The abrupt end of a federal program giving Canadians money to buy electric vehicles is creating confusion among dealerships, automakers and customers, as well as threatening to slow sales in a market seen as a key part of the country’s climate ambitions.
Last Friday, the federal government announced that the Incentives for Zero-Emission Vehicles (iZEV) program would be “paused” ahead of its scheduled March end date, as funds were running out due to a “surge of interest.”
An update on Monday said the program was completely stopped and that there would be no further access.
“It took everybody by shock, to be honest,” said David Adams, president and CEO of Global Automakers of Canada, a national trade association.
So where does this decision leave Canadians in the market for an EV in 2025?
$5K rebate over
The iZEV program offered customers up to $5,000 toward an EV purchase, subject to some restrictions. That’s effectively gone across the country.
If you had ordered a vehicle recently, the government says the paperwork had to have been submitted prior to Monday (Jan. 13) and pre-approved by Transport Canada, without exception.
“The problem is for dealers,” said Adams, who called the government’s communication irresponsible. “Maybe they didn’t file their paperwork [because] nobody knew the program was going to end on Monday.”
Where in Canada are there still incentives?
Some provinces and territories have their own subsidies, further discounting EVs on top of the federal incentive. Quebec had the most generous, providing up to $7,000. But Quebec will temporarily halt its Roulez vert subsidy starting next month.
Quebec is “pausing the rebate program for February and March, but it’s going to come back in April,” said Daniel Breton, president and CEO of Electric Mobility Canada, an EV industry association. But when it does, the incentive will be lowered to $4,000, as planned.
Other provinces still offer electric vehicle rebates. (Note: these subsidies are maximums based on purchasing; there are lower incentives for leasing and used vehicles.)
Here’s the situation across Canada:
-
British Columbia: Up to $4,000 subject to income requirements.
-
Newfoundland and Labrador: Up to $2,500. The program is set to end on March 15.
-
Nova Scotia: Up to $3,000. The program may end once funds are exhausted, subject to no notice.
-
Yukon: Up to $5,000, including on plug-in hybrids (PHEVs) with an electric range of more than 50 kilometres.
-
New Brunswick: Up to $5,000, again subject to the program running out of funds.
-
Prince Edward Island: Up to $5,000.
-
Manitoba: Up to $4,000, with a program end date of March 2026.
Notably, these regions use the added funds from the federal program as a selling point for their own incentives. Northwest Territories used to offer $7,500, but is no longer accepting applications for rebates. Alberta, Saskatchewan, Ontario and Nunavut do not offer rebates.
Concerns are growing over Quebec’s $7-billion electric vehicle battery plant as demand for the product slows. But the province’s EV efforts are still being touted by some as a smart long-term economic move.
“The rebates have helped people that were on the fence make the jump,” said Bob Porter, president of the Vancouver Electric Vehicles Association. Like all cars, EVs range wildly in price — with the entry level in Canada around $40,000 and luxury models north of $180,000, according to the Canadian Automobile Association.
Pause or pretty much permanent?
Experts say the iZEV program has helped boost EV sales. Statistics Canada says new EV sales have grown steadily year over year.
“During the third quarter of 2024, EV and PHEV [plug-in hybrid electric vehicles] sales were at 16.5 per cent,” said Breton, adding it possibly put Canada on track to surpass its mandate of at least 20 per cent of all new car sales being electric by 2026. But Breton expects the end of the iZEV program to disrupt that.
“Sales will go down in the first quarter [of 2025], at least, and then we’ll see what happens afterwards.”
The Liberal government’s ultimate aim is to have all new cars sold to be electric by 2035. In a news conference on the iZEV program pause this week, industry groups called for this mandate to be dropped.
Brian Kingston, president of the Canadian Vehicle Manufacturers Association, said “there is no pathway to 100 per cent zero emission vehicle sales in the next 10 years with the supports being provided.”
There’s a lot of uncertainty for electric vehicles ahead. A revived rebate can’t happen soon, given that Parliament’s prorogation means no new money matters can be decided. If there’s an election call, there’s no guarantee the next government will continue the rebate.
More immediately, U.S. president-elect Donald Trump has signalled he’ll cancel the U.S. electric vehicle mandate and tax credits. Breton says these subsidies are part of an electric future, but that they do eventually have to go away.
“We need to make sure that the decline is gradual, so people can adjust,” he said. “What we need is predictable policies and programs, so [the federal government’s recent announcement] was actually the exact opposite.”
