Consumer Rebates Are Coming Back for EV Buyers

Sales of electric and zero-emission vehicles are set to get a shot in the arm, as the Canadian government intends to bring back consumer rebates to increase adoption. Unfortunately, what those rebates will be worth remains to be seen.

The government will "look at ways to reintroduce a purchase incentive that supports Canadian workers and strengthens our domestic supply chains," Hermine Landry, press secretary for the Office of the Minister of Environment and Climate Change, told AutoTrader in an email.

Questions remain over the size of the incentives, though. Landry pointed to the Liberal party's election platform when asked for further information, which also states that the party will "look at ways" to reintroduce an incentive worth "up to $5,000."

Background

The comments come amid scrutiny from Conservative Members of Parliament, who criticized the government’s Electric Vehicle Availability Standard (EVAS), which aims to ensure that all new vehicle sales are of zero-emission vehicles (ZEV) by 2035 — fully electric vehicles (EV), plug-in hybrid (PHEV), and hydrogen fuel cell vehicles are all considered ZEVs under this legislation.

Last week, automakers accused EVAS of being impossible to meet following reports of steeply declining ZEV sales in Canada. The drop in adoption came shortly after the Incentive for Zero Emissions Vehicles (iZEV) program was paused because all of the money allocated to it had been spent. With this year's federal election, doubt was cast on whether additional funding would be approved for the program.

Minister of Industry Mélanie Joly, however, said on June 10 that Canada would not bow to industry pressure and that the EVAS program was forging ahead as planned. Indeed, Landry told AutoTrader that the EVAS program was implemented to "remain effective regardless of fluctuations in EV sales."

“It is important to remain focused on the fact that the real threat to the Canadian auto industry right now are the unjustified tariffs from the United States, not electric vehicles, as Conservatives would suggest," Landry wrote. "We are working closely with Canada’s auto sector and provinces such as Ontario to ensure that our auto sector remains competitive."

Sales targets under EVAS are designed to be introduced relatively slowly and to ramp up from there. However, the first year of regulated sales targets arrives in 2026, and automakers are expected to have ZEVs make up 20 per cent of their sales by then.

Unfortunately, first-quarter ZEV sales fell from 16.5 per cent in 2024 to just 8.11 per cent in 2025. While the iZEV program’s hiatus is likely responsible for some of that decline, some automakers have said they do not believe that the reintroduction of consumer rebates can get sales to 20 per cent by next year.

While some industry stakeholders have claimed that the EVAS program will have a negative impact on Canadian jobs, not all industry experts are sure of that. Stephen Beatty, an automotive consultant and the former vice president of Toyota Canada Inc., has argued that strong ZEV mandates could, in fact, help keep automotive manufacturing in Canada while it is being antagonized by aggressive U.S. trade policy.

Sales targets would ensure that demand for zero-emission vehicles is high enough to support local manufacturing, while the trade war increases the price of vehicles made in America, where sales targets are being challenged, Beatty told AutoTrader in May. Our search for more trade partners could also open our market to ZEV manufacturers in other parts of the world, such as Europe and China, who may be willing to open production sites in Canada if it provides them with their own tariff advantages. Indeed, reports suggest that French automobile brand Alpine is considering selling EVs in Canada in the near future.

Landry said that the federal government is working to turn Canada into an "energy superpower" and that the auto sector is an important part of that plan. For consumers to buy into the idea, though, more clarity and generous incentives will likely be needed.