Ontario Premier Doug Ford's decision to cancel rebates for electric vehicles in the province is expected to have a negative effect on sales.
Ontario cancelled the cap and trade program on July 3 as part of its commitment to lower gas prices down by 10 cents a litre. Given the Electric and Hydrogen Vehicle Incentive Program was funded through cap-and-trade proceeds, it was officially cancelled July 11.
David Adams, president of the Global Automakers of Canada industry association, said Friday that experience elsewhere shows that sales of electric vehicles take a hit when subsidies are removed, such as when British Columbia stopped — and then restarted — its program.
"When they cancelled it, sales went down dramatically, and then when they reinstated it sales went back up again. That is the same pattern that we've seen in other jurisdictions internationally," he said.
Customers generally look for some kind of assistance in overcoming the extra cost of electric vehicles, Adams said.
"The reality is that without some kind of incentive in place to bridge that price differential between a regular internal combustion engine vehicle and the more expensive electric or hydrogen vehicles, consumers just don't purchase them in the same numbers."
The Ontario program offered up to $14,000 back for buyers, but the new Ford government cancelled the rebate this week along with the cap-and-trade program that helped fund it as part of wider cost-cutting measures.
Under cap-and-trade, the biggest-polluting companies had to buy permits if they exceed provincially set limits on greenhouse gas emissions. The province also added 4.3 cents per litre to gasoline tax under the program. The previous Liberal government had expected to collect $1.9 billion annually from the program.
The government will still allow new dealer stock to be remain eligible for the incentives if the vehicles were ordered by July 11 and sold by Sept. 10.
According to data compiled by FleetCarma, a Waterloo-based fleet management company that supports and tracks EV adoption, 7,477 battery and plug-in hybrid electric vehicles were sold in Ontario last year.
The sales were an increase of 120 per cent from 2016, when increased rebates were implemented.
The Ontario government has also cancelled an incentive program for electric vehicle charging stations that offered up to $1,000 to offset the cost of a home or office station.
B.C. and Quebec, where sales were estimated at 3,270 and 7,194 respectively in 2017, still have incentives in place. Quebec also has in place a mandate for 10 per cent of new vehicles sales to be zero emissions by 2025.
Overall vehicle sales in Canada grew 4.8 per cent to a record 2.08 million last year. By December, electric vehicles accounted for 1.4 per cent of all sales.
There were nearly 48,000 electric vehicles on Canada's roads last year, up from 29,000 in 2016.