Car Buying

A look at the credits still available for electric vehicles in Canada

By: Lisa Coxon on April 30, 2019

If you’re in the market for an electric or hybrid vehicle, what you can expect to spend really runs the gamut. You can go small (literally) and spend around $29,000 for a smart fortwo electric, or you can go big and spend about $156,000 for a premium hybrid Karma Revero. Thanks to some attractive government incentives, the decision to buy an electric vehicle has been a no-brainer for some.

That said, EV incentives in Canada have continuously changed over the past decade. In Ontario, for instance, they were first introduced in 2010 under then-premier Dalton McGuinty, revised and increased under Kathleen Wynne’s government in 2016, and then altogether scrapped in 2018 less than a month after Doug Ford was voted into power.

Here’s what we know about what’s left of EV incentives and what’s to come.
 

What’s changed

On July 3, 2018, shortly after Ford became Ontario’s premier, his government cancelled the provincial cap and trade program, effectively dissolving the EV incentive program in the province that had been in place for the past eight years.

Following their most recent facelift, those incentives were attractive, too, ranging from $5,000 all the way up to $14,000 for the purchase of a new electric or hybrid vehicle. Ford promised Ontarians who had bought electric and hybrid vehicles prior to his taking office that the rebate would still be honoured during a grace period. But in March, CBC News reported that several EV owners were being denied a $14,000 rebate because their dealerships failed to add their vehicle models to a government list that the dealerships claim they didn’t even know existed.

Like that list, the future of EV incentives in Canada has been a bit of a mystery. After Ontario nixed them, it was up to the federal government to pick the baton up. In its 2019 federal budget, it introduced a $5,000 rebate for the purchase of an electric or hydrogen vehicle under $45,000 that takes effect May 1. And, according to CTV News Ottawa, the Liberals are raising the vehicle price cap to $55,000. The federal government will hand over the reigns to Transport Canada to administer the incentive program, which will receive some $300 million over the course of three years to do so.

The federal government’s interest in EV incentives “really came out of the blue,” said Andrew Bell, director of the Electric Vehicle Association of Alberta (EVAA), in an email. The rebate should help provide “a nudge” for Canadians to buy more EVs, he says, but it may not go far enough.

“The lifetime cost of an EV is much lower than a gas car over a 20-year period, but the initial upfront cost is about $10-20,000 higher. A $5,000 rebate seems to meet the potential buyer halfway.”

But the EVAA isn’t 100% certain how the federal government came up with its rebate conditions. “We would like to have seen such programs initiated a long time ago and with more aggressive rebates and incentives,” says Bell. “But we support any initiative by the federal government to help Canadians drive electric.”
 

What’s left

“Incentive programs have really dried up,” says Dani Ierullo, director of proposal development at Precise ParkLink, an urban mobility solutions provider based in Toronto. One segment of ParkLink’s business involves selling electric vehicle charging stations to the commercial, residential and healthcare sectors.

Aside from the federal rebate, British Columbia and Quebec remain the only provinces in Canada with any provincial EV incentives.

British Columbia recently introduced legislation that will require all vehicles sold in the province to be emissions-free by 2040. And one way to make that happen, the province said, is by providing rebates.

The Clean Energy Vehicles for British Columbia (CEVforBC) program offers a rebate of up to $5,000 for new electric vehicles less than $77,000. (Owners of hydrogen fuel cell vehicles, which uses a fuel cell instead of a battery to power the vehicle, get $6,000). The rebate is applied at the time of purchase, meaning the dealership must mark down the price of eligible vehicles. CEVforBC runs until March 31, 2010, or until the funds run out — whichever comes first.

Alberta’s approach to EVs and EV incentives seems to be propelled by cautious optimism

There’s also the SCRAP-IT Program, which provides up to $6,000 for drivers who scrap an old gas-fuelled vehicle and replace it with a new or used electric vehicle and $3,000 when you buy a used one. Combined with the $5,000 federal incentive, B.C. drivers could see up to $16,000 in rebates.

Lastly, there’s the Specialty-Use Vehicle Incentive Program (SUVI Program), which provides a rebate of up to $50,000, depending on the vehicle type. The rebate applies only to specialty-use vehicles (including motorcycles and low-speed electric vehicles), that aren’t already part of the CEVforBC incentive. The SUVI Program is available to individuals, as well as public and private fleets.

Not all Western provinces are as incentive-happy as B.C.

Alberta has demonstrated no major plans to introduce EV credits, though it has slowly started to implement the infrastructure needed for electric vehicles.

“Alberta’s approach to EVs and EV incentives seems to be propelled by cautious optimism,” says Bell. “...in the form of installation of charging stations in central and southern Alberta.”

