The funding, announced as the government’s kickoff to EV Week in Canada, will provide buyers of eligible vehicles as much as $200,000 in federal rebates, with potential for more provincial rebate savings

It’s EV Week in Canada and the federal government is using the opportunity to kickoff a new zero-emission purchase and leasing incentive program aimed at the medium- and heavy-duty vehicle (MHDV) sector.

Up to $200,000 may be awarded for the purchase or lease of an eligible new zero-emission vehicle by governments at all levels, businesses and organizations. The federal rebate may be combined with provincial rebates, but currently only Quebec and British Columbia offer purchase incentives for MHDVs.

The federal program funding, totally nearly $550 million, will be available for an initial four-year term or until funding is exhausted. The rebate amount varies by size of the vehicles and each rebate will aim to cover roughly 50 per cent of the price difference between an equivalent combustion vehicle and electric vehicle. Each recipient may claim a maximum of 10 incentives per year and the total value claimed cannot exceed $1 million, a Ministry of Transport official tells Electric Autonomy Canada.

“Helping Canadian businesses and communities make the switch to a zero-emission vehicle is win-win-win: it keeps our air clean, helps people save money on fuel, all while positioning Canada as a leader on building and powering these vehicles,” said transportation minister, Omar Alghabra in a press release for the announcement.

“Today’s announcement is about making sure that Canadian businesses and leaders of our communities have the options they need to transform their fleets to zero-emission vehicles.”

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Focusing on MDHVs

Currently the transportation sector as a whole — including passenger vehicles — is the country’s second largest source of pollution. The government has previously committed to all new MHDV sales being zero-emission by 2040.

But adoption of medium- and heavy duty zero-emission vehicles in Canada has been sluggish.

Many fleet managers today are alarmed at the price difference between combustion and electric vehicles. The latter can often cost 30 to 50 per cent more to purchase, though through total cost of ownership many zero-emission vehicles end up being more economical over their lifetime.

“More and more, electric vehicles are becoming the affordable option, and our incentives can help tip the scales for anyone considering making the switch. It is both fair and good policy for businesses to also get purchase incentives for medium- and heavy-duty vehicles, many of which are being produced right here in Canada,” said Steven Guilbeault, minister of environment and climate change.

Per Government of Canada data, the latests incentive program for MHDVs “is expected to result in annual greenhouse gas emission reductions of up to 200,000 tonnes per year in 2026, growing to 3 million tonnes per year by 2030.”

Examples of vehicles eligible for the funding (per the government’s information) include: coach buses, refuse trucks, some construction trucks, delivery vans, full sized-pickups and step vans.

Types of vehicles that may be not be eligible are: transit buses, school buses, recreational vehicles (RVs), or off-road vehicles. Vehicle conversions are also not eligible.

The federal MHDV incentive program is available from July 11 and a full list of eligible vehicles, including those that can be leased rather than purchased, can be found here.