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The federal government’s successful incentive program for zero-emissions vehicle purchases is running out of money and not slated for renewal, much to the dismay of environmental and industry groups.
The federal government’s decision not to top up the rebate program with additional funding jeopardizes Canada’s target for 20 per cent of vehicle sales to be zero-emissions vehicles (ZEVs) by 2026, warned Electric Mobility Canada in a press release.
“Canadians who want to make the switch to electric mobility are left with very little time to take advantage of the incentive, which is the exact opposite of a predictable and sustainable program for consumers and industry,” said Daniel Breton, President and CEO of Electric Mobility Canada.
The up-front cost to purchase an EV is typically higher than a comparable gas-powered vehicle. The federal rebate program aimed to alleviate some of this sticker shock and encourage people to make the switch from gas to electric by bringing down the purchase price of electric vehicles, which save owners money in the long run thanks to cheaper charging and lower maintenance costs.
Electric Mobility Canada, Environmental Defence and Clean Energy Canada quickly called on the current government — or a future government — to continue the ZEV rebate program.
The funding program provides rebates of up to $5,000 for battery-electric, plug-in hybrid and hydrogen vehicle purchases and leases. The program was scheduled to pause at the end of March, but the money could run dry before then.
Since the program started up in 2019, it has provided rebates for over 546,000 vehicles, according to Transport Canada. As of Jan. 10, 2024, $71,817,104 remained, enough to provide rebates for approximately 16,000 ZEVs, according to Electric Mobility Canada.
This popular, climate-fighting program didn’t have to end, Environmental Defence’s clean transportation program manager Nate Wallace lamented in a press release. In the third quarter of 2024, 16.7 per cent of new vehicles registered in Canada were zero-emissions vehicles, according to S&P Global. That number was only 3.1 per cent back in 2019, according to Transport Canada.
“The federal government has long known that due to rapidly growing electric vehicle sales, funding for the iZEV program was going to run out early in 2025,” Wallace said.
“There was an opportunity in Finance Minister Chrystia Freeland’s recent Fall Economic Statement to include stopgap funding to top up the program and prevent this from occurring.”
The lack of federal rebates mean Canadians will have to pay more up front to switch from gas to electric, Wallace said.
Canadian EV drivers save about $30,000 to $40,000 over the course of the vehicle's life compared to driving a gas car according to a Clean Energy Canada analysis published Oct. 16 2024. This translates to savings of $3,000 to $4,000 per year, or, can be visualized as EV drivers paying the equivalent of $0.40 per litre of gas to charge their cars over the vehicles’ lifetime.
“The appeal to Canadians was undeniable,” Joanna Kyriazis, director of public affairs at Clean Energy Canada, said in a press release. Rebate claims hit an all-time high in the third quarter of 2024 but with the lapse of the rebate program and new tariffs restricting imports of cheaper EVs from China, Canadians could be facing higher initial costs, Kyriazis warned.
In the last four years Canada has attracted over $46 billion in investments across the EV battery supply chain, according to a June report by the Parliamentary Budget Officer. This is paired with an estimated $52.5 billion in federal and provincial support for projects like Stellantis-LGES and Volkswagen’s electric battery plants.
“Pulling the rug out from under the incentive program represents a short sighted approach — we are making it harder for Canadians to buy the very cars they are invested in making,” Kyriazis said, adding this is an unnecessary barrier for Canada’s “still vulnerable” EV industry.
Natasha Bulowski / Local Journalism Initiative / Canada’s National Observer
Comments
why did the author not include how much money the federal government kicked each year.. or has spent.. and why no numbers on how much taxpayers dolled out to oil coal and lng?
not a very good article in my mind.. anyone can get the same info from any source.. as a reader, if you expect to keep me paying you, I'd like to see some some original investigative writing. not msm dribble
I don't agree, I think the article brings together key information from a variety of sources and presents a good picture of the current situation. I was unaware of most of the information contained in the article.
Sounds like good news to me.
Next step. Cancel carbon capture (CCS) subsidies for the O&G industry.
EV and CCS subsidies rank among the least effective, least progressive, most inefficient ways to reduce emissions. You may as well throw money out the window.
