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

Chemainus Secondary School 2021 graduate Nina Bumstead. (Photo by Don Bodger)
Grad ceremony proceeds, with a twist

Red carpet outside works out well for Chemainus Secondary’s Class of 2021

The Crofton trailer park home where the bodies of two people were found. (Photo by Don Bodger)
Mom still waiting for answers after daughter and her fiance found dead in Crofton

Pair discovered dead in their Crofton home in May identified as Rachel Gardner and Paul Jenkins

Chemainus street signs now contain Hul’qumi’num translations, like this one at the corner of Willow and Legion Streets. (Photo by Don Bodger)
Street signs go up in the Hul’qumi’num language

Chemainus intersections feature direct translations

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

CVRD to increase enforcement after audits reveal that curb-side recycling contamination in the district is well above acceptable limits. (File photo)
CVRD reports contamination in recyclables well above acceptable levels

Increased enforcement planned starting this summer

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

Chilliwack secondary school’s principal is apologizing after a quote equating graduation with the end of slavery in the U.S. was included in the 2020-2021 yearbook. (Screenshot from submitted SnapChat)
B.C. student’s yearbook quote equates grad to end of slavery; principal cites editing error

Black former student ‘disgusted’ as CSS principal apologizes for what is called an editing error

Skeena MLA Ellis Ross. (Photo by Peter Versteege)
BC Liberal leadership candidate condemns ‘senseless violence’ of Okanagan church fires

Skeena MLA Ellis Ross says reconciliation isn’t about revenge for past tragedies

A coroner’s inquest will be taking place at the Capitol Theatre in Port Alberni for the next week. (ELENA RARDON / ALBERNI VALLEY NEWS)
Teen B.C. mom who died following police custody recalled as ‘friend to many’

Police sent Jocelyn George to hospital after intoxication had gone ‘beyond the realm’ of normal detox

Cannabis bought in British Columbia (Ashley Wadhwani/Black Press Media)
Is it time to start thinking about greener ways to package cannabis?

Packaging suppliers are still figuring eco-friendly and affordable packaging options that fit the mandates of Cannabis Regulations

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

Penticton Indian Band Chief Greg Gabriel speaks to the Sacred Hearts Catholic Church burning down early Monday morning, June 21, 2021. (Monique Tamminga Western News)
Penticton band chief condemns suspicious burning of 2 Catholic churches

Both Catholic church fires are deemed suspicious, says RCMP

COVID-19 daily cases reported to B.C. public health, seven-day moving average to June 17, 2021. (B.C. Centre for Disease Control)
B.C.’s COVID-19 infections drop to 90 on Sunday, 45 Monday

Pandemic spread dwindles as 77% of adults receive vaccine

Emergency vehicles are parked outside of the Wintergreen Apartments on Fourth Avenue. (SUSAN QUINN / Alberni Valley News)
Port Alberni RCMP investigate stabbing on Fourth Avenue

Two men were found with ‘significant’ injuries near Wintergreen Apartments

Most Read