In spring 2022, the Canadian federal government announced a sales mandate for zero-emission vehicles. By 2026, at least 20 per cent of new passenger vehicles sold in Canada must be zero-emission vehicles. That will increase to 60 per cent by 2030, and jump to 100 per cent by 2035. This mandate is supported by government EV incentives and rebates designed to accelerate the adoption of cleaner vehicles nationwide.
- Federal government EV incentive and rebate programs
- Provincial government incentive programs
- Combined iZEV rebates by province and territory
Federal government EV incentive and rebate programs
Since 2019 the federal government has offered a suite of EV incentives and rebates for businesses (and individuals) that are ready to make the switch to electric. Programs exist to support vehicle purchases as well as charging infrastructure installation. Provinces have also created their own programs to incentivize zero-emission vehicle sales, and these can be combined with federal incentives.
Incentives are a valuable tool to aid fleet EV adoption and they are available now. (Note that some countries, such as the UK, have ended their EV incentive and rebates programs citing their success in making EVs ubiquitous.) Here’s what you need to know to take advantage of these programs while they are available.
Zero-Emission Vehicle Program
In May 2019, the federal government launched the Incentives for Zero-Emission Vehicles (iZEV) Program. The incentive-based initiative aims to help Canadians and Canadian businesses purchase or lease zero-emission vehicles.
The federal government defines a zero-emission vehicle (ZEV) as a car that produces no tailpipe emissions. A ZEV may have an internal combustion engine; however, it must also have the ability to operate without using it — meaning that battery-electric, plug-in hybrid electric, and hydrogen fuel cell vehicles are all considered ZEVs.
Whenever a new ZEV is released by a certain manufacturer, Transport Canada will evaluate it to determine if it is rebate-eligible. All passenger cars with a base price of less than $55,000 are eligible for a rebate in one of two categories (see following list); as are all station wagons, pickup trucks, SUVs, minivans, vans and special purpose vehicles with a base price of less than $60,000.
A quick summary of the iZEV program incentives:
- Battery-electric, hydrogen fuel cell and vehicles with an electric range longer than 50km are eligible for a $5,000 incentive.
- Shorter range plug-in hybrid vehicles are eligible for up to $2,500.
- Incentives are received at the point-of-sale by a dealership.
Medium- and Heavy-Duty Zero-Emission Vehicle Support Program
In July 2022, the federal government launched a new $550 million program to help businesses and communities make the switch to larger zero-emission vehicles.
The Medium- and Heavy-Duty Zero-Emission Vehicles Program (iMHZEV) provides incentives worth roughly 50 per cent of the price difference between an electric vehicle and a combustion vehicle.
The program is applicable to larger zero-emission vehicles such as the Ford E-Transit cargo van, the Karsan e-Jest shuttle, and Volvo VNR-electric tractor truck.
In total, iMHZEV will cover up to $200,000 per vehicle, and is allowed to be combined with the provincial and territorial incentives listed below.
Limits to the iZEV and iMHZEV programs
It is important to note that individuals are limited to one incentive per calendar year, and businesses, organizations or governments can apply for a maximum of 10 incentives per year — or a total of $1,000,000, whichever limit is reached first. Visit Transport Canada for more on these limits.
Capital cost allowance write-offs
As of 2019, businesses are also eligible for an enhanced, 100 per cent tax write-off in the first year that a ZEV is purchased and used by a corporation, self-employed individual, or an employee using a vehicle for work purposes.
Write-offs are available through specific capital cost allowance classes. The CCA rate for class 54 motor vehicles and passenger vehicles is 30 per cent, while the rate for class 55 automobiles is 40 per cent. For vehicles in the class 54 category, the write-off is capped at $55,000.
Businesses may not take advantage of both methods of financial support: any business that receives an iZEV incentive will not be able to claim the enhanced first-year tax write-off for buying a ZEV. However, any remaining balance (i.e. vehicle cost above $55,000) can be written off at the usual CCA rates in subsequent years. Consult your accountant to determine which option is best for you and your business.
Act now to take advantage
The write-off system will end on January 1, 2028, and will begin to be phased out starting in 2024, while iZEV is currently scheduled to run until March 31, 2025, or until the program’s remaining funding is exhausted.
Zero-Emission Vehicle Infrastructure Program
Charging stations are a critical component of the transition to electric, for both businesses and consumers. The federal government’s Zero-Emission Vehicle Infrastructure Program (ZEVIP) helps fund the purchase and installation of charging and hydrogen refuelling stations across the country.
The program supports multiple infrastructure streams, including public places such as arenas, libraries, and restaurants, on-street charging managed by municipalities, as well as workplaces and multi-use residential buildings. Individual home chargers are not eligible for ZEVIP funding. It is also worth looking at delivery organizations, such as the Atmospheric Fund, Propulsion Québec and Plug In BC, who further distribute some of this funding.
Information on the specific type of charging infrastructure, and the value of incentives any applicant can receive is available here. The program is currently in place until 2027 and has a total budget of $680 million.
Provincial government incentive programs
In addition to the federal help, businesses can also take advantage of provincial EV incentives and rebates on vehicle purchases and charging infrastructure. For a full breakdown of the maximum vehicle rebate you can receive from your province and the federal government, see below.
There are some provinces that don’t offer any extra support. Alberta, Saskatchewan, Manitoba and Ontario do not offer provincial ZEV rebates of any kind. The Nunavut and the Northwest Territories governments also offer no added benefits — although, the Arctic Energy Alliance, a non-profit based in Yellowknife, offers NWT organizations and businesses $5,000 for a new BEV or PHEV.
