Deputy Minister's appearance at the Committee of the Whole (CoW) Senate, June 16, 2025

09. Incentives for Zero-Emission Vehicle Program

 Incentives for Medium- and Heavy-Duty Zero-Emission Vehicle Program 

  • The Incentives for Medium and Heavy-Duty Zero-Emission Vehicles (iMHZEV) Program, which is listed under the grant of Incentives for Zero-Emission Vehicles Program, provides incentives of up to $200,000 for the purchase or lease of eligible zero-emission vehicles (ZEVs). The Program end date is March 31, 2026, or before if the entire grant funding is committed. 

  • Since its launch, 6,736 iMHZEV requests were received by Transport Canada (TC). In 2024, medium and heavy-duty ZEVs represented 1.4% of the market share in Canada. 

  • In the 2025-26 Main Estimates, the planned spending authorities for this program is approximately $285M which is predominately for transfer payments ($264M out of the $285M) 

  • In the 2024-25 Main Estimates, the planned spending authorities for this program totaled $596.4M which was principally for transfer payments ($587.6M out of the $596.4M). 

  • The decrease between the 2024-25 and the 2025-26 Main Estimates is predominately due to the transfer payments for the Light Duty Zero Emission Vehicles which was fully committed in the 2024-25 fiscal year and there is no additional funding in 2025-26. 

SUPPLEMENTARY MESSAGES 

  • Main Estimates provides $264,699,318 in grant funding to the iMHZEV Program for FY2025-26. 

  • Although the Incentives for Zero-Emission Vehicles (iZEV) Program paused on January 12, 2025, and there is no additional funding for the Program in 2025-26, it is still jointly listed with the iMHZEV Program in the Main Estimates under the ‘Incentives for Zero-Emission Vehicles Program’. 

  • At the time of the suspension of the iZEV Program on January 12, 2025, more than 559,000 requests for reimbursement had been received by Transport Canada. 

  • Combined with other measures, the iZEV Program helped increase the market share of new EVs to 15.4% of all new light-duty vehicles in 2024, up from 3.1% in 2019 when the iZEV Program was first launched. 

UPDATE 

In November 2024, the iMHZEV Program clarified the incentive limits for organizations and businesses that share common ownership. As of November 8, 2024, organizations and businesses that share common ownership, other than common ownership as a result of being a publicly traded company, are considered as one single organization eligible for a combined total of 10 incentives or a maximum of $1,000,000 per calendar year (whichever comes first). 

The iMHZEV Program continues to provide important financial support for the adoption of medium and heavy-duty zero-emission vehicles in Canada. The Program has incentivized 6,368 vehicles to date. That said, Transport Canada is continually assessing ways to increase uptake by working with stakeholders to understand the challenges they are facing when making the transition to zero-emission vehicles. 

SUPPORTING FACTS AND FIGURES 

  • As of March 31, 2025, Quebec and British Columbia represent 70% of all iMHZEV incentive requests received by Transport Canada. Ontario represents 22%, with the remaining 7% coming from all other provinces and territories.   

  • Since the iMHZEV Program launched on July 11, 2022, a total of 6,736 incentive requests have been received (as of March 31, 2025). A total of $120.82M has been reimbursed to dealerships/manufacturers, and/or authorized sellers.  

BACKGROUND 

  • The iMHZEV Program provides point-of-sale incentives for Canadian businesses or organizations who buy or lease (12 months or more) an eligible medium or heavy-duty ZEV. There are multiple levels of incentives available depending on the vehicle class (based on the gross vehicle weight rating of the vehicle), with a maximum incentive of up to $200,000 per vehicle. 

  • In October 2023, the iMHZEV Program established a new incentive level of $5,000 for Class 2B and 3 medium-duty passenger vehicles (MDPVs) with a Manufacturer’s Suggested Retail Price (MSRP) price cap equivalent to $100,000 or lower. MDVPs are vehicles that do not satisfy one of the following commercial vehicle criteria:  

  • Have a seating capacity of 9 passengers or more;  

  • Have a cargo area (for example, a pick-up truck box or bed) with a minimum length of 183 cm measured throughout the cargo area; or,  

  • Be a truck with container attachment capabilities (e.g., chassis cab, half truck). 

  • As a result of the Class 2B criteria listed above, the Tesla Cybertruck was not deemed eligible under the iMHZEV Program due to the design of the cargo area not meeting the minimum length requirement to qualify as a commercial vehicle and being priced above the MSRP cap to qualify as an MDPV. 

Date modified: