The Ontario Government says it has no intentions of reinstituting rebates for electric vehicles, even though it recently committed $285 million toward Ford Motor Co.’s $1.8-billion plan to turn its Oakville, Ont., plant into an EV assembler, Automotive News Canada has learned.
Asked whether the government’s contribution would bring back the rebate program it cancelled in September, 2018, a spokesperson for Premier Doug Ford said: “We will continue to put forward sensible solutions that encourages all Ontarians to take meaningful action to protect and preserve our environment while making sure that taxpayers’ money isn’t being used to help those who don’t need it.”
The $295 million matched the amount contributed by the federal Liberal government in early October for the Oakville plant, which is slated to produce EVs by 2026.
The Liberals announced in its Fall Economic Report in December plans to add $287 million in rebates for EVs from 2021-2022. The funds from the three-year $300 million EV rebate program announced in May, 2019 had been almost exhausted as of the fall of 2020, prompting the need to top up the program. It offers up to $5,000 in rebates for six-passenger cars retailing for under $45,000, seven-passenger seats or more selling for under $55,000.
In 2016, Ontario’s then-Liberal government introduced a program for the province offering up to $14,000 in rebates. The program was scrapped three months after Doug Ford’s Conservative party won a majority government in 2018 majority. At the time Ford said rebates shouldn’t be used to benefit consumers who could already afford the vehicles. Sales of EVs dropped by 55 per cent by the end of 2018 without the rebate.
The federal government, meanwhile, wants EVs to account for 10 per cent of all sales by 2025. Transport Canada recently said that at the current trajectory, EV sales would make up only five to six per cent of the market by 2025.
Aaron Wudrick, federal director of the Canadian Taxpayers Federation, told the Standing Committee on Environment and Sustainable Development in November that the federal rebate plan was a “well intentioned but ultimately wasteful program” because it was being used by consumers who are “fully prepared” to pay full price for them.
He said Tesla has benefitted the most from the program, noting that when the Model 3 did not qualify for the subsidy because the base model was priced at $53,700, the manufacturer introduced a Canada-only version called the Standard Range priced at $44,999.
“Presumably the purpose of having a cutoff price was set to precisely avoid having these subsidies go to more expensive vehicles, and that’s precisely what happened here,” Wudrick said.
He said at the very least the Ottawa should have a much lower price ceiling, which will ensure that it is not subsidizing expensive vehicles.
Daniel Breton, CEO of Electric Mobility Canada, a national membership-based non-for-profit dedicated to the advancement of e-mobility, said rebates are critical to boosting sales.
After British Columbia dropped its rebates in 2014 because the program ran out of money, sales decreased. They rose again when the program was re-introduced a year later.
“To say that the only people who buy electric cars are the ones who would have bought them anyway…that data [in B.C. and Quebec] proves that it’s wrong and it’s false,” Breton said.
He added that unless more provinces follow B.C. and Quebec, Ottawa will not be able to reach its target of the elimination of internal combustion engine vehicles by 2040.
Cara Clairman, CEO of Plug’n Drive, a non-profit organization based in Ontario that is committed to accelerating EV adoption, said there are other ways to advance electric vehicles.
More advantageous financing rates and improving EV infrastructure are among the things that could boost sales, she said.