A Tesla charging centre is pictured in Squamish, B.C., Tuesday, June, 1, 2016. More than $100 million in federal rebates designed to make electric vehicles more affordable to low and middle-income Canadians has gone to those buying a Tesla, government records show. THE CANADIAN PRESS/Jonathan Hayward

A Tesla charging centre is pictured in Squamish, B.C., Tuesday, June, 1, 2016. More than $100 million in federal rebates designed to make electric vehicles more affordable to low and middle-income Canadians has gone to those buying a Tesla, government records show. THE CANADIAN PRESS/Jonathan Hayward

Federal rebate set to make electric cars more affordable see $100M go to Tesla buyers

Liberal government introduced the subsidy in 2019 for those buying or leasing new zero-emission vehicles

Transport Canada is looking at ways to include used vehicles in a federal rebate for electric cars — something observers say is needed to make the program more relevant to low or middle-income consumers, rather than only those able to buy brand new.

Their recommendation comes while a new analysis also shows more than $100 million of the almost $300 million in subsidies issued so far have gone to Tesla drivers.

The program offers buyers an upfront discount of up to either $5,000 or $2,500 and sellers then have to claim the incentives to be reimbursed.

The Liberal government introduced the subsidy in 2019 for those buying or leasing new zero-emission vehicles, including businesses and local governments, as a way to reduce transportation pollution.

From then until early 2021, government agreements show Tesla was reimbursed around $102 million of the roughly $296 million sent to individual dealerships selling electric vehicles from 15 different automakers.

Next to Tesla — which sells directly to customers — Hyundai dealerships saw the second highest reimbursement amount of $50 million, followed by Chevrolet dealerships at nearly $40 million.

Unlike the latter two, which have a selection of electric vehicles that qualify for rebates, Tesla currently only has one, its Model 3.

With a manufacturer’s suggested retail price for a standard range at $44,999, the Tesla Model 3 squeezes in just below the program’s cutoff for a low-end model of $45,000.

The pricing strategy used by automakers, including Tesla, is why a parliamentary committee that studied the use of electric vehicles, recommended last month that the program’s overall price cap be reviewed.

“To date, consumers who have purchased the Tesla Model 3 represent approximately 25 per cent of the total (program) claims,” reads a statement from Transport Canada, provided by spokesperson Cybelle Morin.

“The Tesla Model 3 is the best-selling electric vehicle in the world.”

The department said providing consumers with vehicle options is important “to increasing the adoption of zero-emission vehicles in Canada.”

For Germain Belzile, a senior associate researcher on energy issues at the Montreal Economic Institute, the overarching policy goal should be to reduce carbon-related emissions, not to get more electric vehicles on the road.

He said such subsidies may be a political “winner,” but are an expensive, inefficient way to reduce emissions of heat-trapping greenhouse gases in transportation compared to charging a higher carbon price on fuel.

Belzile co-authored a study in 2017 that looked at the provincial subsidies in Quebec and Ontario, which found together, those could cost more than $17 billion by 2030 and only slash emissions by less than four per cent annually.

“It’s like cellphones,” he said. “Cellphones have existed for a long time, but very few people used cellphones 35 years ago, for example, and that’s because they were very expensive and we didn’t need subsidies to eventually increase the usage of cellphones.”

But Ottawa and others, including U.S. President Joe Biden, increasingly look to electric cars as a way to transition the auto sector into a world less reliant on fossil fuels and cut transportation pollution.

Canada has a sales target to have 10 per cent of all light-duty cars be electric by 2025.

“It’s going to become a real affordability issue in terms of whether the government wants to spend that much money on helping people get to those targets by 2025,” said David Adams, president of the Global Automakers of Canada.

He said incentives should remain available for at least the next few years until the price gap closes between electric vehicles and ones powered by traditional internal-combustion engines.

In its own analysis, Ottawa has acknowledged the early adopters of electric vehicles tend to be well-educated, higher-income men living in cities.

Joanna Kyriazis, a senior policy adviser at Clean Energy Canada, says when it comes to Tesla, the giant “has made and built electric cars that people actually want to buy” and other companies have caught on.

She pointed to Ford’s recent unveiling of its electric F-150 truck.

“If you looked at what Ford was really selling there, it was power, speed, intelligence, American ideals of freedom and independence,” said Kyriazis.

“It wasn’t, ‘Drive this to be an environmentally responsible citizen.’”

Both she and Adams would like to see at least one key change to the federal rebate program — expanding it to include used vehicles, also called for in the report from Parliament.

“You find the highest interest in (electric vehicles) amongst the younger demographic that, let’s just face it, in most instances are the ones that are least able to afford to purchase the vehicle,” Adams said.

Kyriazis said around 60 per cent of car sales happen in the used market.

Paying the upfront cost for an electric vehicle off the lot is a barrier for Canadians with modest incomes, who would benefit the most from its lower fuel and maintenance costs, she added.

