The Federal Government has just revealed the 2019-2020 budget. The big news for drivers is offering electric vehicle rebates for the first time in all provinces, adding EV incentives for consumers, bigger ones for businesses, and more EV charging. And working with automakers to set zero-emissions vehicle sales targets.
The headline for shoppers is a federal zero-emission vehicle incentive. It's up to $5,000 for buyers of battery or fuel-cell powered vehicles. The 460-page budget doesn't set out exactly how the program will work just yet, but it does have a price cap. It only applies to vehicles with an MSRP of less than $45,000.
That cap excludes most of the electric vehicles currently on the market. The Tesla Model 3, for example, which just saw a major price cut starts at $47,600. The Hyundai Kona Electric starts at $45,599, currently.
Vehicles that should meet that price cap include the Hyundai Ioniq electric, Chevrolet Bolt, Volkswagen e-Golf, Kia Soul EV, Smart EQ, and the Nissan Leaf. The budget document says the government expects this to provide $300 million over three years.
Supporting businesses who want to adopt EVs, the budget changes the rules for deductions when purchasing an EV, fuel cell, or PHEV with a capacity over 15 kWh. Business buyers would be permitted to deduct the full cost of their new EV the first year instead. That's up from 15 percent in the first year for most motor vehicles. For passenger vehicles, cars and light trucks, that raises the capital cost (depreciation) limit from the $30,000 of a conventional car to $55,000.
Making sure that there's somewhere to charge these new ZEVs, the budget is providing $130 million over five years to have new charging and hydrogen refuelling stations installed. Transport Canada will get money to work with automakers to lock down, or at least pursue, voluntary zero-emission sales targets.
Changes will also be made to the road safety transfer payment program that is intended to align interprovincial vehicle business travel. That includes aligning requirements for connected and autonomous vehicles.
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