Taxation policy already benefits other clean technologies and is more stable and predictable than incentives over the longer term

Canada is making meaningful progress in supporting clean energy deployment through tools like the Clean Technology Investment Tax Credit (ITC), which offers refundable tax credits of up to 30 per cent of certain investments, and accelerated capital cost allowance (ACCA), which allows larger upfront depreciation of assets. However, one critical gap remains, particularly when it comes to ITCs: commercial electric vehicles are treated as secondary beneficiaries rather than core clean-technology assets.

I believe that needs to change.

Commercial vehicles — delivery vans, service trucks, fleet cars and light- and medium-duty work vehicles — are among the highest-utilization and highest emission-generating assets for a company, producing nearly 40 per cent of Canada’s transportation greenhouse gas emissions. These vehicles operate daily, accumulate high mileage and are directly tied to business productivity. Electrifying them delivers immediate emissions reductions, operating-cost savings and economic benefits.

Yet today, businesses are asked to electrify on-road fleets without access to the same investment tools available to other clean-energy assets.

That is a policy mismatch.

The case for an ITC on commercial EVs

Capital investments in clean technology are already supported through ITCs and full first-year expensing when they involve energy generation, storage or efficiency. Commercial electric vehicles clearly meet the same criteria:

• They displace fossil fuel consumption;
• They reduce operating emissions;
• They integrate directly with clean electricity; and
• They form the backbone of electrified supply chains

Treating commercial EVs differently from other clean-technology assets ignores their real-world impact.

An Investment Tax Credit for commercial electric vehicles — even at a modest rate — would immediately change fleet-transition economics and accelerate adoption at scale.

Economic and Business Benefits

From a business perspective, the barrier to EV adoption is not long-term savings — those are already well established — but upfront capital cost and cash flow.

While the Incentives for Medium- Heavy-duty Zero-Emission Vehicles (iMHZEV) Program covers a percentage of the purchase cost of eligible vehicles, the program is set to end in March. It is also a one-time payment to a vehicle dealer, whereas an ITC would:

• Reduce total capital cost of investment
• Allow for predictable savings over years;
• Improve cash flow and balance-sheet flexibility;
• Allow businesses to reinvest sooner in growth, hiring and productivity;
• Remove some risk for early adoption for small and mid-sized enterprises; and
• Represent a more stable, tax-based solution over the uncertainty of incentives

This is especially important for businesses that rely heavily on vehicles, but operate with limited capital margins.

Climate impact where it matters most

Passenger EV adoption is important, but commercial vehicles punch above their weight in emissions impact.

A single commercial vehicle can replace thousands of litres of fuel annually, deliver predictable and measurable emissions reductions;,and be paired directly with clean electricity and battery storage.

If Canada is serious about near-term emissions reductions, commercial fleets are one of the fastest and most cost-effective places to act.

Policy alignment and simplicity

An ITC for commercial EVs would not require reinventing the tax system. It could:

• Mirror existing clean-technology ITC structures;
• Apply to eligible zero-emission vehicles used primarily for business; and
• Include caps or thresholds to manage fiscal exposure

Most importantly, it would align transportation policy with clean-energy policy, instead of treating them as separate silos.

Conclusion

Commercial electric vehicles are not a fringe technology. They are a core clean-energy investment with proven economics, immediate emissions benefits and strong alignment with Canada’s climate and industrial goals.

Recognizing them through an Investment Tax Credit would send a clear signal:
clean transportation is clean technology — and should be treated as such.

Kent Heinrich is the Project Manager for MB ONT Free Ride EV Education Program