A Tesla charging centre is pictured in Squamish, B.C., Tuesday, June, 1, 2016. More than $100 million in federal rebates designed to make electric vehicles more affordable to low and middle-income Canadians has gone to those buying a Tesla, government records show. THE CANADIAN PRESS/Jonathan Hayward

A Tesla charging centre is pictured in Squamish, B.C., Tuesday, June, 1, 2016. More than $100 million in federal rebates designed to make electric vehicles more affordable to low and middle-income Canadians has gone to those buying a Tesla, government records show. THE CANADIAN PRESS/Jonathan Hayward

Federal rebate set to make electric cars more affordable see $100M go to Tesla buyers

Liberal government introduced the subsidy in 2019 for those buying or leasing new zero-emission vehicles

Transport Canada is looking at ways to include used vehicles in a federal rebate for electric cars — something observers say is needed to make the program more relevant to low or middle-income consumers, rather than only those able to buy brand new.

Their recommendation comes while a new analysis also shows more than $100 million of the almost $300 million in subsidies issued so far have gone to Tesla drivers.

The program offers buyers an upfront discount of up to either $5,000 or $2,500 and sellers then have to claim the incentives to be reimbursed.

The Liberal government introduced the subsidy in 2019 for those buying or leasing new zero-emission vehicles, including businesses and local governments, as a way to reduce transportation pollution.

From then until early 2021, government agreements show Tesla was reimbursed around $102 million of the roughly $296 million sent to individual dealerships selling electric vehicles from 15 different automakers.

Next to Tesla — which sells directly to customers — Hyundai dealerships saw the second highest reimbursement amount of $50 million, followed by Chevrolet dealerships at nearly $40 million.

Unlike the latter two, which have a selection of electric vehicles that qualify for rebates, Tesla currently only has one, its Model 3.

With a manufacturer’s suggested retail price for a standard range at $44,999, the Tesla Model 3 squeezes in just below the program’s cutoff for a low-end model of $45,000.

The pricing strategy used by automakers, including Tesla, is why a parliamentary committee that studied the use of electric vehicles, recommended last month that the program’s overall price cap be reviewed.

“To date, consumers who have purchased the Tesla Model 3 represent approximately 25 per cent of the total (program) claims,” reads a statement from Transport Canada, provided by spokesperson Cybelle Morin.

“The Tesla Model 3 is the best-selling electric vehicle in the world.”

The department said providing consumers with vehicle options is important “to increasing the adoption of zero-emission vehicles in Canada.”

For Germain Belzile, a senior associate researcher on energy issues at the Montreal Economic Institute, the overarching policy goal should be to reduce carbon-related emissions, not to get more electric vehicles on the road.

He said such subsidies may be a political “winner,” but are an expensive, inefficient way to reduce emissions of heat-trapping greenhouse gases in transportation compared to charging a higher carbon price on fuel.

Belzile co-authored a study in 2017 that looked at the provincial subsidies in Quebec and Ontario, which found together, those could cost more than $17 billion by 2030 and only slash emissions by less than four per cent annually.

“It’s like cellphones,” he said. “Cellphones have existed for a long time, but very few people used cellphones 35 years ago, for example, and that’s because they were very expensive and we didn’t need subsidies to eventually increase the usage of cellphones.”

But Ottawa and others, including U.S. President Joe Biden, increasingly look to electric cars as a way to transition the auto sector into a world less reliant on fossil fuels and cut transportation pollution.

Canada has a sales target to have 10 per cent of all light-duty cars be electric by 2025.

“It’s going to become a real affordability issue in terms of whether the government wants to spend that much money on helping people get to those targets by 2025,” said David Adams, president of the Global Automakers of Canada.

He said incentives should remain available for at least the next few years until the price gap closes between electric vehicles and ones powered by traditional internal-combustion engines.

In its own analysis, Ottawa has acknowledged the early adopters of electric vehicles tend to be well-educated, higher-income men living in cities.

Joanna Kyriazis, a senior policy adviser at Clean Energy Canada, says when it comes to Tesla, the giant “has made and built electric cars that people actually want to buy” and other companies have caught on.

She pointed to Ford’s recent unveiling of its electric F-150 truck.

“If you looked at what Ford was really selling there, it was power, speed, intelligence, American ideals of freedom and independence,” said Kyriazis.

“It wasn’t, ‘Drive this to be an environmentally responsible citizen.’”

Both she and Adams would like to see at least one key change to the federal rebate program — expanding it to include used vehicles, also called for in the report from Parliament.

“You find the highest interest in (electric vehicles) amongst the younger demographic that, let’s just face it, in most instances are the ones that are least able to afford to purchase the vehicle,” Adams said.

Kyriazis said around 60 per cent of car sales happen in the used market.

Paying the upfront cost for an electric vehicle off the lot is a barrier for Canadians with modest incomes, who would benefit the most from its lower fuel and maintenance costs, she added.

Kyriazis sees another possible way to ensure benefits aren’t going to those who could afford to buy an electric vehicle without the financial support: introduce an income cap, or provide more money for low-income earners.

Transport Canada is exploring options for expanding incentives to include used zero-emission vehicles, which would broaden access to such vehicles for more Canadians, the department said in a statement.

Last fall, Ottawa announced it was pumping another $287 million into the $300 million program because its popularity meant the cash was drying up sooner than the end date of 2022.

