If you’re considering buying a new car, you might just be thinking of going fossil-fuel-free (or fossil-fuel-optional, in the case of hybrid vehicles) for your next purchase. While the cost of an EV is still relatively higher than their gas-powered counterparts, thanks to some attractive government incentives, the decision to buy an electric vehicle has significantly sweetened the deal.
That said, EV incentives in Canada have continuously changed over the past decade, both at the federal level and provincially.
What is the federal EV rebate?
Currently, the government offers a $5,000 rebate for the purchase of an electric or hydrogen vehicle with a base price under $55,000 (though higher-priced trims under $65,000 will also qualify).
In December 2023, the Federal government also announced a new Electric Vehicle Availability Standard, which will target 100% zero-emission vehicle (ZEV) sales by 2035. While the new mandate doesn’t hint at any new rebates, it aims to open up more vehicle availability in Canada, giving consumers a wider range of options while also reducing wait times for popular models.
It will also bolster the charging network, with investments to build 84,500 chargers by the end of the decade.
Which provinces offer EV rebates?
Provinces also offer rebates that can be used in conjunction with the federal rebates. However, not all of them offer rebates, and these rebates often depend on the provincial governments in power.
Perhaps unsurprisingly, the Energy Province does not have its own EV rebate. In fact, when the Electric Vehicle Availability Standard was announced by the Feds, Alberta Premier Danielle Smith pushed back, confirming she had “eight legal actions lined up” to stop the EV mandates in her province. Instead, she is in favour of expanding hydrogen fuel cell cars, another type of zero-emissions vehicle.
Currently, BC offers rebates of up to $4,000 for battery electric vehicles (BEVs) and up to $2,000 for plug-in hybrid electric vehicles (PHEVs) for cars up to $55,000 MSRP. In addition to the vehicle rebates, the BC government also offers a rebate of up to 50% of the cost of installing a home charging station, up to $350.
In addition to these rebates, BC has a ZEV mandate in place, which incentivizes automakers to sell more EVs in the province. As a result, BC is way ahead of other provinces in EV sales — over 21% of new cars sold in the province are electric.
As of writing, Manitoba does not have its own provincial rebate for EVs. However, if all goes to plan, this is poised to change. In October 2023, the NDP swept into power, ending the PC government’s eight-year reign over the province. Their campaign platform heavily emphasized the need to build up EV infrastructure, including providing a $4,000 rebate for new EVs (both BEVs and PHEVs) and $2,500 for used ones.
Newfoundland and Labrador
Newfoundland and Labrador offers a rebate of $2,500 on BEVs and $1,500 on PHEVs, new or used (as long as the vehicle has not received a rebate previously).
Nova Scotia has its own provincial rebate of up to $3,000 on new BEVs and long-range PHEVs; and $2,000 on new short-range PHEVs. They also offer $2,000 for used BEVs up to $55,000 and $1,000 for used PHEVs under $40,000.
The Northwest Territories has the most generous territorial and provincial EV rebate program in Canada, offering a rebate of $7,500 for both BEVs and PHEVs, and 100% of the purchase price and installation of a level 2 charging station for home use up to $500.
That means that a driver could potentially qualify for up to $13,000 in federal and provincial rebates for the purchase of a new EV and charger.
Nunavut currently does not have its own EV rebate.
Leading up to the 2018 elections in Ontario, under the leadership of then-premier Dalton McGinty, offered a generous rebate for EV, ranging from $5,000 to $14,000.
However, when Doug Ford was elected, his government swiftly 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. Since then, Ontario has not had its own provincial EV rebate program.
Prince Edward Island
EV buyers in PEI can qualify for a $5,000 provincial rebate for new or used BEV, or a $2,500 rebate for a new or used PHEV. In addition, Islanders can also get a rebate of $750 towards the purchase and installation of a level 2 charger at home, or towards charging costs if a home charger is not possible.
Quebec, much like BC, is a ZEV-mandated province, which makes sure automakers hit a minimum target of EVs sold in the province. As a result, 12% of new vehicles sold in 2022 in Quebec were either fully electric or hybrid electric.
La belle province also offers a generous rebate program – drivers can qualify for a rebate of $7,000 for a new BEV, or up to $5,00 for a PHEV. They can also get up to $600 to install a home charging station.
There is no provincial rebate program for EVs in Saskatchewan.
Yukon offers a territorial rebate of $5,000 for new BEVs and long-range PHEVs; and $3,00 for short-range PHEVs.
Related: How are electric vehicles insured?
How are other countries doing it?
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. In addition to rebates, 13 states, including California, New York, Washington and others, have ZEV mandates.
But when it comes to widespread adoption of EVs, Norway is a leader in terms of electric vehicle incentives and adoption. Remarkably, 87% of new car sales in Norway are fully electric.
Canada still has a long way to go before leading the charge towards EV adoption. EV rebates are still contingent on provincial priorities, and our vast landscapes present a challenge for the still-limited range of EVs and PHEVs. Plus, many car-buyers are unable to get their hands on the EVs they want in provinces without ZEV mandates.
However, with the new federal mandate underway, and EV tech getting more sophisticated with each subsequent model, the tide may be turning. And if you are in the market for an EV, it’s never too early to compare costs and start shopping around.