“Electric vehicles (EVs) are being purchased in ever increasing numbers across Canada” so the tax is required to offset losses as people convert to electric vehicles.
“While the number of these vehicles in Saskatchewan is currently relatively low, they are increasing in number every year,” the budget reads. “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.”
Revenue from the tax will ensure “that this and all other road-use Fuel Tax revenues are dedicated to provincial highway maintenance,” the province said.
The Saskatchewan Government Insurance said there are just 403 registered electric vehicles.
Between May 2019 and February 2021, about 200 vehicles that qualify for the federal iZEV incentive program were put on the road in Saskatchewan, according to Adams.
“The tax, if applied to those vehicles, would have generated less than $30,000 towards their road maintenance budget of $616 million. Really?” he said.
While the tax will only apply to passenger vehicles, the government said it will continue to examine expanding the tax to commercial vehicles and interjurisdictional trucking. The government also said it will consider options to apply a tax at charging stations.
Brian Kingston, head of the CVMA, said now is not the time for a tax he labelled discouraging.
“The industry is bringing 120 electric vehicles to market in the coming years. A tax is very counterproductive. I’m very discouraged by it,” he said. “We need a suite of consumer incentives.”
He said the tax doesn’t appear to be “a significant revenue generator.”
With fewer than four per cent of vehicles nationwide being of the zero-emissions kind, Kingston said it’s “simply too early” to introduce a tax on EVs.
“We’ve yet to hit [an] inflection point where you see widespread adoption,” he said.
When adoption hits 40-70 per cent, “there has to be a discussion to offset revenue from the gas tax.”
In the short term, governments be supporting EV adoption and address the concerns down the road, he said.