Good morning! This is Queen Street Analytics' weekly roundup of regulatory developments, legislative discussions, political announcements and other government-related news for car manufacturers, parts suppliers, car dealers, and others in the automotive industry. Every Monday, we break down the most important updates in this space in under five minutes.

Want to track the upstream and downstream forces affecting Automotive? Don’t miss this week’s updates in Manufacturing and Oil & Gas.

Dates: 2025-12-22 to 2026-01-18

📋 In This Week's Newsletter

• 🇨🇦 Federal Government News
• 🗺️ Provincial Government News
• 💬 Government Consultations
• 📚 What We're Reading This Week

Federal Government News

Government Announces Adjustments to 2026 Automobile Deduction Limits and Expense Benefit Rates

On January 14, 2026, the Department of Finance Canada released revised automobile income tax deduction limits and expense benefit rates effective January 1. The capital cost allowance (CCA) ceiling for Class 10.1 passenger vehicles acquired from this date increased from $38,000 to $39,000, before tax. The deductible allowance limit for employee use of personal vehicles for business, applicable in provinces, increased to 73 cents per kilometre for the first 5,000 kilometres, with 67 cents for additional distance; rates in the territories rose to 77 cents and 71 cents, respectively. Leasing cost, prescribed rates for employer-paid personal automobile expenses, the $61,000 CCA ceiling for Class 54 zero-emission vehicles, and the $350-per-month maximum interest deduction for new automobile loans remain unchanged for 2026.

Sources: www.canada.ca

Canadian International Trade Tribunal Determines Injury from Dumping and Subsidizing of Truck Bodies from China

On December 23, 2025, the Canadian International Trade Tribunal found a reasonable indication that dumped and subsidized truck bodies imported from China have caused injury to Canadian industry. This determination follows the Canada Border Services Agency (CBSA) initiation of investigations under the Special Import Measures Act. The CBSA will proceed with preliminary determinations by January 22, 2026. The Tribunal’s inquiry addresses relevant tariff protection, trade relations, and complaints under its mandate and sets the stage for possible anti-dumping or countervailing duties on affected imports pending the CBSA’s findings.

Sources: www.canada.ca

Tribunal Issues Findings on Carbon and Alloy Steel Wire Imports

On January 2, 2026, the Canadian International Trade Tribunal issued findings regarding the dumping of certain carbon and alloy steel wire originating from ten countries, including China, India, Italy, Spain, Türkiye, and Vietnam. The Tribunal considers whether these imports have injured or are likely to injure Canadian manufacturers. While its reasons will be released January 19, the initial decision responds to ongoing trade tensions affecting inputs crucial to automotive manufacture and supply chains within Canada. The Tribunal’s results could influence future import conditions for vehicle part producers and related industries.

Sources: www.canada.ca

Minister Solomon Announces Tariff Relief for Regional Steel Businesses

Federal Economic Development Agency for Southern Ontario Minister Evan Solomon announced over $3.4 million in regional tariff relief investments targeting steel and auto-adjacent businesses affected by market disruptions on January 12, 2026, in Welland, Ontario. Four initial projects, including Kit Steel Inc., Steelcon Fabrication Inc., Havelock Metal Co., and Titus Steel Company Ltd., will receive support for modernizing production and strengthening supply chain resilience. Kit Steel, for instance, is allocated more than $650,000 for state-of-the-art rebar fabrication upgrades. These measures address immediate competitive pressures in the steel and automotive sectors resulting from global trade dynamics.

Sources: www.canada.ca

Monthly Survey of Manufacturing Reports Declines in Motor Vehicle and Parts Sales

Statistics Canada released data showing a 1.2% decrease in manufacturing sales for November 2025, largely driven by reduced sales of motor vehicles, motor vehicle parts, and machinery. This downward trend is notable given ongoing adjustments in domestic manufacturing and demand patterns, with direct consequences for manufacturers, suppliers, and auto parts producers. The survey’s results align with cautious sentiment among automotive sector stakeholders regarding output and end-market performance.

Sources: www.statcan.gc.ca

Transport Canada Releases Safety and Security Programs Oversight Indicators for Q1 and Q2 2025/2026

On January 16, 2026, Transport Canada released updated multimodal safety and security programs oversight delivery indicators for the first and second quarters of fiscal 2025/2026. The dataset covers performance between April and September 2025 and includes regulatory oversight relevant to highway, rail, and vehicle safety. Automotive manufacturers and fleet operators may review the reporting for compliance benchmarks and to assess regulatory engagement metrics for safety programs.

