Government Fuels EV Demand with Electric Car Rebates in Canada

June 24, 2019

With topics like climate change and carbon tax constantly in the daily headlines, more and more drivers are starting to feel pangs of guilt, maybe even dread, when they pull up to the gas pump. Not to mention the wallet-draining pain of volatile gas prices.

Whether you’re a seasoned driver or looking for your first ride, the environmental and economic impact of a combustible engine are likely becoming a more prominent factor in your vehicle purchase decision. That’s why automakers are paying closer attention to a growing segment of consumers wanting electric vehicles. Whether it’s plug-in hybrid vehicles or fully electric, automakers like Hyundai, Ford, Kia, Tesla, Volkswagen, Nissan, BMW, Toyota and more, are hustling to meet consumer demand.

There’s a lot to consider when choosing what kind of plug-in hybrid electric vehicle (PHEV) or battery-powered electric vehicle (BEV) to buy. Unlike when you buy a conventional emission vehicle at the dealership, both federal and provincial offer various vehicle rebates and incentives that can take a big chunk off the sticker price.

We’re going to take you through a step-by-step guide on what need to know about electric car rebates, which vehicles are eligible and what are the cheapest electric cars in Canada, so you can lighten your carbon load and save cash at the same time!

Reap Rewards From Electric Car Rebates in Canada

When the government released their yearly federal budget in March 2019, one of the key highlights of the document was a $300 million pledge to incentivize Canadians to go “green” on their next vehicle purchase. The funding, spread over three years, offers buyers up to $5,000 in rebates when buying a zero-emission vehicle (ZEV). What does Canada consider a ZEV? Battery-electric, plug-in hybrid, and hydrogen fuel cell all qualify.

Canada has dubbed this incentive program iZEV – the i stands for incentive – and it has two tiers. Battery-electric, hydrogen fuel cell, and longer-range plug-in hybrid vehicles are eligible for an incentive of $5,000, while shorter range plug-in hybrid electric vehicles are eligible for an incentive of $2,500. To qualify, the retail price has to be under $45,000 (there are some exceptions based on seat capacity or nicer version “trims”) and the vehicle has to be on this list of iZEV-approved models. Your rebate comes at point-of-sale from a dealership (or online), and you must buy new to qualify.

The Feds aren’t the only level of government encouraging you to go electric with your next purchase. British Columbia offers a high voltage package of electrical vehicle incentives, including up to $3,000 for buying new BEVs, PHEVs and fuel cell vehicles. That amount was recently reduced almost 50% by the provincial government. BC also offers something called the “SCRAP IT” program, where you can get up to $6,000 more for trading in your old fuel-burning gas guzzler for a new electric. There’s even an incentive for home charging stations in BC. In total, you could be receiving up to $14,000 off if check all the right boxes.

Quebec doesn’t have anything like the “SCRAP IT” program, but it is more much generous with their new vehicle rebate system. You can get up to $8,000 when buying or leasing a new PHEV or BEV, but you’ve got to keep the purchase under $75,000 – unlike BC where the limit is $55,000. Couple this with the federal program and you could be looking at up to $13,000 off your purchase price!

Unfortunately for those EV-interested drivers in Ontario, the Conservative government under Doug Ford scrapped their Ontario electric car rebate program in September 2018. That’s a shame for those looking to find the cheapest electric vehicle because Ontario offered rebates as high as $14,000, depending on make and model, before “unplugging” the program. The Ontario government claims this move will save taxpayers $1 billion over four years.

How to Get Your Electric Vehicle Rebate

You might think that collecting your electric car rebate would be a cumbersome task of endless paperwork to various levels of government, but in fact, it’s quite the opposite. Your rebate is obtained at point-of-purchase, meaning the car dealership is responsible for all that boring paperwork and ensuring you get the full electric car rebate you’re entitled to.

If you’re buying in a lease situation, your rebate can be prorated depending on the lease arrangement. For example, with the federal rebate, a 48-month lease is eligible for the full incentive while a 24-month lease gets you half the incentive.

For businesses looking to buy an electric vehicle for commercial purposes, say you’re a travelling sales rep or delivery driver, Canada’s most recent budget proposes a full tax write-off for certain ZEVs in the year they are put into use. The tax write-off is limited to $55,000, plus federal and provincial taxes paid.

Finding the Cheapest Electric Cars in Canada

With all this hot talk of rebates and incentives, we haven’t touched on what electric cars and hybrid cars cost and what are the cheapest electric cars available right now in Canada. If you’re looking for the best affordable electric car, consider these four all under $40,000 MSRP (Manufacturer’s Suggested Retail Price): Hyundai IONIQ, Kia Niro PHEV, Volkswagen e-Golf and the smart EQ fortwo electric car.

Hyundai IONIQ

Hyundai IONIQ, one of canada's most affordable EVs

As one of the most affordable electric vehicles on the market, this battery electric, generously sized hatchback boasts a 200-km range on a single charge. Good for everyday practical driving, the IONIQ has an MSRP of $37,899 and qualifies for the $5,000 federal rebate, plus provincial incentives in BC or Quebec.

Kia Niro PHEV

KIA Niro PHEV, one of canada's affordable EV options

The Niro plug-in hybrid is Kia’s first dedicated hybrid platform and it could be a good choice for those with “range anxiety”. While it only gets you 42 kilometres in electric range, the gasoline side will take you a stress-free 853 kilometres. There’s lots of space in this 5-passenger vehicle and its MSRP is $33,965 with up to $6,500 in electric vehicle rebates depending on which Province you live.

Volkswagen e-Golf

VW E-Golf, an affordable EV

The vaunted German automakers’ first foray into full electric is this redesigned, emission-free take on the popular Golf. At 200 km, its range is similar to the IONIQ but retails for a slightly less $36,720, with equal incentive qualification for up to $13,000 depending on whether you live in Quebec or BC.

Smart EQ fortwo

Smart EQ fortwo, an affordable EV in canada

Unless you’re buying an e-bike, it doesn’t come more affordable than the fully electric, ultra-compact fortwo coupe. This vehicle is best suited for city dwellers who want ample parking options and don’t mind the limited 93 km range. With an MSRP of $29,050 and electric car rebate potential of $13,000, this could be the perfect entry option for those on a conservative budget. 

Canada Drives has been helping Canadians find vehicles with great auto finance rates since 2010. We’re partnered with dealerships all across the nation that offer incentives and promotions for people facing all types of credit situations. 

Apply with Canada Drives to learn more and see what you're eligible for.

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