Canada announces new $5,000 EV incentive – but no Teslas need apply

Canada (Nicolas Raymond)

The Canadian government has released a new budget that includes a $5,000 incentive for EV purchases (the provinces of Quebec and British Columbia already offer incentive programs, and so did Ontario, until a recently elected provincial government cancelled them). However, the price of eligible vehicles is limited to $45,000, which excludes all currently available Tesla models.

The proposed budget reads (as reported by Electrek): “To encourage more Canadians to buy zero-emission vehicles, Budget 2019 proposes to provide $300 million over three years, starting in 2019-20, to Transport Canada to introduce a new federal purchase incentive of up to $5,000 for electric battery or hydrogen fuel cell vehicles with a manufacturer’s suggested retail price of less than $45,000. Program details to follow.”

The proposal would also make EVs “eligible for a full tax write-off in the year they are put in use,” a measure designed to encourage commercial fleet operators to hasten the transition to zero-emission vehicles. The budget also includes new EVSE investment of $130 million over five years, as well as a program to encourage automakers to meet “voluntary zero-emission vehicle sales targets.”

As Electrek and many others have noted, purchase incentives are a blunt instrument – a carbon tax would be a much more efficient way to reduce emissions, and would allow the market to decide on the best ways to do so. Furthermore, the wisdom of the price limit is highly doubtful (Tesla recently played a round of cat-and-mouse with the German government over this issue). The self-evident argument that Tesla buyers don’t need tax breaks misses the point. Purchase incentives don’t just reward people who buy EVs – they also encourage automakers to build them. And, whereas middle-income buyers may see a LEAF as an alternative to a fuel-efficient Camry or Accord, high earners are more likely to be weighing a Tesla against a carbon-spewing BMW or Mercedes SUV.

Be that as it may, political realities are much the same in Canada as in the US: politicians (and most voters) shun anything that’s called a tax, but usually welcome anything that’s called a tax break. And the evidence from around the world is clear: purchase incentives do tend to increase EV sales. So, we’ll take it, eh?


Sources: Electrek, Engadget


  • Lance Pickup

    Seems like an awfully convenient price point to cut off the tax credit it. Would be a bit easier to swallow if it were a phase out rather than a set price where it drops from $5000 to $0 in the span of one dollar.

    • Joe Jackson

      Totally agree – taper it off from $40k to $45k to encourage production of cheaper ev’s for the masses. Rich men’s toys don’t need subsidies.

  • bob

    The 45 grand cuts off the Model 3 but also many of the longer range EVs from other manufacturers. The new Hyundai Kona EV is just above that price point, if they are only looking at base list price. The base for a Chevy Bolt is $48,200. Mighty close to the cut off. It does look like they wanted to avoid the Tesla question, as a base Model 3 is just above that price. But what about hydrogen? They wanted to also encourage these cars but is there one at that price. They may be cutting Tesla out of the equation but are they also doing that to hydrogen. 50 grand would add many more mid to longer range cars that could be a single car families set of wheels. Since we don’t know what price they are looking at on the car sticker, I have another concern. If it;s after add -ons, will people forgo safety items (i.e. cross traffic warning) to get the rebate. All questions not answered yet.

  • mipak

    It’s too bad Utah offers none. And not surprisingly it has some of the world’s worst air pollution problems in SLC. Haze? Temp inversions? No! That ugly brown cloud seen most days in SLC is strictly ugly smelly thick pollution caused by a coal industry in cahoots with Utah legislator’s to keep coal, oil and natural gas burning and burning and burning until everyone’s eye’s hurt like the dickens and people are dying of asthma attacks, etc. A state that seems completely out of touch with reality and refusal to build wind and solar installations and grant incentives for EV’s. What a backward’s state. Even worse than Wyoming. RMP is a lot of the reason with it’s management touting things it’s doing for a clean state. What a joke. I can just see this state in a couple hundred years when all the beautiful canyons are turned grey from constant pollution attacking them–acid rain and more.

    What’s a bigger joke is that Americans think Utah is one of the healthiest states (ranked #2) but that’s only true for those living in small cities–not for SLC residents who breathe in all that filthy air.

  • Richard electromobiliste

    The price cap was well researched by elite economist paid by the petroleum cartel, to be least effective possible, and create the most confusion .
    Furthermore no mesures to force dealership to have them in stock, so availability.

  • Lexcyn

    Correction: Ontario does *not* offer an incentive program. This article is a sensationalist piece and has a click bait title. News flash, this also doesn’t include any vehicles over $45k not just Tesla.