Kyriazis sees another possible way to ensure benefits aren’t going to those who could afford to buy an electric vehicle without the financial support: introduce an income cap, or provide more money for low-income earners.

Transport Canada is exploring options for expanding incentives to include used zero-emission vehicles, which would broaden access to such vehicles for more Canadians, the department said in a statement.

Last fall, Ottawa announced it was pumping another $287 million into the $300 million program because its popularity meant the cash was drying up sooner than the end date of 2022.

Stephanie Taylor, The Canadian Press

Like us on Facebook and follow us on Twitter.

Want to support local journalism? Make a donation here.

Electric vehicles

Just Posted

Fire trucks parked near the McEachern Tobacco Barn on Wednesday, June 16.(Aaron Hemens/Capital News)
Fire at heritage tobacco barn in Kelowna doused by residents

McEachern Tobacco Barn is on the city’s heritage register

Elias Carmichael #14 and Ethan Ernst #19 of the Kelowna Rockets check Gage Goncalves #39 of the Everett Silvertips during a game at Prospera Place on February 28, 2020, in Kelowna. (Photo by Marissa Baecker/Shoot the Breeze)
Fans expected to be back in the stands for Kelowna Rockets 2021-22 season

The Rockets haven’t played in front of a crowd since March 2020

Kelowna flags were flown at half-mast after the discovery of a residential school burial site in Kamloops. (File photo)
Poll: Should Kelowna cancel Canada Day celebrations this year?

Calls are mounting across the country for cities and towns to not host celebrations

The Okanagan Forest Task Force uses a Ford F350 pick-up truck to gather back country garbage. (Okanagan Forest Task Force/Contributed)
Kelowna Canadian Tire steps in to support Okanagan Forest Task Force

The volunteer group has removed over 351,000 pounds of illegally dumped garbage to date

(Phil McLachlan/Capital News file)
Man found dead at Kelowna orchard

Police say the man was working in the orchard at the time of his death; criminality not suspected

Maxwell Johnson is seen in Bella Bella, B.C., in an undated photo. The Indigenous man from British Columbia has filed complaints with the B.C. Human Rights Tribunal and the Canadian Human Rights Commission after he and his granddaughter were handcuffed when they tried to open a bank account. THE CANADIAN PRESS/HO-Heiltsuk Nation, Damien Gillis, *MANDATORY CREDIT*
VIDEO: Chiefs join human rights case of Indigenous man handcuffed by police in B.C. bank

Maxwell Johnson said he wants change, not just words, from Vancouver police

For more than a year, Rene Doyharcabal and a small group of neighbours in Langley’s Brookswood neighbourhood have been going out every evening to show support for first responders by honking horns and banging pots and drums. Now, a neighbour has filed a noise complaint. (Langley Advance Times file)
Noise complaint filed against nightly show of support for health care workers in B.C. city

Langley Township contacted group to advise of complaint, but no immediate action is expected

A nurse prepares a shot of the COVID-19 vaccine at the Yukon Convention Centre in Whitehorse on Wednesday, March 3, 2021. THE CANADIAN PRESS/Mike Thomas
Vancouver couple pleads guilty to breaking Yukon COVID rules, travelling for vaccine

Chief Judge Michael Cozens agreed with a joint sentencing submission,

Cannabis bought in British Columbia (Ashley Wadhwani/Black Press Media)
Is it time to start thinking about greener ways to package cannabis?

Packaging suppliers are still figuring eco-friendly and affordable packaging options that fit the mandates of Cannabis Regulations

An inmate in solitary confinement given lunch on Tuesday, May 10, 2016. THE CANADIAN/Lars Hagberg
22-hour cap on solitary confinement for youth in custody still too long: B.C. lawyer

Jennifer Metcalfe was horrified to hear a youth had spent a total of 78 straight days in isolation

Old growth in the Columbia Valley, in the Kinbasket area. (Photo submitted)
Wildsight: Old-growth forests are being logged in Golden

Wildsight says that Canfor has been logging old growth at the Blaeberry headwaters

MAKING MUSIC
The Dixie Fried Hep Katz recorded a promotional video at the Kettle Valley Steam Railway station featuring the railway’s steam locomotive. The young band from Enderby plays Canadian Rockabilly, with Porter Johnson, 20, writing, lead guitarist and vocals; sister Kyndra on drums; and Logan Bannick on bass. The band is using the locomotive to promote their song Spooky Train and help shed light on the Kettle Valley Steam Railway’s drive for donations. (Tom Burley photo)
Donations help with repairs of Summerland steam railway

Kettle Valley Steam Railway put out earlier call for railway ties, tires for locomotive

People line up to get their COVID-19 vaccine at a vaccination centre, Thursday, June 10, 2021 in Montreal. THE CANADIAN PRESS/Ryan Remiorz
Vaccines, low COVID case counts increase Father’s Day hope, but risk is still there

Expert says people will have to do their own risk calculus before popping in on Papa

Most Read