Electric vehicle users, advocates say new levy feels ‘punitive’

Some electric vehicle owners in the province say they feel they’re being penalized by the Nova Scotia government’s new levy on electric and hybrid vehicles.

Details of the new levy were announced in Monday’s provincial budget. As of Oct. 1, owners of fully electric vehicles will be charged $500 when registering their vehicle for the first time or renewing registration every two years, and owners of hybrids will be charged $250.

Rhonda Frank is a small business owner who lives in Head of Chezzetcook, N.S., and has three fully electric vehicles. She said the additional $1,500 fee she’ll have to pay every two years will add up.

“It seems punitive,” Frank said. “It feels like I’m being charged a penalty just for trying to be a green business. And $1,500 may not sound like a lot, but for a micro-business, every new fee matters.”

Budget documents say the levy is intended to ensure EV owners contribute to road construction and maintenance costs. The fee is expected to raise $1.6 million in 2026-27 and $3.3 million in 2027-28, when it is fully implemented.

Frank said she doesn’t object to helping pay for roads, but believes the flat fee isn’t the right approach. She said calculating the fee based on road-wear considerations such as vehicle class or axle loads, or distance travelled, would make more sense.

She also pointed out that many hybrid users do buy gas sometimes and thereby contribute to gas taxes.

“I’m asking them for a fair, transparent approach that’s based on evidence,” Frank said.

EV driver John MacPherson echoed that sentiment.

MacPherson said he drives about 10,000 kilometres per year, and the new fee means he’ll be paying about double what he would have paid in fuel taxes using a gasoline-powered car.

“A flat $500 fee is not proportionate — especially for moderate drivers like me. There are fairer, usage-based solutions available. I’d like to know why those weren’t seriously considered,” he said.

“Many of us purchased our vehicles — new or used — believing the government supported the transition to cleaner transportation. Now we’re being hit with one of the highest EV registration fees in the country.”

Definition of ‘hybrid’ TBD

The government said there are about 5,000 fully electric and 15,000 hybrid vehicles in the province, but that the number of hybrids is based on the broadest definition, and it is possible not all of them will be subject to the levy.

The estimated $3.3 million the government expects to bring in with the levy is a drop in the bucket compared with the revenue from motive fuel taxes, which is forecast to be $297.7 million in 2026-27.

According to the Department of Public Works, it costs about $700,000 per kilometre to resurface two-lane routes and $800,000 to $1 million per kilometre for two lanes going in the same direction on 100-series highways. New twinning, which includes land acquisition, clearing and grading, costs $10 million per kilometre, the department says.

Nova Scotia’s levy on EVs comes shortly after the federal government announced incentives for buying them, including rebates of up to $5,000 for EVs and $2,500 for plug-in hybrids.

Levy won’t be deterrent for some

Kurt Sampson, the executive director of the Electric Vehicle Association of Atlantic Canada, said as gas-powered vehicles start to dwindle and EVs become more popular, a new tax system will be needed.

He said 90 to 95 per cent of the wear and tear on roads is caused by heavy trucks, but the gas tax those drivers pay does not reflect that.

Sampson said the introduction of the levy is an opportunity to have a discussion about creating a new system that’s fair for everyone.

The new levy is unlikely to change the financial equation of EV ownership for most current owners, Sampson said.

“I save $500 a month or more on gas alone, so me having to pay $500 every two years for this tax is really inconsequential,” he said.

“But for someone who might be considering an EV who doesn’t really know or have a solid grasp of the economics of EV ownership, it’s probably another deterrent. And you know, we don’t like to see that.”

Abby Lefebvre, the energy co-ordinator with the Ecology Action Centre, said she doesn’t believe the levy will be a deterrent to most people considering buying an EV, but the fee will impact some Nova Scotians who “are already pinching coins.”

“It really is still important to remember all of the good that EVs can do for our community and to not be discouraged by what’s happening,” she said.

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