Canada's Largest EV Market Quietly Rolls Back Massive Government Subsidy (Again)

Steph Willems
by Steph Willems
canadas largest ev market quietly rolls back massive government subsidy again

Ontario, that strange land located between Detroit and Buffalo (and elsewhere, too) became the largest Canadian market for electric vehicles in 2017. There was good reason for it, too. Imagine walking into a dealer showroom, eyeballing a flashy luxury car, and suddenly your local political representative rushes in and hands you a check for $14,000, no strings attached.

Thanks, fellow taxpayers!

This subsidy is what buyers of Tesla Model S and X vehicles, retailing for over six figures (Canadian MSRP), enjoyed in Ontario until very recently. It’s important to note, though maybe not to certain folks, that the province holds the world’s largest sub-sovereign debt, most recently tagged at $311 billion, and pays over a billion dollars a month to service the interest on that debt.

Sorry, Ontario Tesla buyers. The party’s over. Again.

As of March 9th, there’s zero incentives awaiting big-bucks EV buyers. While there’s still $7,000 to $14,000 in the till for buyers of EVs or PHEVs costing less than $75,000 the new cutoff means there isn’t a cent for higher-end cars, and this author couldn’t be happier.

As part of the Ontario government’s green energy/climate change push, an initiative dating back to 2009, electric and plug-in hybrid vehicle are eligible for a range of subsidies. The province’s Green Energy Act (2009) also pushed electricity rates through the roof as a result of contracts signed for renewable solar and wind energy at exorbitant rates. Currently, Ontario pays neighboring U.S. jurisdiction to take its excess energy, and the cost of that transfer shows up on ratepayers’ bills. (Conservation comes easy when electricity’s relatively expensive, making the province’s power surplus easy to understand).

Under the province’s Electric Vehicle Incentive Program, buyers were once eligible for rebates totalling up to $8,500, depending on battery size. Long-range vehicles like Teslas garnered the most incentives. However, in 2016, the province backtracked on the subsidy free-for-all, capping the incentives for EVs or plug-in hybrids costing between $75,000 and $150,000 at $3,000. In doing this, it made cheaper EVs containing five seats eligible for up to $14,000 in subsidies.

In areas where transit, healthcare, homelessness rates, housing, or infrastructure isn’t perfect, hauling $14,000 out of government coffers and handing it to a luxury car buyer could seem tone-deaf, especially when it’s billed as a progressive move. And yet, inexplicably, the Ontario government removed the MSRP cap a year later, making any vehicle eligible for the maximum subsidy. This change came into effect, retroactively, on January 1, 2017.

Guess what? Buyers are much more likely to buy an electric vehicle when the government foots part of the bill! Last year, some 7,477 EVs and PHEVs were sold in the province, surpassing Canada’s former green car leader, Quebec. (Both Quebec and British Columbia offer green car incentives, but nowhere near as high as Ontario’s.)

In the case of low-end EVs like the Hyundai Ioniq or Chevrolet Bolt, the Ontario subsidy pushes the net price down into the low $20k range — not bad for someone looking for a zero-emission vehicle to tool around the city in. For top-end, long-range vehicles, however, the subsidy pushes the entry price to — perhaps — under $100,000. Most observers in the median income range, the types who keep an eye on dollars and cents in order to afford groceries and bills, probably didn’t think much of this policy, especially when the Ontario government added a carbon tax at the gas pumps.

As the province counts down to a June election, the governing Ontario Liberal Party, in power for 15 years, seems reluctant to keep the high-class/low-emission party rolling. While hydrogen vehicles have been added to the subsidy (despite a lack of refueling stations), the price ceiling for EVs now seems ironclad. Clearly, it’s one way of keeping the projected deficit to a trim $8 billion in the coming year.

According to the government, “incentives will be provided under the previous EVIP program for EVs ordered prior to March 9, 2018, provided that the EV is delivered and that the application is submitted by September 7, 2018.” This insulates the province from any lawsuits filed by Tesla buyers blindsided by the silent change to the government’s EV policy.

While your author applauds the move, not everyone’s happy about it. As internet posters squabble about what tax dollars are really for, Ontario has also beefed up its electric vehicle infrastructure spending. If you’re a business looking to install a Level 2 EV charging station, Ontario will pay 80 percent of the cost of installation, up to a total of $7,500.