EV subsidies perpetuate the most destructive, least sustainable form of transportation, namely the private automobile.
Climate activists fixated on electric vehicles as a climate solution ignore the prohibitive environmental, social, and health costs of cars, car culture, and urban sprawl. Blinkered thinking. Climate is not our only problem.
Meanwhile, public transit — the optimal transportation solution — is starved for funds.
In cities like Edmonton, public transit has entered a death spiral with reduced service, fewer routes, higher fares, poor security, long waits in bitter winter weather, etc. People cannot take a bus that does not run from bus stops that do not exist.
Canadian cities have been super-sprawling for decades, as public transit goes into a death spiral. EV subsidies only exacerbate the problem.
Urban planning advocate Jason Slaughter: "EVs are here to save the car industry, not the planet. Electric cars are still a horrendously inefficient way to move people around, especially in crowded cities."
"With their futuristic designs and new technology, EVs are the seductive consumer-friendly face of the energy transition.…For people with money and a conscience, EVs are doubly satisfying. They allow the affluent to indulge in the time-honoured pleasures of conspicuous consumption while at the same time saving the planet."
"Rush to electric vehicles may be an expensive mistake, say climate strategists" (CBC)
EVs are the yuppie response to climate change. Not for nothing that most of the first EV models were luxury cars beyond the reach of most citizens. Wealthy progressives want EV subsidies so they can salve their guilty conscience over their outsize footprint without having to make any real change in their unsustainable lifestyles.
"Shifting to EVs is not enough. The deeper problem is our car dependence" (CBC)
We can cut far more emissions far faster starting today with public transit. Not least because cars spent most of the 24-hour day parked.
Economies of scale matter. A bus can carry 40 to 60 people at a time — and hundreds throughout the day. A car typically carries just one — the driver.
Given the high price per tonne of carbon reduction, auto-industry and EV subsidies rank among the least cost-effective and least efficient ways to spend our transportation and climate dollars.
Climate/EV subsidies for households are regressive, because they largely flow to affluent consumers who do not need them.
Two hundred EV subsidies ($5000) for 200 affluent households who do not require subsidies while non-drivers, the marginalized, the young, the old, the disabled wait for a bus that never comes? Or 20,000 free transit passes? Or a brand-new electric bus with room for 60 passengers?
For $1 million in public funds, we can shift 60 ICE car drivers at a time onto a new electric bus that runs all day — or subsidize 200 EVs that cost $40,000-$75,000 a pop (plus infrastructure costs) that spend most of their life parked.
Aggregated, $5000 EV subsidies per household can move many more people on transit. We can move far more people on transit for less cost.
Fiscal efficiency matters.
So it's EV subsidies or Transit? Why not EV subsidies and Transit vs Oil and Gas subsidies or fighter jets or whatever? There's this belief in the environmental community that we should fight for the crumbs between ourselves.
As for your EV pricing, I would suggest you look at the price of Chinese EVs. Also there's no reason we need to be driving EV tanks. EVs could be much smaller. Mostly people drive alone or have one passenger. So make an EV that has two seats, one behind the other. Add solar and make it super efficient like an Aptera.
Sinking public dollars into private cars just slows public transit down — and puts the only sustainable solution out of reach.
There is no evolution from more private cars and more sprawl to efficient public transit. More private cars and more sprawl do not enable efficient public transit at some future date — they make it impossible.
If the ultimate goal is efficient public transit, it is self-defeating to promote car use and enable sprawl.
The supply of tax dollars is not infinite. Scarce public dollars spent on private cars are dollars not spent on public transit.
Once middle- and upper-class consumers are happily ensconced in their automobiles, there is no shifting them. There is no incentive for governments to invest in and improve transit if the vast majority vote for cars and EV subsidies.
Transportation policy and investment focussed on cars abandons the marginalized — the poor without political power, seniors, the handicapped, and environmentalists — without hope of essential mobility options. While the Liberals pour tens of billions into the auto and O&G industries, millions of ordinary Canadians are left stranded due to lack of transportation options. Non-drivers — the poor, the young, and the old — remain marginalized.
Down with EVs, EV subsidies, sprawl, and private convenience at public expense.
Up with public transit, cycling, and walking. The only sustainable options.