Sources: www.statcan.gc.ca

Release of Commercial and Industrial Machinery and Equipment Rental and Leasing Services Price Index (Q3 2025)

Statistics Canada published the Commercial and Industrial Machinery and Equipment Rental and Leasing Services Price Index for the third quarter of 2025. This dataset enables tracking of price trends affecting rental and leasing operations for automotive dealers and fleet managers. Indices can influence cost structures and inform decisions for short- and long-term vehicle leasing arrangements.

Sources: www.statcan.gc.ca

Machinery and Equipment Price Index Released for October 2025

On January 15, 2026, Statistics Canada issued the Machinery and Equipment Price Index (2016=100) for October 2025. The release provides insights into broad equipment price movements including those relevant to auto parts manufacturing and sales. Automotive sector stakeholders using updated machinery or procuring equipment may reference these figures to track input inflation risk and transactional pricing shifts.

Sources: www.statcan.gc.ca

Publication of Refined Petroleum Product Data for November 2025

Statistics Canada announced that November 2025 production and inventory data for refined petroleum products is available on request. This data is significant to automotive fuel suppliers, component manufacturers, and vehicle logistics operators monitoring market shifts in refined fuels and by-products.

Sources: www.statcan.gc.ca

Provincial Government News

Ontario Implements Regulations to Increase Canadian Content in Subway Cars

The Ontario government will raise the Canadian content in 55 Toronto Line 2 subway trains to 55%, as announced on January 15, 2026. This policy shift supports domestic manufacturing, steel, and aluminum suppliers serving the automotive and transit sectors.

Sources: news.ontario.ca

Ontario Announces New Motor Vehicle Dealers Act Regulations on Continuing Education

Ontario amended Motor Vehicle Dealers Act regulations to require sales professionals to complete continuing education prior to registration renewal. The change aims to keep dealership staff current with their statutory responsibilities.

Sources: news.ontario.ca

Manitoba Introduces New Road Safety Measures

Effective January 1, 2026, Manitoba enforces updates to its Highway Traffic Act, introducing rules for passing winter maintenance vehicles and cyclists, and enabling tow truck operators to create work zone safety buffers.

Sources: news.gov.mb.ca

Ontario Enacts Labor Mobility and Free-Trade Regulations

Beginning January 1, 2026, Ontario’s 'As of Right' labor mobility and mutual recognition regulations expedite certification for in-demand trades and professionals, including those working in automotive-adjacent fields.

Sources: news.ontario.ca

GM Absorbs $6 Billion in Charges Amid EV Incentive Reductions and Fading Emissions Standards

General Motors faces $6 billion in financial charges as it navigates an environment of reduced EV incentives and the attenuation of emissions standards, as covered in a January 9, 2026 media report. These developments follow US federal adjustments in clean automotive policy, impacting manufacturers, cross-border supply chains, and Canadian auto exports linked to US regulatory and incentive structures. The reduction in rebates and evolving emissions targets add complexity for US companies operating in Canada or sourcing Canadian-made vehicles. The situation amplifies uncertainty for manufacturers across North America regarding compliance trajectories and market planning.

Sources: www.ctvnews.ca

Government Consultations

Transport Canada Launches Consultation on Night-time Vehicle Headlight Glare

Starting January 12, 2026, Transport Canada is seeking feedback on how headlight glare affects night-time driving in Canada, with attention to vehicle and lighting features that influence glare experience.

Sources: NA

What We're Reading This Week

• Ford, Unifor sound alarm over China EV deal: Ford and Unifor publicly expressed concerns about the impact of a quota agreement on Chinese electric vehicles.
• Carney’s tariff deal with China could risk auto-sector competitiveness, industry leaders say: Multiple industry leaders responded to the federal government's quota deal for China EVs, citing threats to automotive competitiveness.
• China EV deal puts Canada’s entire auto sector at risk, industry leaders say: Organizations conveyed concern that the Canada-China quota arrangement for electric vehicles could challenge sector viability.
• ‘Cheap has a price’: Auto industry, unions react to Canada’s EV deal with China: Unions and automotive associations responded to the newly announced EV quota deal with China.
• China EV tariff deal raises long-term questions for Windsor, Ont. auto sector: Regional media outlets outlined prospective effects of the Canada-China electric vehicle tariff agreement on operations in Windsor.
• Tariffs and turbulence: The 5 stories that dominated Canadian auto news this year: Annual review in the Canadian press summarized top events affecting automotive tariffs and market conditions.
• U.S. automakers urge Washington to uphold USMCA: US automotive companies called for adherence to USMCA arrangements.
• USMCA is critical for U.S. auto production, Michigan governor says: Michigan’s governor discussed how USMCA trade terms support American automotive manufacturing.

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