On the eastern side of the country, in Quebec, there’s the Drive Electric Program, which sees drivers get up to $8,000 back for new EVs under $75,000. This program is valid until December 31, 2020, or until funds are gone.

Quebec also has a home charging station rebate, where the provincial government will offer $350 for purchase of a level 2 residential charging station and $250 for its installation and electrical supply infrastructure by a licensed electrician, for a total of $600. Certain cities within Quebec will offer additional compensation for people who buy and install residential EV charging stations (e.g. Sherbrooke = $500; Joliette = 25% of total cost up to $250; Prevost = $100).
 

What exists in other countries

Electric and hybrid vehicle incentives work a little differently on the other side of the pond.

In many European countries, for instance, electric vehicle owners are eligible for discounts on auto-related taxes, like the vehicle registration tax, ownership tax, company car tax, annual circulation tax, and road tax. In some countries, EV owners are exempt from inspection fees as well.

South of the border, the United States federal government generally rewards electric and hybrid vehicle owners with tax credits, ranging from $2,500 to $7,500 for a new EV purchase. Most individual states also have their own incentives.

Bell points to Norway and China as being some of the most progressive countries in terms of electric vehicle incentives and adoption. In fact, Norway broke a world record last year when almost a third of all vehicles sold in the country were electric. EV drivers in Norway benefit from significant tax exemptions as well as free parking and charging. As of 2017, Norway boasted a 39% share of the EV market in Europe.

But, says Bell, China reigns king when it comes to EV adoption.

“Canada is far down that list.”
 

What the future holds

“Here’s the interesting thing,” says Ierullo. “There’s no workplace incentive program. Yet, we still see a regular flow of requests for EV chargers, which means there's still a demand on the infrastructure side, which means there’s a demand on the user side as well.”

The problem is that EV charging infrastructure is lacking in Canada. “That’s where the bottleneck is right now,” says Ierullo. “The number of stations.”

It’s promising, then, that a group of regional partners in Alberta — a province where EV infrastructure is “fledgling,” Bell says — just launched the $2-million Peaks to Prairies project, which will see 20 fast charging and 20 level 2 charging stations installed in the southern part of the province by the end of 2019.

New building codes should also continue to drive up demand for property owners to purchase EV chargers, especially in condominiums. “As soon as you ribbon cut for a condo, right away there’d be a set percentage of parking stalls that have EV charging stations,” says Ierullo. “If more needed to be added, the building has to be ready and built in such a way that it can add these additional stations.”

Attractive EV incentives could surely help fill those stalls but, says Ierullo, “you also need incentives for business owners to buy the units — and those programs are hurting a lot, too.”

An incentive isn’t going to have a large car manufacturer retool their projections for EV sales in 2025. . . these things are going to happen regardless

In January of 2018, the Ontario provincial government introduced the Workplace Electric Vehicle Charging Incentive Program (WEVCIP), a grant that businesses could apply for to offset the cost of purchasing and installing EV charging stations for its employees. Depending on the number of employee parking spaces, businesses could get up to $30,000. But the grant had a cap on it. So once the money ran out, applications were no longer accepted.

While the WEVCIP was in place, though, Ierullo actually saw an uptick in the number of pricing requests and official tenders for electric vehicle charging stations. “These companies were gonna buy EV charging stations anyway,” he says. “The incentive just meant they bought them sooner.” Even without the grant, Ierullo is still seeing a consistent flow of requests and tenders for EV charging stations. In the course of a year, he might respond to 50; two or three years ago, it was only a handful.

Jane Collins, account executive for Eastern Canada at ChargePoint, an electric vehicle charging  distributor, says that the appetite for EVs is alive and well. “There has been a drastic increase in the number of EVs on the road in Ontario over the last three years,” she said via email. “More and more aggressive commitments are announced by manufacturers all the time.”

EV incentives might fizzle out, but as long as the infrastructure is there, EVs shouldn’t.

“An incentive isn’t going to have a large car manufacturer retool their projections for EV sales in 2025,” says Ierullo. “There’s a certain point in time in the next, say, five to 10 years where over half of the cars that are going to be sold are going to be EVs. These incentive programs are great but in time these things are going to happen regardless. That’s just where the world is going right now.”

But for the world to get there, a clear vision for mass EV adoption needs to be in place — one that doesn’t waiver with each new election cycle.

“There needs to be consistency with EV incentives to foster a bold uptake towards EVs,” says Bell. “As the uptake of EVs gains momentum, technological advancements will be made in due course and prices will fall for mass adoption to the point where EV incentives are no longer needed.”

 

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