Home -> Sales Taxes -> Provincial Sales Tax ->
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.
Ontario Rebates for Fuel-Efficient Vehicles - Cancelled
The Incentives for Zero-Emission Vehicles (iZEV) Program, which went into effect May 1, 2019, is continuing until March 31, 2025, or until available funding is exhausted. As of April 1, 2022 the program has $92.9 million remaining in available funds for new purchase incentives.
The program will provide incentives of up to $5,000 for consumers who buy or lease an eligible iZEV.
Effective April 25, 2022, the iZEV Program's manufacturer's suggested retail price (MSRP) maximums were increased, which increased the number of makes and models of eligible vehicles. The definition of longer-range plug-in hybrid vehicles (PHEVs) is now based on electric range in kilometres.
This program provides funding towards the deployment of EV chargers and hydrogen refuelling stations across Canada.
The 2019 federal budget 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.
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 an EV charger rebate program 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. It was announced on June 12, 2023 that the program is almost fully subscribed. Applications for single-family homes and the EV Ready program will no longer be accepted starting June 15th, and it's possible that applications received by June 15th may not be eligible for rebates.
In BC there is also a carbon tax on fuel to encourage fuel conservation. See BC Ministry of Finance on Carbon Tax.
Owners of qualifying low-emission vehicles can apply for a decal (EOK decal) to allow them to drive their vehicle in HOV lanes on BC highways. See Apply for Eliectric Vehicles in HOV Lanes on BC Highways.
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 Low carbon vehicles (LCVs) and electric vehicles information for benefits available to owners of "green" vehicles. This includes the ability to obtain a "Green Licence Plate" which can drive in HOV lanes with any number of occupants, and can drive on selected High Occupancy Toll (HOT) lanes at no cost with any number of occupants.
The "Roulez vert" rebate for an all-electric or plug-in hybrid or hydrogen-powered vehicle is up to $7,000. There are also rebates of $2,000 for electric motorcycles and and $500 for electric scooters.
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 MSRP maximum threshold for the Roulez vert program was increased from $60,000 to $65,000 for vehicles registered on or after April 1, 2022.
The Canada Drives website has a table of the maximum amount of EV rebate available by province or territory, combined with the federal maximum rebate amount. In some provinces/territories only the federal rebate is available. The Canada Drives website also provides links to the provincial/territorial websites for EV rebates.
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 Excise Tax on Fuel-Inefficient Vehicles. There is a list of vehicles and their applicable excise tax for each year after 2006.
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: October 26, 2023
Copyright © 2002 Boat Harbour Investments Ltd. All Rights Reserved. See Reproduction of information from TaxTips.ca