While B.C. and Quebec were among the first two provinces to offer their own purchase rebates to go along with federal incentives, other provinces and territories are starting to catch up. Unless otherwise noted, the rebates apply to vehicles with a base Manufacturer’s Suggested Retail Price (MSRP) of $55,000 or less, in line with the federal program.
BC Hydro EV Fleet Program
The BC Hydro EV Fleet program provides three complementary funding options for fleets looking to plan their EV transition, to upgrade their electrical infrastructure and to mount short-term pilot projects with EVs.
EV Ready fleet plan rebate
BC Hydro will provide funding to hire an expert in fleet electrification for an EV Ready fleet assessment and to identify charging requirements and electrical infrastructure needs.
The maximum rebate is for 50 per cent of planning costs up to $10,000 (fleets of less than 150 vehicles) or $15,000 (fleets of more than 150 vehicles).
Electrical infrastructure incentive
Pre-approved customers can access funding to cover the cost of installing electrical infrastructure that has been identified as part of an approved EV Ready fleet plan. Funding can cover up to 50 per cent of infrastructure costs not including charging equipment, and is based on a number of factors including cost, emissions reductions and the overall business case.
BC Hydro provides funding for short-term EV pilot projects, based on the scope of work, value proposition, projected benefits and total cost of the testing. Pilot projects can include operational testing of medium and heavy-duty EVs, charging infrastructure and mobile charging solutions, and research and testing of charging strategies and vehicle performance.
Clean BC Go Electric Fleets Program
CleanBC offers assistance to eligible public and private organizations looking to transition their fleets to ZEVs. The Go Electric Fleets Program offers support in the following areas:
- ZEV Advisors: offered free of charge, to guide fleets through the process of assessing and acquiring ZEVs and related infrastructure.
- Fleet suitability assessments: financial support at 50% of the cost to install telematics equipment to a maximum of $50,000. Assessments without telematics are eligible for up to $3,000 in rebates.
- Infrastructure and facility assessments: financial supports for 50% of costs, up to $5,000.
- Electrical work and service upgrades: support for 33% of costs up to $20,000* per site (up to four).
- Level 2 charging infrastructure: reimbursement eligible equipment and installation costs to 75% or $5,000 per new charging station, to a maximum of $50,000 per applicant (for a limited time; thereafter capped at 50% up to $2,000).
- DC Fast Charge charging infrastructure: reimbursement of up to 75% of project costs, to a max of $20,000 per station up to 49kW, or up to $75,000* for stations 50kW or more (for a limited time; thereafter capped at 50% of costs up to $20,000 and 50% up to $50,000, respectively).
Note that the maximum reimbursement is higher across all the above categories for B.C. public sector organizations and Indigenous communities and businesses.
Vehicle incentive packages
For individuals who earn below certain income thresholds, B.C. offers incentive packages of up to $4,000 for the first-time purchase of a battery electric vehicle. The rebate applies on vehicles including larger EVs with a maximum retail price of $70,000, such as SUVs, minivans and pickup trucks.
Further incentives help businesses finance the installation of charging stations at the workplace, covering up to 50 per cent of purchase and installation costs to a maximum of $5,000. For assistance understanding the various initiatives and incentives, B.C. businesses can get up to five hours free advice on planning and rolling out their fleet electrification program.
For purchases of new EVs with a base price of less than $60,000 Quebec gives individuals and businesses a $7,000 rebate. Purchases of light duty vehicles used for commercial purposes are also eligible for financial assistance via Quebec’s Écocamionnage program (scheduled to close March 31, 2024).
Quebec’s Transportez vert programs also provide training for businesses looking to electrify their fleets as well as a way to bridge incentives for projects exceeding $100,000 in budget.
Yukon offers organizations and businesses $5,000 for a new battery-electric, hydrogen fuel cell or plug-in hybrid with a range of 50km or more, on vehicles priced at $60,000 or less. For plug-in vehicles with a range under 50 km, the rebate is $3,000.
Businesses that invest in green technologies and equipment in the Yukon may be eligible for a Super Green Credit — a business rebate that is issued as a refundable credit.
In 2021 Nova Scotia launched a rebate program that gives rebates of up to $3,000 on new qualifying BEVs and PHEVs, and up to $2,000 on qualifying used BEVs and PHEVs.
Businesses and individuals looking to utilize e-bikes in Nova Scotia are also eligible for savings. As part of the province’s “Electrify Nova Scotia Rebate Program,” e-bikes with a retail price of over $1,200 are eligible for a $500 rebate. However, the bikes must be purchased from either an independent or chain store based in the province.
Prince Edward Island
The island province currently offers the most generous rebate program in the Maritimes. The province promises $5,000 in financial aid to folks who buy a new or used EV and $2,500 for those who buy a PHEV.
Newfoundland and Labrador
The easternmost province pledges a $2,500 rebate for all-electric vehicles and $1,500 for a plug-in hybrid, with no price cap attached to this rebate. This offer is open to individuals, businesses and non-profit organizations. Newfoundland and Labrador also offers incentives for companies to install chargers at a business location, to a maximum of $5,000 per a Level 2 charger and up to $50,000 per DC Fast Charger.
Combined iZEV rebates by province and territory
The table shows the maximum rebate available for the purchase of a light duty all-electric vehicle when combining federal iZEV program rebates and local purchase incentives. Note that federal rebates for medium- and heavy-duty vehicles differ based on class and vehicle weight. Consult the list of eligible vehicles for exact figures.
|Province / Territory
|Total available rebate
|Newfoundland and Labrador
Before advancing to Lesson 3: How to start your electric fleet transition, try the quiz below about the costs related to owning and operating electric vehicle fleets.
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