Financial Planning -> Save Money -> Fuel Efficient Vehicles - Rebates and Incentives
Rebates for Fuel Efficient Vehicles
The federal government and some provinces provide rebates when fuel efficient vehicles, hybrid vehicles, or alternative fuel vehicles are purchased. See the following links:
The federal incentive program for zero-emission vehicles (ZEVs) will provide incentives of up to $5,000 for consumers who buy or lease an eligible ZEV. The program went into effect May 1, 2019.
The 2019 federal budget also included a 100% write-off for zero-emission vehicles for businesses, which is only available if no federal incentive is received for the vehicle purchase. For more information on this see our Capital Cost Allowance article.
British Columbia Rebates for Fuel-Efficient Vehicles
The Province of BC offers incentives for the purchase or lease of a new battery electric, plug-in hybrid electric vehicle, or hydrogen fuel cell vehicle, as well as rebates for electric vehicle (EV) charging stations.
See Government of BC Clean Energy Vehicles for BC website. The CleanBC / Go Electric BC website provides a list of electric vehicles in BC that are eligible for a combination of provincial and federal rebates, which are applied to the price of the car by the dealer at the time of purchase/lease.
BC Hydro also has rebates for (EV) chargers for single-family homes, condos and apartments, and workplace organizations (fleet charging stations). On May 18, 2022, PlugInBC announced that, for a limited time, these rebates would be increased to cover as much as 75% of eligible purchase and installation costs for EV charging stations, an increase from the previous 50% coverage.
In BC there is also a carbon tax on fuel to encourage fuel conservation. See BC Ministry of Finance on Carbon Tax.
In 2018, Ontario cancelled the cap and trade program, which funded the Electric and Hydrogen Vehicle Incentive Program and the Electric Vehicle Charging Incentive Programs. These programs were cancelled. See the Ontario Government information Ministry of Transportation website.
The "Roulex vert" rebate for an all-electric or a plug-in hybrid vehicle is either $4,000 or $8,000, and for a non-plug-in hybrid vehicle is $500. Rebates are available for the purchase and installation of a 240 volt charging station at your home, or for the installation of charging stations at a place of work or for a multi-unit building. There are also rebates for eligible used all-electric vehicles. See the Government of Quebec Discover Electric Vehicles website for more information, including lists of eligible vehicles, and information on electric vehicles and charging stations.
The Quebec rebates are available for vehicles purchased by December 31, 2020 or until available funds are exhausted, whichever happens first.
Canadian Excise Tax on Fuel-Inefficient Vehicles
To encourage Canadians to make eco-friendly consumer choices, the Government of Canada adopted an excise tax (or green levy) on fuel-inefficient vehicles. See Canada Revenue Agency publication ETSL64 Excise Tax on Fuel-Inefficient Vehicles. There is a list of vehicles and their applicable excise tax for each year after 2006. For 2018, the highest tax was $4,000 per vehicle, but the majority of vehicles have no tax.
Which Vehicles are Fuel-Efficient?
Natural Resources Canada has information on the Most Fuel-Efficient Vehicles. Even if you don't get a rebate, you can save money on gas!
Check out all of our ideas for saving money and building wealth!
Tax Tip: Even if you don't get a rebate, you may be able to save a lot using a fuel-efficient vehicle!
Revised: May 22, 2022
Copyright © 2002 Boat Harbour Investments Ltd. All Rights Reserved. See Reproduction of information from TaxTips.ca