Incentives For Zero-Emission Vehicles Program
Location: National
Issue/Source: Incentives for Zero-Emission Vehicles Program / TRAN
Date: March 2024
Suggested Responses
- Transportation accounts for about a quarter of Canada’s greenhouse gas emissions, with the majority of these emissions coming from on-road vehicles. That's why the Government of Canada has an ambitious target of 100 percent zero-emission vehicle sales by 2035, coupled with a suite of support measures from purchase incentives to charging infrastructure.
- Zero-emission vehicles have the potential to significantly reduce Canada’s greenhouse gas emissions and support Canada’s transition to a low-carbon transportation system.
- The Incentives for Zero-Emission Vehicles Program provides a point-of-sale incentive of up to $5,000 for the purchase or lease of eligible zero-emission vehicles. Since May 2019, over 339,000 incentive claims having been submitted to Transport Canada.
- In April 2022, Transport Canada revised the manufactuers’ suggested retail price caps of the Incentives for Zero-Emission Vehicles Program to include a greater variety of larger vehicle models to better meet the needs of Canadian consumers and businesses.
If Pressed
On Zero-Emission Vehicle Sales Regulations
- The Government of Canada introduced regulated sales targets that will ensure that at least 20% of new light-duty vehicle sales will be zero-emission vehicles by 2026, at least 60% by 2030, and 100% by 2035. Draft regulations were published in the Canada Gazette Part 1 in December 2022. Final regulations have come into force in December 2023.
On availability of Zero-Emission Vehicle infrastructure
- The Government of Canada recognizes the importance of deploying charging and hydrogen refuelling stations to increase consumer and business confidence in zero-emission vehicles. Since 2016, the Government of Canada has made over $1.2 billion available to deploy charging infrastructure from coast to coast to coast, with the goal of supporting at least 84,500 new chargers across Canada.
On the suggested retail price cap for larger zero-emission vehicles not capturing pick-up trucks
- Through Budget 2022, the Incentives for Zero-Emission Vehicles Program expanded its manufacturer’s suggested retail price caps to make more vehicles eligible for the purchase/lease incentive.
- Given the dynamic nature of the zero-emission vehicle market and recent announcements regarding the United-States’ Electric Vehicle tax credit, Transport Canada will continue to monitor the results of the Incentives for Zero-Emission Vehicles Program and assess the need for adjustments to ensure it is meeting its objectives.
On suggesting the Incentives for Zero-Emission Vehicles Program should match the incentive amounts provided by the United-States Electric Vehicle Tax Credit
- The Government of Canada continues to monitor developments related to the United-States electric vehicle tax credits. Canada’s Incentives for Zero-Emission Vehicles Program currently captures more affordable zero-emission vehicles models than the United-States’ program.
- At current incentive levels, zero-emission vehicle market share in Canada continues to grow in line with reaching our zero-emission vehicle sales targets. In 2023, zero-emission vehicle market share in Canada reached 11.7% of total new light-duty vehicle registrations.
Background Information
- Since May 2019, over 339,000 vehicles have been incentivized through the Incentives for Zero-Emission Vehicles Program. These vehicles will lead to over 1.0 megatonne of greenhouse gas emission reduced annually and over 14 megatonnes reduced over their lifetime.
- Light-duty vehicle emissions account for approximately 50% of Canada’s transportation-related greenhouse gas emissions, and 12% of the country’s total emissions.
- Building on previous investments, Budget 2022 included more than $2.6 billion in measures to support accelerating light-duty zero-emission vehicle adoption, including $900 million to build Zero-Emission Vehicle charging infrastructure.
- Many provinces and territories are also offering incentives that can be combined with the Incentives for Zero-Emission Vehicles incentives to make zero-emission vehicles even more affordable.