The intention behind Canada's move is very obvious, which is to retaliate against Trump's close ally and Tesla CEO Musk.
Canada freezes subsidies for Tesla
Freeland said the Canadian government will investigate each Tesla subsidy individually. The Government of Canada will not pay subsidies until all subsidies have been investigated and determined to be valid.
Freeland also directed the Department of Transportation to revise the eligibility requirements for future Canada Zero Emission Vehicle Incentive (iZEV) programs to ensureTesla vehicles will not be eligible for subsidies as long as "the United States imposes unlawful and illegal tariffs on Canada."
U.S. President Trump has previously announced a series of new tariff measures, most of which will take effect in early April. According to his previously announced plan, the United States will impose high tariffs of 25% on most goods from Canada and Mexico. As recently as Monday, Trump said he would soon push for auto tariffs.
Canada froze the 43 million Canadian dollars (approximately RMB 219 million) originally paid to Tesla. Earlier this month, the Canadian city of Toronto stopped offering financial incentives for buying Tesla cars to use as taxis or ride-shares as Canada's trade relationship with the United States grows tense.
Public opinion of Musk rapidly deteriorating in Canada
The Canadian government's attitude towards Tesla has turned cold, which is obviously inseparable from Tesla CEO Musk.
Musk has become a close ally of Trump due to his strong support for Trump in the US election last year and was appointed as the head of the so-called Department of Government Effectiveness (DOGE). As Trump repeatedly threatened to "annex Canada" after taking office and raised tariffs on Canada, the Canadian public's attitude towards Musk also rapidly deteriorated.
Recently, many Tesla dealers across the United States and Canada have suffered a series of attacks such as shootings and arson. Last week, the Vancouver International Auto Show banned Tesla from this year's event, citing safety concerns.
More than 160,000 Canadians had previously signed an online petition calling for Musk to be stripped of his Canadian citizenship. Musk later responded by posting on the X platform that "Canada is not a real country." However, he later deleted the tweet.