Stephanie Taylor, The Canadian Press

Like us on Facebook and follow us on Twitter.

Want to support local journalism? Make a donation here.

Electric vehicles

Just Posted

(File photo from The Canadian Press)
Red Deer down to 66 active COVID-19 cases

Red Deer has lowest number of active cases since last November

Orange shirts, shoes, flowers and messages are displayed on the steps outside the legislature in Victoria, B.C., on Tuesday, June 8, 2021 following a ceremony hosted by the Songhees and Esquimalt First Nations in honour of the 215 residential school children whose remains have been discovered buried near the facility in Kamloops, B.C. THE CANADIAN PRESS/Chad Hipolito
Alberta city cancels Canada Day fireworks at site of former residential school

City of St. Albert says that the are where the display was planned, is the site of the former Youville Residential School

FILE – Perry Bellegarde, National Chief of the Assembly of First Nations, takes part in an event on Parliament Hill in Ottawa on Tuesday, July 7, 2020. THE CANADIAN PRESS/Sean Kilpatrick
Indigenous Peoples Day must be a ‘call to action’, says Assembly of First Nations chief

Discovery of children at Kamloops residential school site must lead to change, Perry Bellegarde says

The Government of Alberta identified 115 new COVID-19 cases Sunday, bringing the provincial total to 3,089.
(Black Press file photo)
Alberta reports 100 new cases of COVID-19

The Central zone sits at 218 active cases

The Government of Alberta identified 115 new COVID-19 cases Sunday, bringing the provincial total to 3,089.
(Black Press file photo)
Red Deer drops to 71 active cases of COVID-19

Province adds 127 new cases of the virus

The border crossing into the United States is seen during the COVID-19 pandemic in Lacolle, Que. on February 12, 2021. THE CANADIAN PRESS/Paul Chiasson
VIDEO: Border quarantine to soon lift for fully vaccinated Canadians

Eligible travellers must still take multiple COVID-19 tests

Fans watch the warm-up before Game 6 between the Toronto Maple Leafs and the Montreal Canadiens in NHL playoff hockey action Saturday, May 29, 2021 in Montreal. Quebec’s easing of COVID-19 restrictions will allow 2,500 fans to attend the game for the first time in fourteen months. THE CANADIAN PRESS/Ryan Remiorz
Two-thirds of Canadians say governments shouldn’t lift all COVID-19 restrictions

Poll reports Canadians who gained pandemic weight say they have gained 16 pounds on average

Paul Bernardo is shown in this courtroom sketch during Ontario court proceedings via video link in Napanee, Ont., on October 5, 2018. Teen killer and serial rapist Paul Bernardo is set for a parole hearing today. The designated dangerous offender, has been eligible for full parole for more than three years. Bernardo’s horrific crimes in the 1980s and early 1990s include for kidnapping, torturing and killing Kristen French and Leslie Mahaffy near St. Catharines, Ont. THE CANADIAN PRESS/Greg Banning
Killer rapist Paul Bernardo faces parole hearing today; victim families opposed

Designated dangerous offender has been eligible for full parole for more than three years.

People look over the damage after a tornado touched down in Mascouche, Que., north of Montreal, Monday, June 21, 2021. Dozens of homes were damaged and one death has been confirmed. THE CANADIAN PRESS/Ryan Remiorz
One dead and extensive damage as tornado hits Mascouche, Que., north of Montreal

Damage reported in several parts of the city, and emergency teams dispatched to sectors hardest hit

FILE - In this Nov. 29, 2020, file photo, Las Vegas Raiders defensive end Carl Nassib leaves the field after an NFL football game against the Atlanta Falcons in Atlanta. Nassib on Monday, June 21, 2021, became the first active NFL player to come out as gay. Nassib announced the news on Instagram, saying he was not doing it for the attention but because “I just think that representation and visibility are so important.” (AP Photo/John Bazemore, File)
Nassib becomes first active NFL player to come out as gay

More than a dozen NFL players have come out as gay after their careers were over

A pair of Alberta residents were arrested after police responded to a report of a woman who had allegedly been assaulted and confined against her will on June 20, 2021. (File photo)
Salmon Arm RCMP arrest 2 Albertans suspected in alleged assault, unlawful confinement

Firearms, stolen items seized including NHL hockey cards believed to be worth thousands

A man makes his way past signage to a mass COVID-19 vaccination centre at the University of Toronto’s Mississauga campus during the COVID-19 pandemic in Mississauga, Ont., on Monday, May 17, 2021. THE CANADIAN PRESS/Nathan Denette
Canadians encouraged to see mRNA shots as interchangeable as more 2nd doses open up

Doctors urge people not to hesitate if offered Moderna after getting Pfizer for their first shot

Chief of Defence Staff Jonathan Vance sits in the front row during a news conference in Ottawa on June 26, 2020. THE CANADIAN PRESS/Adrian Wyld
Defence committee rises without report on Vance allegations

Committee had been investigating the government’s handling of complaints against former defence chief

Tl’etinqox-lead ceremony at the site of the former St. Joseph’s Mission in Williams Lake, B.C., June 18, 2021. (Angie Mindus photo - Williams Lake Tribune)
‘We are all one people’: Honouring residential school victims and survivors

Love, support and curiousity: Canadians urged to learn about residential schools and their impact

Most Read