The federal government’s three-year, $300-million electric-vehicle purchases incentive program will go into effect May 1, with rebates of up to $5,000 for consumers and $55,000 for small businesses, Economic Development Minister Navdeep Bains said Wednesday. However, details about how the discount is reimbursed — and to whom — remain unknown until the end of April.
The program’s official name is the Incentives for the Zero-Emission Vehicles (iZEV) Program. It was first announced in the federal budget in March and covers battery electric, plug-in hybrid and hydrogen fuel-cell vehicles and is part of the government’s commitment to zero-emission vehicle strategy by 2040.
Bains outlined the program in North York, Ont., at the Plug’n Drive Electric Vehicle Discovery Centre.
To be eligible for incentives, a vehicle must have a base-model manufacturer's suggested retail price of less than $45,000 for passenger vehicles with six or fewer seats and less than $55,000 for vehicles with seven or more seats. For eligible vehicles with six or fewer seats, higher-priced versions with more expensive trims are eligible as long as the final manufacturer's suggested retail price is $55,000 or less.
The program will offer a $5,000 incentive for the purchase of EVs, longer-range PHEVs and hydrogen fuel-cell vehicles and will be stacked upon the provincial rebates offered by Quebec and British Columbia. Ontario cancelled its rebate program last September.
Customers who purchase or lease a shorter-range PHEV will receive an incentive of $2,500.
Plug-in hybrid vehicles with a battery capacity of at least 15 kWh can accommodate a trip of 50 kilometres or more on a single charge, the government estimates. For the purpose of the iZEV program, those kinds of vehicles are defined as long-range. Conversely, vehicles with lower battery capacity are defined as short-range.
Only purchases or leases of eligible zero-emission vehicles on or after May 1 will qualify for the incentive program. But the federal government says on its website that further details on how the money is reimbursed or discounted “will be available on our website by April 30, 2019.”
This will help consumers who have been waiting to make a purchase,” Stephen Beatty, vice-president of Toyota Canada Inc., said in a statement.
An entire list of eligible vehicles is on the government’s website. Consumers can also call 1-800-0-Canada (1-800-622-6232) for more details.
STACKED ON PROVINCIAL REBATES
The incentives will be stacked upon the provincial rebates offered by Quebec ($8,000) and British Columbia ($5,000)
Bains said small businesses can write off up to $55,000 per year for zero-emission vehicles.
“This is really a reflection of our plan to reduce greenhouse gas emissions, but do it in an area where there are tremendous opportunities,” he said. “Transportation represents 25 percent of the emissions we have in our economy, so how do we all collectively work to reduce that? Today’s rebate helps. It is a step in that direction and it’s part of our overall strategy to reduce greenhouse gas emissions and provide consumers with better choices.”
Bains said part of the government’s strategy is to target consumer awareness.
“There’s a lot of concerns that people have about the technology…and a lot of those concerns are being dealt with,” he said. “The technology is proven and, more importantly, there is a lot of choice for consumers.”
The move by the federal government is directly opposed to the strategy by the Ontario Progressive Conservative Party’s decision to eliminate rebates of up to $14,000 last September for the purchase of EVs and infrastructures to support it.
“It’s unfortunate the province has backed away from those infrastructures and the rebate as well,” he said. “We’ve seen since they eliminated the rebate program a decline of 50 percent in sales of zero-emission vehicles in Ontario. So clearly that was a wrong-ended move and we firmly believe that we need to step in. We believe this rebate will help again improve the sales of zero-emission vehicles in Ontario, which will again help the technology advance in a timelier manner but also create consumer awareness and reduce our greenhouse gases.”
The Progressive Conservatives say they are helping in other ways.
"The best way we can strengthen Ontario’s auto industry is to continue cutting red tape, fighting against the federal government’s carbon tax, and reducing business costs ― and that’s exactly what we’re doing," a statement from Economic Minister Todd Smith's office read. "Our plan for the auto sector, Driving Prosperity, works to safeguard the good jobs in the auto sector today, while investing in the skills and technology essential to remain competitive for tomorrow."
Bains said there is no connection between the cancellation of the program in Ontario and the implementation of this program.
“This was our strategy from day one,” he said.
Bains said the program will support the education of EVs and partner will organizations such as Plug’n Drive, one of the only experiential learning facility in the world dedicated to electric cars.
Cara Clairman, Founder and Chief Executive Officer of Plug’n Drive,
said the move by the federal government could inspire sales for consumers who are currently sitting on the fence about whether to purchase an EV.
REBATE ‘INSPIRES’ BUYERS
“Our research shows the No. 1 barrier (to buying an EV) is price,” Clairman said. “People think these are too expensive and they can’t afford them, mostly because they don’t know how much they will cost. People who are hesitating will say ‘I can get $5,000, I’m going to do it.’ It inspires people to go ahead and do it.”
Canadian EV analyst Matthew Klippenstein said the federal program will help make zero-emission vehicles more affordable for Canadians.
“There will be a step up,” he said. “The fact it is being grouped out all at once is fantastic because it gives the policy certainty. It’s not like everyone buys the first part of the year and waits to the next calendar year for incentives. I think that was very well structured.”
He said the program will benefit the Chrysler Pacifica. Klippenstein said it was “probably important for the government to make sure” the Canada-made Pacifica wasn’t left off the list.
“That’s why there is a higher threshold for six-plus seat vehicles. That allows the Pacifica to qualify,” he said. “If other manufacturers come out with those they will qualify during this term as well.”
Greg Layson contributed to this report.
