Federal Electric Vehicle Rebate Program Went $459 Million Over Budget: Internal Audit

A woman prepares to plug in her electric vehicle in Markham, Ont., in a file photo. The Canadian Press/Frank Gunn

A federal program introduced in 2019 to offer Canadian electric vehicle buyers a rebate of $5,000 went over budget by $459 million, according to an internal audit by Transport Canada.

“Despite the pandemic, the uptake of the iZEV Program was higher than expected and funding was an ongoing concern,” reads the audit, published Nov. 30, 2022, as first reported by Blacklock’s Reporter.

It adds that the federal program quickly exhausted its original $300 million funding and needed two subsequent top-ups of $287 million and $172 million—equalling a total of $459 million more than the original funding—to keep the program running until its planned end on March 31, 2022.

“Recently, Budget 2022 included an additional $1.6 billion to extend the iZEV Program to March 31, 2025. Program parameters were also modified to increase the number of makes and models of eligible new ZEVs,” the audit says.

The audit, titled “Audit Of Incentives For Zero Emission Vehicles Program,” also says that the “overwhelming majority” of requests to receive the incentive, equalling a total of 142,232 as of the end of February 2022, were accepted.

“Of these, 134,406 (98%) have been processed for reimbursement to dealerships in the amount of $578,324,062,” it reads.

The federal government’s “2030 Strategic Plan” includes a commitment by Transport Minister Omar Alghabra to meet several targets mandating that certain percentages of cars sold in Canada over the next 12 years be zero emission vehicles.

By 2035, the department aims for all light-duty vehicles sold in Canada to be zero-emission.

Recent regulations proposed by Environment Minister Steven Guilbeault would also mandate that one-fifth of new passenger vehicles sold in Canada will have to be zero-emission by 2026. That number would rise to 60 percent by 2030.

Subsidies

Tesla Motors Canada asked the federal government at the end of November 2022 for more subsidies to install additional charging stations across the country.

“Approximately 10 million Canadians or about one quarter of all Canadian residents live in multi-unit dwellings including apartments and condominiums,” said the company in a submission to the House of Commons finance committee.

“Since 90 percent of charging typically takes place at a driver’s home, ensuring the occupants of those multi-unit dwellings have a place to charge would offer the Government of Canada the greatest return on its charging infrastructure investment.”

Recent federal figures found that the government’s proposed mandate that all new passenger cars and other light-duty vehicles sold in Canada be zero-emission by 2035 would cost at least $99 billion—a figure that does not include at-home vehicle charging costs.

“Installation costs [of personal charging stations] have not been accounted for in this analysis and thus may be underestimated,” said an Environment Department regulatory impact analysis statement on Dec. 31.

The federal government has spent $1 billion since 2016 installing a nationwide network of public charging stations and has committed to funding 50,000 more stations across the country by 2027.

Tara MacIsaac and Isaac Teo contributed to this report.