Tariffs and turbulence: The 5 stories that dominated Canadian auto news this year

This year has, without a doubt, been a turbulent one for the Canadian auto industry. Uncertainty dominated the sector — both for auto workers hit with job changes and companies trying to manage a mix of tariffs and changing market conditions.

Let’s break it down, in no particular order.

This one won't come as a surprise. The threat of U.S. tariffs on the auto sector — and then the reality of those tariffs — has loomed over the business for the entirety of the year. They've cut profits, affected jobs and changed investment plans.

And you're not alone if you've had trouble keeping track of which tariffs are in effect and how they work. U.S. President Donald Trump's 25 per cent levies on a broad range of Canadian products kicked in on March 4, but just two days later, he partially backtracked by creating an exception for goods that comply with the existing trade deal between Canada, the U.S., and Mexico, known as CUSMA.

That provided some relief for businesses. But it wasn't long before he made more threats, this time targeting the auto industry with 25 per cent tariffs, despite the sector being deeply interconnected across the continent. He ended up watering those tariffs down too, though, so the impact was less severe.

Still, automakers have reported billions in tariff hits. Steep aluminum and steel levies have also played a role. There's no immediate end in sight, but with CUSMA up for review in 2026, there could be movement on a new trade framework by mid-year.

In September, the federal government announced that it's putting plans to force car companies to hit minimum sales levels for electric vehicles on the backburner. Prime Minister Mark Carney said the pause and review of the EV mandate is intended to relieve some of the "extreme pressure" automakers are feeling from Trump's tariffs.

The auto industry had been lobbying for the EV mandate's repeal and applauded the move, saying consumers weren't flocking to battery-powered cars as quickly as expected. Environmental activists were less happy, though.

The change came amid a broader turn away from car-related climate initiatives as consumer costs rose. Carney's first move as prime minister was to kill the consumer carbon tax, which had made gas more expensive. Meanwhile, Canada's rebate program to make EVs more affordable is on pause.

In Canada's car capital of Windsor, Ont., the changing market has fueled a major pivot at a new $5-billion facility. The NextStar Energy plant, intended to produce EV batteries for Stellantis, is now prioritizing batteries for power grid storage systems but can adjust to market demands.

News in October that Stellantis is scrapping plans to build the Jeep Compass at its assembly plant in Brampton, Ont., sent shockwaves through the industry and political landscape. On Oct. 15, the global automaker revealed that it will instead build the Compass at an idled facility in Belvidere, Illinois — a decision widely derided in Canada as a move to appease Trump.

Stellantis had already paused a large-scale retooling of the plant in Brampton — a modernization that would have allowed it to build both electric and gas-powered vehicles, like the Windsor plant.

Now, the roughly 3,000 workers in Brampton face an uncertain future. Some have even made the trip down the 401 to work at the Windsor plant as the company hires for a third shift there.

Stellantis insists it's looking for a solution, but the federal officials — under intense scrutiny by the opposition — have come out swinging, claiming the company violated the terms of its funding agreements with the government.