contested seats.

Early Tuesday, Justin Trudeau's Liberals were leading or elected in 158 seats — just one more than they won in 2019 and a dozen short of the 170 needed for a majority in the House of Commons.

Erin O'Toole's Conservatives were leading or elected in 121 seats, the same as 2019 even though they won slightly more of the popular vote than the Liberals.

Jagmeet Singh's NDP were leading or elected in 26, a gain of two seats, while Yves-Francois Blanchet's Bloc Quebecois was down one to 31.

The Greens, which elected three MPs in 2019, were down to two.

The win marks the Liberals’ third government in six years.

What a Liberal government could mean for Canada’s auto sector:

Under previous mandates, the Liberals established a relatively consistent track record for automotive support and investment, particularly when it comes to electric vehicles. 

The government announced in June that it wants all new light-duty vehicles sold in Canada be zero-emissions by 2035, advancing the previous goal five years. However, the government didn’t legislate the goal, avoiding an all-out ban on the internal-combustion engine. The promise made on the campaign trail reiterated the 2035 target, as well as committed to working with industry to develop a regulated sales requirement that would make 50 per cent of light-duty vehicles zero-emissions by 2030.

The plan pushes up the timeline for creating an all-ZEV federal fleet as well. The Liberals now plan to electrify all federal vehicles by 2030, compared to 80 per cent of the federal fleet by 2030 previously.

For the average Canadian, the shift to ZEVs is supported by a consumer incentive program – launched in 2019 -- that covers up to $5,000 of eligible vehicles. The Liberal platform pledged an additional $1.5 billion to expand the iZev rebate, making a wider range of vehicles, including used vehicles, eligible.

The plan also sets a target for charging station installations. The party said it will invest an added $700 million to build 50,000 new EV chargers and hydrogen stations – though hydrogen vehicles are not otherwise mentioned in the platform. Another $100 million will be put toward charging station installations in existing buildings.

For automakers, the Liberals’ platform pledged continued support for the $8 billion Net-Zero Accelerator Fund, which backs industrial innovation projects, but introduces no new programs. In this year’s budget, the government proposed reducing the corporate tax rate on car companies building ZEVs. It is currently analyzing feedback from industry stakeholders on the plan that would, starting in 2022, cut in half the tax rate for makers of EVs and batteries.

Also introduced in the 2021 budget, the Liberals’ tax on vehicles costing $100,000 or more has sent shockwaves through the high-end vehicle market, with opponents criticizing the proposed tax as damaging to sales and ineffective. Consultations between government and industry remain ongoing, and the latest election platform recommits to the tax.

With files from the Canadian Press and David Kennedy of Automotive News Canada.