Rebates for Fuel Efficient Vehicles

The federal government and some provinces provide rebates when fuel efficient vehicles, hybrid vehicles, or alternative fuel vehicles are purchased.

Federal iZEV Program

Federal Zero Emission Vehicle Infrastructure Program

ZEV 100% Capital Cost Allowance if no Federal Incentive Received

BC Rebates for Fuel-Efficient Vehicles

BC Hydro Rebates for EV Charging Stations

BC Electric Vehicles in HOV Lanes on BC Highways

Ontario Rebates for Fuel-Efficient Vehicles - Cancelled

Green Vehicle Benefits in Ontario

Quebec Rebates for Fuel-Efficient Vehicles

Electric Vehicle Rebates in Other Provinces

Canadian Excise Tax on Fuel-Inefficient Vehicles

Which Vehicles are Fuel-Efficient?

Federal iZEV Program

The Incentives for Zero-Emission Vehicles (iZEV) Program, which went into effect May 1, 2019, is continuing until March 31, 2025, or until available funding is exhausted. As of April 1, 2022 the program has $92.9 million remaining in available funds for new purchase incentives.

The program will provide incentives of up to $5,000 for consumers who buy or lease an eligible iZEV.

Effective April 25, 2022, the iZEV Program's manufacturer's suggested retail price (MSRP) maximums were increased, which increased the number of makes and models of eligible vehicles. The definition of longer-range plug-in hybrid vehicles (PHEVs) is now based on electric range in kilometres.

Federal Zero Emission Vehicle Infrastructure Program (ZEVIP)

This program provides funding towards the deployment of EV chargers and hydrogen refuelling stations across Canada.

ZEV 100% Capital Cost Allowance if no Federal Incentive Received

The 2019 federal budget included a 100% write-off for zero-emission vehicles for businesses, which is only available if no federal incentive is received for the vehicle purchase. For more information on this see our Capital Cost Allowance article.

BC Rebates for Fuel-Efficient Vehicles

The Province of BC offers incentives for the purchase or lease of a new battery electric, plug-in hybrid electric vehicle, or hydrogen fuel cell vehicle, as well as rebates for electric vehicle (EV) charging stations.

See Government of BC Clean Energy Vehicles for BC website. The CleanBC / Go Electric BC website provides a list of electric vehicles in BC that are eligible for a combination of provincial and federal rebates, which are applied to the price of the car by the dealer at the time of purchase/lease.

BC Hydro Rebates for EV Charging Stations

BC Hydro also has an EV charger rebate program for single-family homes, condos and apartments, and workplace organizations (fleet charging stations). On May 18, 2022, PlugInBC announced that, for a limited time, these rebates would be increased to cover as much as 75% of eligible purchase and installation costs for EV charging stations, an increase from the previous 50% coverage. This program ended in June 2023.

In BC there is also a carbon tax on fuel to encourage fuel conservation. See BC Ministry of Finance on Carbon Tax.

BC Electric Vehicles in HOV Lanes on BC Highways

Owners of qualifying low-emission vehicles can apply for a decal (EOK decal) to allow them to drive their vehicle in HOV lanes on BC highways. See Apply for Eliectric Vehicles in HOV Lanes on BC Highways.

Ontario Rebates for Fuel-Efficient Vehicles - Cancelled

In 2018, Ontario cancelled the cap and trade program, which funded the Electric and Hydrogen Vehicle Incentive Program and the Electric Vehicle Charging Incentive Programs. These programs were cancelled.

Green Vehicle Benefits in Ontario

See the Ontario Government information Ministry of Transportation Low carbon vehicles (LCVs) and electric vehicles information for benefits available to owners of "green" vehicles. This includes the ability to obtain a "Green Licence Plate" which can drive in HOV lanes with any number of occupants, and can drive on selected High Occupancy Toll (HOT) lanes at no cost with any number of occupants.

Quebec Rebates for Fuel-Efficient Vehicles

The "Roulez vert" rebate for an all-electric or plug-in hybrid or hydrogen-powered vehicle is up to $7,000. There are also rebates of $2,000 for electric motorcycles and and $500 for electric scooters.

Rebates are available for the purchase and installation of a 240 volt charging station at your home, or for the installation of charging stations at a place of work or for a multi-unit building. There are also rebates for eligible used all-electric vehicles. See the Government of Quebec Financial Assistance for Electric Vehicles website for more information, including lists of eligible vehicles, and information on electric vehicles and charging stations.

The MSRP maximum threshold for the Roulez vert program was increased from $60,000 to $65,000 for vehicles registered on or after April 1, 2022.

Electric Vehicle Rebates in Other Provinces

The Canada Drives website has a table of the maximum amount of EV rebate available by province or territory, combined with the federal maximum rebate amount. In some provinces/territories only the federal rebate is available. The Canada Drives website also provides links to the provincial/territorial websites for EV rebates.

Canadian Excise Tax on Fuel-Inefficient Vehicles

To encourage Canadians to make eco-friendly consumer choices, the Government of Canada adopted an excise tax (or green levy) on fuel-inefficient vehicles. See Canada Revenue Agency publication Excise Tax on Fuel-Inefficient Vehicles. There is a list of vehicles and their applicable excise tax for each year after 2006.

Which Vehicles are Fuel-Efficient?

Natural Resources Canada has information on the Most Fuel-Efficient Vehicles. Even if you don't get a rebate, you can save money on gas!

Check out all of our ideas for saving money and building wealth!

Tax Tip: Even if you don't get a rebate, you may be able to save a lot using a fuel-efficient vehicle.

Revised: September 20, 2024