Canadian federal government launches new $5,000 electric vehicle purchase incentive

A new electric vehicle purchasing incentive from the government of Canada allows Canadians to receive $5,000 CAD off of select zero-emissions vehicles.

To be eligible for the incentive you’ll need to purchase an electric vehicle on or after May 1st, 2019 with a “suggested retail price” of less than $45,000 if it has six seats or less, like the Nissan Leaf, Chevy Bolt and the Kia Soul EV. Higher tier trims for these types of vehicles are also included in the rebate, but the final price can’t be more than $55,000.

For EVs with seven seats, the government is offering the same $5,000 incentive, and those vehicles can have a base cost of $55,000 to be eligible. These vehicle trim packages can range up to $60,000 to remain eligible.

Buying or leasing a plug-in hybrid also nets Canadians $2,500 in rebates.

You’re still eligible for the incentive if delivery, freight and other fees, like paint colour and add-on accessories, push the actual purchase price over these set limits.

The government has a list of vehicles that are eligible for the incentive here. 

Notably, this new incentive won’t include the lower-cost Tesla Model 3 or the upcoming Model Y since both those vehicles are too expensive.

Why is this a priority?

The government has decided to help push the sales of EVs since transportation accounts for a quarter of Canada’s greenhouse gas emissions, and half of that comes from cars and light trucks.

“Zero-emission vehicles are the future of transportation. Our automotive industry and its workers are world class and uniquely positioned to design, develop and build the cars of today and tomorrow. We are working to advance Canada’s leadership position, promote investment and create an economy founded on highly skilled jobs for the middle class,” stated Canada’s Innovation, Science and Economic Development Minister Navdeep Bain, in a recent statement.

The government announced the incentive in the 2019 federal budget, but it’s still subject to parliamentary approval.

In the budget, the Trudeau’s government proposed a $300 million investment over three years to help make it easier for Canadians to buy the typically higher priced EVs.

This section of the budget is in a portion of a total $435 million investment from the government to help make Canada ready for an electric vehicle-based future. The government is investing $130 million over five years to pad out electric vehicle charging across the country among other things.

The Government has set up a website for Canadians to learn more about the new incentive and the country’s new zero-emissions plan.

One of the other highlights in the plan are proposed tax-related measures to help Canadian businesses convert their fleets to zero emissions vehicles.

The biggest highlight comes if you live in British Columbia or Quebec. Since both of those provinces have provincial EV rebates, that means incentives can be stacked to get even more off of a vehicle compared to other provinces. In Quebec, for example, you can get $8,000 off of eligible vehicles and B.C. offers $5,000 rebates.