Ottawa Considers Adjusting Zero-Emission Vehicle Rebate

Workers assemble Chevy Bolt EVs at the General Motors assembly plant in Orion Township, Mich., on Nov. 4, 2016. Joe White/Reuters

The Department of Transport is looking at adjusting the rebate customers can claim when buying a zero-emission vehicle (ZEV), says a briefing note, as first reported by Blacklock’s Reporter.

Right now consumers can get up to $5,000 for buying a battery-electric vehicle (BEV), hydrogen fuel cell vehicle, or longer-range plug-in hybrid electric vehicle (PHEV), the latter referring to a vehicle with an electric range of at least 50 kilometres. Shorter-range PHEVs are eligible for up to $2,500.

A similar U.S. program pays nearly twice as much as Canada’s $5,000 rebate.

“Transport Canada will continue to monitor zero-emission vehicle results and assess the need for adjustments to the program to ensure it is meeting its objectives,” said the briefing note titled “Incentives for Zero Emission Vehicles Program.”

“The United States is offering a clean vehicle tax credit that would provide eligible individuals with up to US$7,500 or approximately CDN$9,600 off an eligible new vehicle and up to US$4,000 or CDN$5,100 of an eligible used vehicle.”

The federal government introduced the rebates program in 2019, which has seen approximately 185,000 rebates paid out so far.

Statistics Canada, in a January 2023 report on new motor vehicle registrations in the third quarter of 2022, said that during that quarter, 19,608 (57 percent) of the total 34,313 new ZEV registrations in Canada were from three cities: Montreal, Toronto, and Vancouver.

The national statistical agency’s report said that the share of ZEVs is approaching 10 percent. In Q3 of 2022, the overall 34,313 new ZEV registrations represented 8.7 percent of total new motor vehicle registrations. The report also noted that the number of new ZEVs registered continued to increase, up 43.2 percent year over year.

Ottawa has set ZEV sales targets of at least 20 percent of new light-duty vehicles (passenger cars, SUVs, and light trucks) sold in Canada to be zero-emission by 2026, at least 60 percent by 2030, and 100 percent by 2035.

For its reporting, StatsCan defined ZEVs as being either BEVs or PHEVs that can potentially produce no tailpipe emissions.

In a continuing trend seen over the last four years, BEVs made up the largest share of new ZEV registrations, representing 85.6 percent of new ZEVs registered in 2022 Q3, while PHEVs comprised the other 14.4 percent, according to the StatsCan report.

The report also noted that Canada’s three largest provinces accounted for 91.8 percent of all new ZEVs registered in Q3 of 2022. The most were registered in Quebec, followed by Ontario and then British Columbia.

Privy Council Office research in 2022 found Canadians divided over the program, according to Blacklock’s Reporter. “Most participants were aware of the Government of Canada’s target to make all new cars sold in Canada zero-emission vehicles by 2035.”

“Several worried about the cost to purchase a zero-emission vehicle presuming it could be prohibitive for many consumers,” added the report “Continuous Qualitative Data Collection of Canadians’ Views.”

B.C. pays its own rebate on eligible electric vehicles of up to $4,000 per vehicle. Quebec offers a rebate of up to $7,000. Ontario in 2018 cancelled its subsidy that paid up to $14,000 in rebates.