EV transition runs into more trouble as Transport Canada abruptly pauses rebate program
The electric vehicle transition in Canada is hitting another speed bump, as major incentive programs that shave thousands of dollars off the price tag of a new EV are being curtailed and cut short.
Transport Canada on Monday said it “paused” its financial incentive program over the weekend, which provided up to $5,000 to consumers, and Quebec said it plans to temporarily suspend its program, which had provided as much as $7,000 back, in February.
Analysts have described such consumer rebates as a pillar that underpins EV sales, which accounted for 16.5 per cent of all new sales in the third quarter of 2024, their highest level to date.
The looming end to rebate programs has angered many in the auto sector who say it will make it challenging for automakers to meet federal and provincial EV sales mandates.
“This decision is particularly frustrating for dealers,” Charles Bernard, lead economist at the Canadian Automobile Dealers Association, said via email. “There is obvious hypocrisy in imposing ambitious (zero-emissions vehicle) targets and affiliated penalties on the industry and consumers when the government is showing a clear lack of motivation and support to meet these goals.”
The federal program, known as Incentives for Zero-Emission Vehicles (iZEV), was scheduled to expire in March 2025 or until funds ran out. A separate incentive program for businesses purchasing trucks will continue until March 2026 or until funds run out.
The issue hardly ends in Canada for automakers. Donald Trump, who becomes president of the United States next week, has also said he plans to scrap tax credits that provide up to US$7,500 on EV purchases.
Economists say data shows tax credits, rebates and other financial incentives that lower
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