Canadian car prices to soar under new regulations

New rules aimed at protecting the environment will drive up the price of new cars and trucks by thousands of dollars but save motorists money at the pump.

Environment Minister Peter Kent takes part in a press conference at a car dealership in Ottawa on Tuesday November …

There’s good news and there’s bad news, says Peter Kent. It’s going to hurt more when you buy your next car in Canada, but hurt less when you fill it up.

This week the environment minister announced that, by 2025, Canadian cars and light trucks must be 50-per-cent more fuel efficient and emit half as much greenhouse gases as current models. The new rules, which mimic those set recently in the U.S., are expected to drive up the price of new cars and trucks.

            10 cars with the longest cruising range
            The runaway winner the high-efficiency race

The obvious question is, By how much? Estimates vary.

Government officials, likely keen to keep the number digestible, estimate that the cost of an utterly run-of-the-mill car in Canada will rise by $700 in 2021 and $1,800 by 2025.

Not quite, say independent analysts. Since scientists haven’t yet developed the power-train technology, new light-weight materials needed to make such efficiency gains, we should expect the added cost to look more like $5,200.  

The most alarming estimate, not surprisingly, comes from the Center for Automotive Research (CAR), an industry-sponsored think-tank based in Michigan. “The [auto makers’] research and development departments tell us the true cost is more like $10,000 per vehicle by 2025,” CAR executive Sean McAlinden told the Globe and Mail.

Officials say that the higher efficiency will translate to $900 in annual fuel savings for Canadian motorists.

Do the new regulations mean the Conservatives are seriously addressing Canada’s reputation as an environmental laggard? Perhaps. Between 2016 to 2025, the new regulations aim to improve on tougher standards already in place for 2012 to 2016, and would improve the average fuel efficiency to 4.3 litres per 100 kilometres.

Not coincidentally, Peter Kent leaves this weekend for the UN climate summit, in Qatar. Canada has been subject of international scorn for its lack of aggressive action on climate change, particularly after its withdrawal from the Kyoto Protocol, the 1997 agreement whose ambitious 2012 emission-reduction targets Canada has failed to achieve.