In Canada, the transportation sector accounts for approximately 24% of Greenhouse Gas (“GHG”) emissions. On November 27, 2012 Canada’s Environment Minister, the Honourable Peter Kent, announced proposed regulations to improve fuel efficiency of Canadian automobiles thereby reducing GHG emissions.

The proposed regulations, Regulations Amending the Passenger Automobile and Light Truck Greenhouse Gas Emission Regulations, establish progressively more stringent GHG emission standards for passenger automobiles and light trucks over the 2017 to 2025 model years. These proposed regulations are in addition to, and build upon, the existing regulations which cover model years 2011 to 2016.

Minister Kent stated that the new regulations will “improve fuel efficiency so that new cars will consume 50% less fuel and emit 50% less GHGs than a similar 2008 model.” These proposed regulations are good news for the environment and for Canadians’ bottom lines. “At today’s gas prices, a Canadian driving a model year 2025 vehicle would pay, on average, around $900 less per year compared to driving today’s new vehicles” Minister Kent added.

For model years 2017 to 2025, cars will be required to achieve an average of 5% annual GHG emissions reductions. Light trucks will be required to achieve an average of 3.5% annual GHG emission reductions from model year 2017 to 2021 and 5% reductions from 2022 to 2025. This allows light trucks to still do the work that they are required to do without sacrificing performance while companies develop technological solutions for achieving the required GHG reductions.

The proposed regulations are also aligned with the US regulations, maintaining the competitiveness of Canadian vehicle manufacturers within the North American auto industry and another step in the Government of Canada’s sector-by-sector approach to reducing GHG emissions.