why is it essential to own something that costs >$12K/y

In what way is it is essential for the vast majority of the population? Rural dwellers, perhaps (although Canada's Old Order Mennonite/Amish population seem to manage just fine), or those with particular disabilities, but most people?

I live in a small town and could easily go without a car. Imagine those who live in cities, which is the majority of Canadians. The whole reason they are wanting to jam themselves together so tightly is exactly so that they don't need vehicular transportation to live life!

I do own a car, though, as the ROI on my vehicle easily exceeds 10%. I don't like owning a car, but where else am I going to find those kind of returns?

My point is more that it shouldn’t be that way

It wouldn't be that way if it weren't a good investment, but it generally is (becoming much less so over the past couple of years, granted) for a lot of people. In part because of subsidies, of course, but I expect that it would still provide good ROI even if the subsidies were lifted. The early road infrastructure in Canada was built by private interests, after all.

Being capital, it is a useful tool that gets useful things done. When useful things get done, life improves for all of us. What else are you going to invest in with similar affordability, risk, and returns? In other words, which tools would most people find more useful than a car to get useful things done?