Canada’s Minister of Environment and Climate Change, Catherine McKenna, and the Chair of the California Air Resources Board, Mary Nichols, today signed a new cooperation agreement to advance cleaner vehicles and fuels. The transportation sector is the source of nearly a quarter of Canada’s carbon emissions and more than 40% of California’s.

The Memorandum of Understanding commits both governments to work together on developing their respective regulations to cut greenhouse gas emissions from light-duty vehicles, such as those currently in effect in Canada, California and the 13 US states that have adopted California’s standards.

Canada is currently completing a mid-term review of its light duty vehicle regulations. California conducted a similar review in 2016 for vehicle standards through the 2025 model year and found the standards achievable, cost-effective and appropriate.

The partnership will see Canada and California work together to accelerate the adoption of zero-tailpipe-emission vehicles such as electric cars. This could include sharing lessons learned by both jurisdictions about requirements, incentives, and dealer inducements to boost sales, along with sharing approaches to developing charging infrastructure.

The two jurisdictions will also share technical information and best practices in regulating cleaner fuels, as California does today though its Low-Carbon Fuel Standard. Canada is developing a Clean Fuel Standard that will cut emissions by 30 million tonnes in 2030.

The cooperation will take a variety of forms, including establishing a working group that meets annually, sharing policy information and program design, providing capacity building and technical support, exchanges of personnel, cooperative research and development, and joint organization of symposia and trainings. The two regulatory agencies will also work together on emissions testing and enforcement of vehicle regulations.

In the 2019 budget, the Government of Canada announced rebates of up to $5,000 for consumers on the purchase of zero-emission vehicles. Businesses that buy zero-emission vehicles are also now eligible for a tax benefit estimated to be worth around $13,000 in the year they purchase the vehicles.

California has allocated $238 million in its 2019 budget for incentives to purchase electric and fuel cell vehicles, with a focus on low-income consumers and in disadvantaged communities.

To date, California has invested $820 million in incentives for zero-emission and plug-in vehicles. Today in California, one in ten new car sales is a plug-in car; and half of all plug-in cars sold in the United States to date—almost 600,000—are in California.

Canada aims to have 100% of vehicles sold in this country be zero-emission by 2040. California requires automakers to ensure that a growing fraction of their sales are zero-emission vehicles and aims to have five million zero-emission vehicles on the road by 2030.

The 13 states working with California on regulations to cut greenhouse gas emissions from vehicles are Colorado, Connecticut, Delaware, Maine, Maryland, Massachusetts, New Jersey, New York, Oregon, Pennsylvania, Rhode Island, Vermont and Washington. Combined, these states and California constitute more than 40% of the US passenger vehicle market.