VW, Nissan Pushing for Broader Safety Standards to Get Cheaper Vehicles in Canada

Between widespread inflation in the automotive industry and tariffs on American-made products, affordability is becoming a major issue. Automakers can do a few things about that, of course, but other solutions have to go through the government.

One of them, championed notably by the Canadian Automobile Dealers Association (CADA), is loosening vehicle safety standards to bring them in line with those of Europe and Asia, which would allow car companies to import more models capable of meeting the needs of Canadian drivers, such as small cars and electric vehicles.

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“By no longer requiring harmonized standards for North America, Canadians would be able to have more vehicle choices,” CADA President and CEO Tim Reuss said back in April, adding that Canada has stuck to the U.S. vehicle environmental and safety standards for “far too long.”

Volkswagen, Nissan Also See an Opportunity

Among the automakers that share this view are Volkswagen and Nissan. In October, the president of VW Canada, Edgar Estrada, said he was open to importing more European models, but current safety standards do not allow it.

Meanwhile, Nissan Americas chairman Christian Meunier told Automotive News in recent days that the company would be “in a position to bring some more affordable, very good products for the Canadians” if the regulations were standardized with Europe and Asia. Ironically, the decision was made to axe the Versa subcompact sedan—Canada’s cheapest new vehicle—for the 2026 model year.

According to Meunier, there is no market for small cars in the U.S., but Canadians have an appetite for the compact models available overseas and would embrace more of them.

For this to happen, the door must be opened, meaning that the restrictive Canada Motor Vehicle Safety Standards should no longer be tied to the U.S. Federal Motor Vehicle Safety Standards, thus facilitating the certification process to bring vehicles exclusively to Canada if companies so desire.

Transport Canada, on the other hand, argues that looser safety rules would require legislative changes to the Motor Vehicle Safety Act, and those changes could put drivers at risk. Could they also further strain Ottawa’s relationship with Washington? That’s certainly another thing to consider.