Air Products publishes 2025 Sustainability Report, aligning with GRI standards and showcasing economic, environmental, and social performance data.

Air Products has published its 2025 Sustainability Report, providing economic, environmental, and social performance data in accordance with Global Reporting Initiative (GRI) standards. The report includes data on the company's operations in over 50 countries and its commitment to supporting the transition to low- and zero-carbon energy in the industrial and heavy-duty transportation sectors.

The Canadian auto sector is undergoing significant transformations in 2025, driven by a mix of policy rollbacks, U.S. tariff escalations, and evolving market dynamics. These shifts necessitate a strategic reassessment for investors, as they balance opportunities in electric vehicle (EV) infrastructure and domestic production against near-term risks from tariffs and policy uncertainty.

Prime Minister Mark Carney's decision to delay Canada's zero-emission vehicle (ZEV) sales targets from 20% by 2026 to an unspecified timeline has sparked industry-wide ripples. The expiration of the iZEV program, which previously offered up to $5,000 in EV purchase incentives, has resulted in a 7.5% decline in EV sales in April 2025 [1]. This decline has forced automakers to either purchase costly compliance credits or restrict internal combustion engine (ICE) vehicle sales, further straining margins [3]. The government is exploring revised ZEV targets and potential reinstatement of incentives to align with market realities, introducing uncertainty for investors.

The U.S. imposition of 35% tariffs on Canadian goods in August 2025, coupled with extended steel and aluminum tariffs to 50%, has exacerbated cross-border tensions [6]. These tariffs are projected to increase production costs for automakers by 4%–8% by year-end, with ripple effects on consumer prices and demand [8]. General Motors and Ford have absorbed hundreds of millions in tariff-related costs, which they may pass on to consumers [9]. Meanwhile, the U.S. Commerce Department's "import adjustment offset" offers temporary relief but does not address long-term structural risks [10].

Canadian automakers are pivoting to mitigate these pressures. A landmark $5 billion investment by LG Energy Solution and Stellantis in a domestic EV battery plant underscores the sector's focus on vertical integration and supply chain resilience [11]. Volkswagen PowerCo and NextStar Energy are leveraging Canada's Strategic Innovation Fund to bolster battery production [12]. These investments align with broader goals to reduce reliance on U.S. and Chinese suppliers, which face heightened tariffs and geopolitical risks.

For EV credit providers, the 2025 policy and tariff environment necessitates a recalibration of risk assessment frameworks. Under Canada's Capital Adequacy Requirements (CAR) 2026, institutions are adopting the Internal Ratings-Based (IRB) Approach to model credit risk, incorporating metrics like probability of default (PD) and loss given default (LGD) [15]. This shift is driven by the sector's volatility: rising vehicle prices (up 2.5% in April 2025) and potential defaults due to inflationary pressures [16].

Investors face dual challenges: $65 billion in EV charging infrastructure opportunities versus tariff-driven supply chain risks and credit diversification needs in 2025-2040. Key opportunities include EV charging infrastructure and strategic partnerships between Canadian automakers and Chinese EV manufacturers, while risks include tariff volatility and credit risk diversification [21].

The Canadian auto sector's 2025 landscape is defined by duality: a push toward electrification and domestic resilience, tempered by the drag of U.S. tariffs and policy rollbacks. For investors, success hinges on strategic agility—allocating capital to infrastructure and partnerships while hedging against regulatory and trade uncertainties. As the sector navigates this crossroads, those who balance innovation with prudence will be best positioned to capitalize on the opportunities ahead.

References:

[1] https://www.bloomberg.com/news/articles/2025-09-05/canada-to-stall-electric-vehicle-rules-as-carney-seeks-to-boost-auto-sector
[2] https://www.cbc.ca/news/politics/electric-vehicle-mandate-doomed-1.7577811
[3] https://driving.ca/column/driving-by-numbers/10-evs-declining-sales-canada-2025
[4] https://tc.canada.ca/en/road-transportation/innovative-technologies/zero-emission-vehicles/incentives-zero-emission-vehicles/questions-answers
[5] https://www.theglobeandmail.com/business/commentary/article-canada-auto-industry-tariffs-ev-mandates/
[6] https://www.doanegrantthornton.ca/insights/how-new-tariffs-could-affect-canadian-businesses/
[7] https://www.canada.ca/en/department-finance/programs/international-trade-finance-policy/canadas-response-us-tariffs.html
[8] https://www.pwc.com/ca/en/services/tax/publications/tax-insights/us-impose-tariffs-automobiles-parts-2025.html
[9] https://www.automotive-fleet.com/10245772/how-are-tariffs-affecting-auto-industry
[10] https://www.assurant.com/news-insight/insights/automotive-industry/article/impact-of-automotive-tariffs-in-2025
[11] https://www.canada.ca/en/innovation-science-economic-development/news/2022/03/government-of-canada-welcomes-largest-investment-in-canadas-auto-industry-with-the-first-large-scale-domestic-ev-battery-manufacturing-facility.html
[12] https://ised-isde.canada.ca/site/planning-performance-reporting/en/departmental-plans/innovation-science-and-economic-development-canadas-2024-2025-departmental-plan
[13] https://www.dentons.com/en/insights/articles/2025/january/23/trends-and-challenges-shaping-the-automotive-industry-in-2025
[14] https://www.pwc.com/us/en/industries/industrial-products/library/automotive-industry-trends.html
[15] https://www.osfi-bsif.gc.ca/en/guidance/guidance-library/capital-adequacy-requirements-car-2026-chapter-5-credit-risk-internal-ratings-based-approach
[16] https://www.automotive-fleet.com/10235494/fleet-industry-braces-for-impact-as-tariff-battles-unfold
[17] https://www.automotive-fleet.com/10245772/how-are-tariffs-affecting-auto-industry
[18] https://www.bankofcanada.ca/wp-content/uploads/2025/04/financial-stability-report-2025-04-01.pdf
[19] https://www.ainvest.com/news/strategic-reassessment-canadian-auto-sector-exposure-ev-policy-rollbacks-tariff-pressures-2509/
[20] https://www.ainvest.com/news/strategic-reassessment-canadian-auto-sector-exposure-ev-policy-rollbacks-tariff-pressures-2509/
[21] https://www.ainvest.com/news/strategic-reassessment-canadian-auto-sector-exposure-ev-policy-rollbacks-tariff-pressures-2509/