The governing Ontario Liberals risk reneging on two key promises they made to help increase the number of electric vehicles sold in the province unless the items are part of the 2018 budget to be released Wednesday.
Ontario’s 2016 Climate Change Action Plan calls for the HST to be removed on all zero-emissions vehicles sold in the province. It also promised a “cash-for-clunkers” rebate to low- and moderate-income households that will help them replace old cars with new or used EVs or plug-in hybrids.
Both pieces of policy were to take effect by 2018, according to the action plan. However, a provincial election is scheduled for June 7, and neither measure has been implemented.
“The Government of Ontario intends to continue moving forward with the Climate Change Action Plan. As mentioned, it’s a five-year plan and identifies a timetable for the initiatives you asked about,” Ministry of Environment and Climate Change spokesman Gary Wheeler wrote in an email to Automotive News Canada.
If the two new rebates were to take effect, they would likely have to be part of Wednesday’s budget and not contingent on the Liberals winning the election. Several recent polls suggest the Progressive Conservatives will form the next government come June.
If that happens, the HST rebate might be more difficult to implement because it hinged on help from the governing federal Liberal party.
“Ontario will work with the federal government to explore ways to provide full-HST relief to purchasers of new battery electric vehicles, with the objective of introducing this relief by 2018,” the Ontario Climate Change Action reads.
Wheeler said that “We continue to work with the federal government to achieve the goal of providing HST relief to purchasers of new battery electric vehicles.”
Meanwhile, the federal government is currently writing its own national ZEV policy, and the idea of eliminating the tax has been floated at the national level of government. In the meantime, it’s possible the province could eliminate its own portion of the HST — eight per cent — from the purchase of new ZEVs. The province already removes its own eight per cent tax from home electricity bills, for example.
“Its unfortunate the Ontario Government [hasn’t eliminated] the HST from electric vehicle sales,” Trillium Automobile Dealers Association spokesman Frank Notte said in an email toAutomotive News Canada. “With the provincial budget coming soon, we hope to see that commitment be a central component in Budget 2018.”
The association represents more than 1,000 auto dealers in Ontario.
David Adams, president of the Global Automakers of Canada said his association supports both ideas.
“Eliminating the HST from these vehicles makes good sense,” he said. “In part of our dialogue with the provincial government, we’ve advocated for the removal of the provincial component of the HST.
The other rebate still in limbo would allow low- and moderate-income households — terms that are not defined in the climate plan — a rebate of up to $20,000 help them replace old cars with new or used EVs or a plug-in hybrid.
“The reality is most people are driving clunkers not because they want to but because they can’t afford a new vehicle, even with a significant discount,” Adams said. “That’s the other reality; EVs are still expensive even with incentives on them.
“That one might be a little more esoteric.”
TADA badly wants that one in the budget and has been pushing for it for years.
“Ontario’s new car dealers have been advocating a “cash for clunkers” system since 2015,” Notte said. “Such a program will provide immediate greenhouse gas reductions and help the province meet its goal of having five per cent of vehicles on the road be electric or hybrid.
“Real world success stories from the U.S. and B.C.’s SCRAP-IT Program show the environment value of such a program.”
The Car Allowance Rebate System that launched in the United States in 2009 gave consumers up to $4,500 each to trade in an old gas-guzzler for a more fuel-efficient new model.
The rebated created a frenzy on showroom floors. Nearly 700,000 vehicles were traded in through the Car Allowance Rebate System. The seasonally adjusted annual sales rate climbed to 11.4 million in July 2009 -- topping 10 million for the first time that year -- only to be blown away by August's 14.6 million SAAR.
