Fuel economy in Canada

Part of Global Fuel Economy Initiative 2021

Market profile and analysis of fuel consumption trends

Nearly 2 million new light-duty vehicles (LDVs) were sold in Canada in 2019, with an average fuel consumption of 8.6 litres of gasoline equivalent (Lge/ 100 km), which is higher than all other major LDV markets. At almost 21% above the global average, high fuel consumption levels in Canada reflect a growing share of SUVs/pick-up trucks. Notably, the sales share of SUV/pick-up trucks has grown from 33% of new LDVs in 2005 to 67% in 2019, which is the highest among major LDV markets and nearly one quarter above the global average. At the same time, the average weight of new LDVs has grown considerably, reaching 1 757 kg in 2019, almost 20% above the global average.

Fuel consumption decreased on average by 1.4% per year between 2005 and 2015 in Canada, before increasing by 0.3% between 2016 and 2017. Since this hiccup in fuel consumption improvements, Canada is back on track with fuel consumption decreasing on average by 1.6% per year between 2017 and 2019. Despite expanding shares of SUV/pick-ups putting upwards pressure on fuel consumption, a growing share of fuel efficient powertrains has allowed for fuel economy improvements. Between 2017 and 2019, the sales share of hybrids increased from 1.3% to 2.2%, along with shares of electric vehicles growing from 0.5% to 1.9% and plug-ins increasing from 0.5% to 1.0% during this time. Additionally, the sales share of flexfuel vehicles, which have a rated fuel consumption that is marginally higher compared to gasoline internal combustion engine vehicles, has decreased from 8.4% in 2017 to 4.5% in 2019.

Overview of current fuel economy policy

Canada closely aligns its regulations for vehicles and fuels with the United States, and adopted emissions and fuel standards harmonized with the US Tier 3 program in 2015. Standards apply to new passenger cars and light trucks for models years 2017-2025. Under Canada’s Passenger Automobile and Light Truck GHG Regulations, a 5% annual reduction in CO2-equivalent per mile for passenger cars is required from 2017 to 2025. For light trucks, the stringency of new fleet average greenhouse gas limits increases by 3.5% annually from 2017 to 2021 and 5% annually from 2022 to 2025. In response to propsals in the United States to increase the stringency of emissions standards for model years 2023-2025, Canada has announced intentions of aligning regulations with the most stringent performance standards in North America post-2025, whether that be at the United States federal or state level.

EnerGuide is the official Government of Canada mark for rating and labelling the energy consumption of products. Labels must be displayed on all new light-duty vehicles available for sale in Canada, and provide information on the type of fuel used by the vehicle, fuel consumption, annual fuel cost, CO2 and smog ratings, and vehicle class range.

In 2021, Canada set a target for all new LDV cars and trucks to be zero-emissions by 2035, which is a step up from its previous target of 100% sales by 2040. To assist in facilitating a transition to more fuel efficient powertrains, the Canadian government is implementing a 5-year USD 220 million program to increase the availability of charging and hydrogen refuelling stations throughout the country.