LOCATION: National
ISSUE/SOURCE: Light-Duty Electric Vehicle Measures
DATE: July 2025
SUGGESTED RESPONSES
- A safe, secure, efficient and sustainable transportation system is the backbone of a thriving economy. As transportation accounts for about a quarter of Canada’s greenhouse gas emissions, electric vehicles can significantly help Canada to transition to a low-carbon transportation system.
- The Government of Canada supports the transition to electric vehicles through measures aimed at making these cleaner vehicles more affordable and accessible.
- One of these measures was the Incentives for Zero-Emission Vehicles (iZEV) Program, which ended on March 31, 2025. This Program, which offered point-of-sale incentives of up to $5,000 for the purchase/lease of eligible electric vehicles, incented nearly 560,000 vehicles since 2019.
- Combined with other federal, provincial and territorial measures, the iZEV Program helped Canada reach a market share of 15.4% for new light-duty electric vehicles in 2024, up from 3.1% in 2019.
- As electric vehicle affordability remains out of reach for many, the Government of Canada continues to explore ways to support consumers, benefit Canadian workers and strengthen domestic supply chains.
IF PRESSED
On the pause of federal purchase incentives
- The iZEV Program was highly successful in supporting Canadians in their transition to electric vehicles.
- The Government of Canada thanks the dealerships, manufacturers and authorized sellers for their partnership and support of the Incentives for the iZEV Program throughout the years.
- On January 10, 2025, Transport Canada informed stakeholders that the iZEV Program would likely pause ahead of the planned end date of March 31, 2025 due to a depletion of program funds. This announcement triggered an unprecedented surge in claims submitted to Transport Canada. This resulted in the decision to pause the iZEV Program on January 12, 2025, only two days after the announcement.
- On March 21, 2025, Transport Canada was directed to review all bulk submissions submitted and fully examine each claim individually to ensure claims were valid and eligible before payments were made to dealerships, manufacturers and authorized sellers. Upon completion of the requested review, it was confirmed that all individual submissions were compliant and eligible. Claims were paid in June 2025.
- On July 11, 2025, the iZEV reimbursement process for unpaid incentive claims resumed, allowing dealerships, manufacturers and authorized sellers to submit outstanding incentive claims. They will be able to submit up to 25 incentive claims per day.
- During the temporary reimbursement process for unsubmitted claims, dealerships and authorized sellers will be able to submit claims for vehicles that were delivered between April 1, 2024, and January 12, 2025, and for which an incentive was provided. No exception will be made to these dates and all existing program criteria still apply.
On electric vehicle (EV) availability/sales regulations
- To help Canadians make the transition to an EV, the Electric Vehicle Availability Standard was put into place in late 2023 to require a gradual increase to the percentage of light-duty electric vehicles available for sale in Canada. These regulations fall under the purview of Environment and Climate Change Canada.
On availability of zero-emission vehicle infrastructure
- The Government of Canada recognizes the importance of deploying charging stations to increase consumer and business confidence in electric vehicles. To date, Canada has over 35,000 chargers publicly accessible.
- Natural Resources Canada leads the Government’s efforts to assess the number of charging stations required to support Canada’s EV transition. Previous commitments total over $1.2 billion in investment by 2030 to deploy charging infrastructure from coast to coast to coast.
On electric vehicles made in China
- In October 2024, the Government introduced a 100% surtax on all Chinese-made electric vehicles to protect Canada’s electric vehicle sector. To align with Canada’s electric vehicle measures, Transport Canada’s electric vehicle incentive programs implemented amendments barring any electric vehicles made in countries with which Canada does not have a free trade agreement from being eligible to receive incentives.
National and international EV collaboration
- Transport Canada actively works with partners across all sectors to help facilitate Canadians’ transition to EVs by working to reduce barriers. For instance, the Zero-Emission Vehicle Council brings together experts from federal, provincial and territorial governments, industry, non-governmental organizations, and academia to work together to address opportunities and challenges to increasing electric vehicle adoption in Canada.
BACKGROUND INFORMATION
- In 2023, on-road vehicles accounted for nearly 80% of all transportation emissions (118 metric tons of greenhouse gases) – of this, 67% came from light-duty passenger vehicles, and 33% came from medium and heavy-duty vehicles.
- As of December 2024, there were 26 million passenger vehicles in operation in Canada (3.2% of which are electric vehicles (EV), or about 862,000 vehicles).
- Since May 2019, nearly 560,000 vehicles have been incentivized through the Incentives for Zero-Emission Vehicles Program. These vehicles will lead to over 1.9 megatonnes of greenhouse gas emissions reduced annually and over 23 megatonnes reduced over their lifetime.
- The Incentives for Zero-Emission Vehicles program was officially paused on January 12, 2025, due to the depletion of its funding ahead of the stated March 31, 2025 end date.
- Some provinces and territories are continuing to offer incentives to make electric vehicles more affordable. Currently, incentives are available in Newfoundland and Labrador, Prince Edward Island, Quebec, Manitoba and Yukon.
- Previous programs for passenger EV incentives in the Northwest Territories, Nova Scotia, New Brunswick and British Columbia have ended or will soon sunset. The Government of Quebec announced a gradual reduction in the rebate amounts under the Roulez Vert program as of January 1, 2025. The program will end on December 31, 2026.