Canada’s Federal government announced in its recent budget that incentives of up to $5,000 would be made available to consumers who buy or lease certain battery-electric, plug-in hybrid, and hydrogen fuel-cell electric vehicles.
Additional details have since been released for the program, officially called the “Incentives for the Zero-Emission Vehicles (iZEV) Program,” which will take effect on May 1, 2019. Only purchases and leases of eligible zero-emission vehicles on or after this date will qualify for the incentive program.
Significant among those details are price limits on the vehicles eligible for the incentive as well as the amount of the incentive.
Two sets of ZEV vehicles are eligible:
- Vehicles with six seats or fewer, where the Manufacturer's Suggested Retail Price (MSRP) for the base model/trim-level is less than $45,000. (Higher priced versions/trim- levels) of these vehicles, up to a maximum MSRP of $55,000, will also be eligible.)
- Vehicles with seven seats or greater, where the MSRP for the base model/trim-level is less than $55,000. (Higher priced versions/trim- levels of these vehicles, up to a maximum MSRP of $60,000, will also be eligible for an incentive.
It is noteworthy that no current Tesla models, not even the Model 3, will qualify for federal incentives, given those price limitations.
There are also two separate levels of incentive:
- Battery-electric, hydrogen fuel-cell, and ‘longer range’ plug-in hybrid vehicles (defined as those with a battery capacity of 15kWh or more) are eligible for an incentive of $5,000.
- ‘Shorter range’ plug-in hybrid electric vehicles (battery capacity of less than 15kWh) are eligible for an incentive of $2,500.
Only new vehicles, including dealer demonstrators, are eligible for the rebate, which can be applied by the dealer at the time of sale or lease.
Leased vehicles are eligible if the lease period is 12 months or more, but will be prorated based on the length of the lease. For example, a 48-month lease is eligible for the full incentive but a 24-month lease is eligible for only half the applicable.
Individuals can only take advantage of one iZEV incentive per calendar year. Businesses and provincial, territorial and municipal governments operating fleets can get up to 10 incentives per year but if they do, they will not be able to take advantage of the new tax write-off for these vehicles, also announced in the budget.
Transport Canada will keep a list of eligible ZEV vehicles available for Canadians to view on the iZEV program web page (canada.ca/zero-emission-vehicles).
One important caveat: Transport Canada will be seeking voluntary supply agreements with manufacturers and reserves the right to take models off the list if the department does not secure adequate supply commitments.