Buying an E-Vehicle? You May Qualify for a Rebate

In the market for a new car?  Did you know that the federal government wants to achieve, by 2035, 100% zero-emission vehicle sales.  Interim targets are that at least 20 percent of all sales are e-vehicles by 2026, and at least 60 percent by 2030.  To encourage those results, two federal programs are available to make those purchases easier.  And that’s good news because the average e-vehicle costs are still quite high; but the offset is lower driving costs.

What does it cost to buy an e-vehicle?  CAA has a great list outline the costs, which two models under $50k; the rest more.

Are their savings in driving the car?  Yes, about $3000 a year on gas, but also on servicing the car, according to the CAA.  According to Statistics Canada, recharging costs can be as little as $10 per 400 kilometres and, over a ten-year span, the average cumulative ownership cost of an electric vehicle hatchback is $48,943, whereas the gas-powered alternative is $82,515.

How much are the rebates?  The federal government has two programs according to their website:

• Up to $5,000 is available at the point of sale to Canadian individuals and businesses for the purchase or lease of light-duty ZEVs. Most personal vehicles, like cars, SUVs, and light pick-up trucks fall into this category.
• Up to $200,000 is available at the point-of-sale to Canadian businesses and to organizations for the purchase or lease of medium- and heavy-duty ZEVs. Trucks, cargo vans, shuttles, and other commercial vehicles fall into this category.

Note that some provinces offer rebates as well:

• British Columbia has the Go Electric Program for residents of BC up to a maximum of $4,000
• Quebec has an EV rebate of up to $7,000
• Newfoundland and Labrador offer up to a maximum of $2,500 under the takeCHARGE program
• New Brunswick has several incentives available in addition to the Federal rebate
• Nova Scotia offer up to a maximum of $3,000 for BEVs and $500 on eBike’s
• Prince Edward Island offer up to a maximum of $5,000
• Manitoba offers up to a maximum of $4,000
• Yukon offers up to a maximum of $1,500 of the shipping costs

How to account for e-vehicle purchases, and the rebates on your tax return. 

The iZEV (Incentive for Zero-Emission Vehicles) and the enhanced CCA cannot be used together for business or employment use.  In this case, a decision would need to be made as to which program may be most beneficial.  For example, if the iZEV incentive was used, then the regular CCA treatment (class 10.1) would apply at the regular 30% rate, however the AII (Accelerated Investment Incentive) measures would still apply.

Zero-Emission Vehicles and the enhanced CCA

For new zero-emission vehicles purchased after March 18, 2019, use class 54 with a first-year rate of 100% if the vehicle would otherwise be in class 10 or 10.1.  For vehicles used as taxis or short-term rentals (or other vehicles that would otherwise be in class 16), use class 55 with a first-year rate of 100%.

Rates for classes 54 and 55 vary as follows:

The maximum amount to be added to the CCA class class 54 or 55 vehicles is $61,000 (for 2024) plus taxes.  The net amount (after purchase incentives) is added to the CCA class (unless it exceeds the $61,000 maximum cost).

Zero-Emission Vehicles include:

• battery electric,
• hydrogen fuel cell, and
• plug-in hybrid vehicle with a battery capacity of at least 15 kWh.