Did you know that transport is responsible for a staggering 25% of Canada’s total GHG emissions?
Today Federal and Provincial governments are taking a few initiatives to encourage us to switch to Zero Emissions Vehicles.
What is a ZEV?
A Zero Emissions Vehicle (ZEV) is a vehicle that has the potential to produce no emissions. They can still have a conventional internal combustion engine but must also be able to drive without using it. Battery-electric, plug-in hybrid electric and hydrogen fuel cell vehicles are all considered ZEVs.
What Incentives are available for Zero-Emission Vehicles?
Canada is aiming for 100% of new light-duty sales to be zero-emission by 2035, and to encourage us to switch to ZEVs, the government is launching a new Electric Vehicle Affordability Program (EVAP) on March 31, 2026
The program offers a financial rebate of
- up to $5,000 for battery-electric and fuel cell electric vehicles
- up to $2,500 for plug-in hybrid vehicles
for individuals looking to buy or lease an eligible ZEV vehicle.
There are two important things you need to know in order to qualify:
- Manufacturer Suggested Retail Price (MSRP) of the Zero Emission Vehicle must be $50,000 or less, if it was manufactured outside of Canada
- There’s no transaction value cap for Canadian-made EVs.
Which vehicles are eligible for the iZEV Program?
To be eligible under the iZEV Program, the vehicle must be new and meet all of Canada’s Motor Vehicle Safety Standards and for use on public streets, roads, and highways.
As long as the vehicle appears on the list of eligible vehicles, you qualify for a rebate.
How can I get my incentive?
You might think that getting your EV rebate would be an arduous task of endless paperwork and tedious research, but in fact, it’s straightforward and completely stress-free.
You get your rebate at point-of-purchase, meaning that the car dealership is responsible for all the paperwork and ensuring you get your full EV rebate. The dealer must apply taxes and fees to the purchase or lease before applying the incentive, and your rebate will show on the bill of your sale or lease agreement.
And don’t forget that this federal incentive can be applied in addition to any provincial or territorial EV incentives.
Tax write-offs for businesses
For businesses looking to buy or lease an EV for commercial purposes, Canada offers different incentives for Medium-and Heavy-Duty Zero-Emission Vehicles. This program was originally launched back in July 2022 and can provide incentives of up to $200,000 for eligible participants.
The vehicle models must satisfy a different set of commercial vehicle criteria, such as:
-
- have a seating capacity of 9 passengers or more;
- have a cargo area (for example, a pick-up truck box or bed) with a minimum length of 183 cm or
- be a truck with container attachment capabilities (e.g., chassis cab, half truck).
Businesses that receive an incentive from the federal iZEV Program can’t use the tax write-off for ZEVs. Companies can only use one or the other.
Also, for larger EV infrastructure projects, there’s a EV Charger Incentive program available by Green Economy Canada. It provides up to $100,000 per applicant in financial rebates to increase EV infrastructure projects in public places, on streets, multi-unit residential buildings, workplaces and light-duty vehicle fleets.
For more information on the tax write-off for ZEVs, businesses and self-employed individuals can contact the Canada Revenue Agency at 1-800-959-5525.
Some stats on the previous iZEV incentives program.
The initial iZEV incentives program started in 2019 and lasted until March 2025
Initial funding of $92,919,522 was provided on April 1, 2022, and Budget 2022 provided an additional $1.577 billion to continue the Program until March 31, 2025.
In June 2022, Transport Canada received $320,239,600 for the financial year 2022-23 (of the $1.577B), bringing the new accessible funds balance to $355.4M. The remaining funds from Budget 2022 were used up in 2023-24 and 2024-25.
Next steps
If you live in Ontario and are keen to make the leap to an EV, please do shop with a reputable dealership. We recommend using the Ontario Motor Vehicle Industry Council’s (OMVIC) registered dealer and salesperson search page to find the best dealership for you.
https://www.omvic.on.ca/RegistrantSearchM/
With the list of eligible ZEVs regularly expanding, you’re bound to find your perfect ride!
