The Canadian government
has released a new budget that
includes a $5,000 incentive for
EV purchases (the provinces of
Québec and British Columbia
already offer incentive pro-
grams, and so did Ontario until
a recently elected provincial
government canceled them). However, the price of eligible vehicles is
limited to $45,000, which excludes all currently available Tesla models.
The proposed budget reads (as reported by Electrek): “To encourage
more Canadians to buy zero-emission vehicles, Budget 2019 proposes to
provide $300 million over three years, starting in 2019-20, to Transport
Canada to introduce a new federal purchase incentive of up to $5,000 for
electric battery or hydrogen fuel cell vehicles with a manufacturer’s sug-
gested retail price of less than $45,000. Program details to follow.”
The proposal would also make EVs “eligible for a full tax write-off in
the year they are put in use,” a measure designed to encourage commer-
cial fleet operators to hasten the transition to zero-emission vehicles.
The budget also includes new EVSE investment of $130 million over five
years, as well as a program to encourage automakers to meet “voluntary
zero-emission vehicle sales targets.”
As Electrek and many others have noted, purchase incentives are a
blunt instrument – a carbon tax would be a much more efficient way to
reduce emissions, and would allow the market to decide on the best ways
to do so. Furthermore, the wisdom of the price limit is highly doubt-
ful (Tesla recently played a round of cat-and-mouse with the German
government over this issue). The self-evident argument that Tesla buyers
don’t need tax breaks misses the point. Purchase incentives don’t just
reward people who buy EVs – they also encourage automakers to build
them. And, whereas middle-income buyers may see a LEAF as an alterna-
tive to a fuel-efficient Camry or Accord, high earners are more likely to be
weighing a Tesla against a carbon-spewing BMW or Mercedes SUV.
Be that as it may, political realities are much the same in Canada as in
the US: politicians (and most voters) shun anything that’s called a tax, but
usually welcome anything that’s called a tax break. And the evidence from
around the world is clear: purchase incentives do tend to increase EV
sales. So, we’ll take it, eh?
Canada announces new $5,000 EV
incentive – but no Teslas need apply
Concept to
Reality
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