Enthusiastic Quebecers Might’ve Made Canada Run Out Of EV Rebate Money

Instead of a more vague fleet average emissions strategy that accepts a variety of powertrains in the long run, Canada went all-in with a national EV mandate that will require 100 percent of new vehicles sold in 2035 to produce zero tailpipe emissions, otherwise automakers could face legal action. Unfortunately, strong mandates like that need equally strong incentives to be feasible, and it turns out that Quebec might’ve bought so many EVs that Canada’s federal electric vehicle rebate program ran out of money early.

In 2024, the province of Quebec announced it was slashing the maximum rebate available under its EV subsidization program from $7,000 to $4,000 when 2025 rolled around. That was a good reason to hurry up with an EV purchase, but an even better one appeared in December.

During the twelfth month of 2024, CBC News reported that the province of Quebec announced it would pause its EV rebate program on Feb. 1, 2025 because it had been a bit too successful. “Roulez vert,” as they call it, is about to run out of money, and it can’t be topped up until a new provincial budget rolls out in April. Despite the pause in funding, it’s worth noting that the program is not dead yet. As Quebec Environment Minister Benoit Charette told CBC News:

It’s very, very costly. The demand is very high, so we exceeded our budget. So we simply suspend the program for only two months. It’s not the end of Roulez vert.

Still, a gap in funding combined with decreased incentives seems like encouragement to make haste. As a bonus, Quebecers who bought an eligible electric vehicle in 2024 didn’t just get $7,000 back from their provincial government, they also got $5,000 back from the Canadian federal government, just as any qualifying EV buyer in Canada would on an electric car with a base MSRP under $55,000 CAD or an electric utility vehicle, minivan, or wagon with a base MSRP under $60,000. Indeed, from April 1, 2023 through November 2024, Quebec registrations made up 56 percent of federal EV credits, however it turned out that the federal program also suffers from some of the same weaknesses as Quebec’s provincial program.

On Monday, the Canadian government announced that it, too, had run out of money allocated for electric vehicle rebates. If you go on the official government webpage for Canadian federal EV rebates right now, you’ll see this message: “The Incentives for Zero-Emission Vehicles (iZEV) Program funds have been fully committed. Consequently, the iZEV Program has now officially paused.” So, if you’re Canadian and wanted to get that sweet EV rebate, it looks like you might be waiting a while.

How long is a while, though? Well, theoretically, the program can be topped up in April when federal budget time rolls around. However, theory doesn’t always translate to practice. In the 2022 budget, the federal government allocated $1.7 billion Canadian towards EV rebates. In the 2023 to 2024 fiscal year alone, car buyers received $806 million in EV rebates, while EV buyers who signed on the dotted line from Apr. 1 2024 through November got nearly $736 million in rebates. Going from an average of $67.2 million per month to $92 million per month in one fiscal year is pretty rapid growth, and in times when people are worried about new potential economic threats, Canada’s EV rebate program might simply prove too unsustainable to continue.

At the same time, Canada’s looking ripe for a federal election in Spring, and who knows if whichever party wins will re-up the rebates or can them altogether? Electric vehicles have, unfortunately, become all-or-nothing political pawns, which is ridiculous because it didn’t need to end up like this. It would also put manufacturers in a tough spot, since they’ve spent billions of dollars building EV-intensive long-term plans. Removing incentives would put a wrench in those plans, as David Adams, President and CEO of the Global Automakers of Canada industry alliance said in a statement.

While incentives are not required forever, they do need to remain in place until at least price parity has largely been achieved, otherwise the largest barrier to EV adoption – price, will continue to hinder widespread adoption and put the government’s ZEV mandate targets increasingly at risk.

For now, I have to hand it to Quebec. Out of all provinces, it did the most with making EV adoption more affordable, and it rode that train until it reached a crisis point. A whole lot of people who might not otherwise have the borrowing power to afford a new EV despite running costs washing out were able to afford green family transportation, and that’s a good thing. Plus, since many of the formerly eligible EVs are just normal cars, it’s not like people were trading in their enthusiast cars for them in droves. Would anyone miss a 2007 Chevrolet Equinox?

(Photo credits: Hyundai, Kia, Ford)

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