In the United States, EV registrations made up 1.8 per cent of overall new-vehicle sales in 2020, according to analysis firm IHS Markit. The most recent figures from Statistics Canada show EVs accounted for 3.7 per cent of the overall market in the third quarter of 2020.
The Saskatchewan government’s budget document indicates the number of EVs is low — about 400 registered, according to Saskatchewan Government Insurance — but growing.
“These vehicles contribute to wear and tear on provincial roadways, but because they do not consume traditional fuels they are not contributing to highway maintenance through the provincial Fuel Tax,” the budget document said.
Finance Ministry spokesman Jeff Welke noted 18 U.S. states impose a charge on EVs to cover foregone fuel taxes. The Saskatchewan government was not aware of other provinces looking at a surcharge, “but it would not surprise our government if others are considering these types of fees,” Welke said via email.
EV TAX ‘A BIT PREMATURE’
Not British Columbia, where ZEVs accounted for 9.4 per cent of new-vehicle registrations last year, according to provincial government statistics.
“We’re focused on the adoption of EVs,” said Bruce Ralston, minister of energy, mines and low carbon innovation, responsible for B.C.’s EV incentive programs.
“We have no plans to impose a tax like Saskatchewan ... I’ve not heard any discussion internally at all.”
New EV taxes are “a little bit premature,” he said.
While Minnesota Sen. Howe’s proposal to increase and expand the EV surcharge will proceed to a vote, his EV recharging tax proposal did not get a committee hearing — effectively killing it. But it did spur discussion among stakeholders such as utilities, EV advocates and other government agencies, he said.
“I think it’s going to merit some good outcomes as it continues,” Howe said.
In Canada, federal and provincial fuel taxes make up slightly less than one per cent of gross domestic product, largely stable or declining slightly for the last 50 years, according to the Canadian Tax Foundation’s Finances of the Nation website.
A more dramatic decline is forecast with lifestyle changes, growing adoption of electric vehicles and more aggressive government climate-change policies, economist Harry Kitchen said in a 2019 report for an Ontario road-construction industry group.
The average amount of total federal and provincial tax per litre of fuel in Canada is about 42 cents, according to the Canadian Fuels Association website.
‘REALLY UNHELPFUL POLICY’
Those with a stake in EV growth were critical of Saskatchewan’s move.
“This is really unhelpful policy as [industry], and most governments, are trying to build EV penetration,” said David Adams, head of the Global Automakers of Canada, which represents the interests of import brands in Canada.
“The industry is bringing 120 electric vehicles to market in the coming years,” added the CVMA’s Kingston. “A tax is very counterproductive. I’m very discouraged by it.”
It runs against the Canadian trend of encouraging EV adoption, Michael Bettencourt, spokesman for the Electric Vehicle Society, said in an email. The health, environmental and economic benefits of EVs more than outweigh those of a $150 tax, he said.
He is not alone.
“We understand the need for funding to make road repairs but are opposed to these proposals as we do not believe they are efficient or effective mechanisms to collect revenue,” said Suzanne Goldberg, public policy director at ChargePoint, which operates thousands of charging stations in North America and Europe.
But other stakeholders recognize a discussion must eventually take place.
“I think there will have to be some sort of rethinking about how we collect that sort of revenue to pay for things,” said Michael Powell, vice-president of government relations at the Canadian Electricity Association, representing 40 major utilities.