It’s worth noting that most configurations of the Tesla Model 3, at the very least, will be eligible for the incentive. If it doesn’t, then Musk’s “affordable” electric vehicle isn’t the people’s car he envisioned.

[Image: Hyundai]

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4 of 65 comments
  • Bimmer Bimmer on Mar 11, 2018

    Well, we have a new Progressive Conservative leader elected. The one who does not support elite. The one who wants to cut bureaucracy. Almost 80% of Ontario's population is fed up choosing between heating and eating. He wants to get rid of Carbon Tax and a Green Energy Act, yet he wants to remain environmentally responsible. I hope that the people of Ontario will support him on June 7 and that he will form a new majority government.

    • See 1 previous
    • Bimmer Bimmer on Mar 12, 2018

      @Whatnext All people are innocent until proven guilty in the court of law. Do you perhaps believe rumors about Loch-ness monster or unicorns? I'm not sure if saving taxpayers around $1 Billion is considered an embarrassment. I'm more embarrassed by the clown in Parliament Hill who spends my hard earned tax dollars like a drunken sailor in a whore house! Or the other one in Queen's Park that's always talking about green this and green that. The only green is my tax dollars in her loot bag! But the party is almost over!

  • 28-Cars-Later 28-Cars-Later on Mar 11, 2018

    How much of those incentives is a simply VAT refund? Methinks this may not be costing them net anything, thoughts?

  • Tassos I knew a woman in the area, a journalist (at least she claimed to be a reporter of some kind) who owned one of these tiny pickups with a manual transmission. SHe was only 40 at the time, but she must have been hard of hearing, because she would routinely forget to shift and we would go at fairly high speeds in very low gear, which made a huge racket, which did not seem to bother her (hence my deafness hypothesis). Either that, or she was a lousy driver. Oh well, another very forgettable, silly car from the 80s (and if my first and LAST VW, a 1975 Dasher wagon, was any indication, a very unreliable one too!)
  • Tassos Now as for the Z specifically, Car and Driver had a comparison test of the new Z400, a car that looks good on paper, with plenty of HP etc, but, despite the fact that the cars that win in those tests are usually brand new models that are more up to date than their aging rivals, the Z finished DEAD LAST in the test, to my ovbious surprise.
  • Arthur Dailey Sorry but compare that spartan interior to the Marks that Corey is writing about. 'A cigarette lighter'. Every Mark had 4 cigarette lighters and ashtrays. And these came standard with 'a 3.4-liter, 182-horsepower straight-six in the engine compartment and a five-speed manual transmission'. Those do not tick off many of the luxury boxes aspired to by 'the greatest generation'.Not sure about the 7 series but one of My Old Man's associates showed up once with a brand new 5 series circa 1977 and they gave him such a bad time that he traded it for a Fleetwood within a week.
  • Tassos I clearly have no sentimental attachment to any cars from the 80s. I myself drove a Dasher (passat) wagon with horrible reliability, and then a Pontiac 2000, very fuel efficient for its time with its 1.8 lt and 5 speed, but a small econobox crudely made, with no luxuries inside. But most other cars of the era were really CRAPPY, unsafe, both in terms of passive AND active safety, had very few options modern cars have, etc etc. The best car I owned then was a 1991 Honda Civic 5-sp hatch, but that was also an 80s design that was on sale from 1987-1991. Not just the domestics were crappy then, but so were m ost of the imports. As you can see, I have ZERO "nostalgia" for any of these, especially not for the unreliable, poorly made JUNK from DATSUN-NISSAN, which is widely reviled overseas as a maker of small pickup trucks that are the favorites of Gypsies selling watermelons from their bed.
  • Tassos While Acura was the first Japanese attempt to sell 'luxury' (or "premium") vehicles in the US market, and despite its original good success in the near-luxury segment with the Legend and the far smaller and less expensive Itegra (a glorified Civic), it later lost its momentum and offered a series of underwhelming vehicles. It sure is not a LUXURY maker, and as long as it offers FWD or AWD and NOT RWD vehicles, it will never be taken seriously as a serious sports cars maker. Infiniti is much worse, and if both of them go under, few will notice. Lexus was more successful, offering pimped up TOyotas for 10,000s more, but there is NO vehicle in their lineup, esp now that they scewed up the only serious entry (the LS), that I would care to consider. AND I say all this as a very satisfied owner of 5-speed Honda coupes and hatchbacks (a 1991 Civic hatch and a 1990 Accord Coupe).