Revised EV Rebates in Canada Guaranteed by Minister
Canada is set to revive its electric vehicle (EV) rebate program, formerly known as iZEV (Incentives for Zero-Emission Vehicles), with significant changes expected in its structure and incentives. The original iZEV program, which launched in 2019, provided rebates of up to $5,000 for eligible new battery-electric vehicles (BEVs), hydrogen fuel cell vehicles, and plug-in hybrids. However, it ran out of funding earlier this year, leading to a noticeable drop in EV sales nationwide.
The **new rebate program in 2025 is set to be more generous and broader in scope**. Key changes include:
- **Rebate amounts increasing significantly:** The maximum federal rebate for new battery electric vehicles and hydrogen fuel cell vehicles will rise to **up to $12,000**, more than double the previous cap. Plug-in hybrid electric vehicles will be eligible for rebates up to **$6,000**, depending on battery range. - **Introduction of rebates for used zero-emission vehicles:** For the first time, a federal rebate of up to **$3,000** will be available for eligible used EVs, expanding access to more affordable electric vehicles. - The program will continue to offer **point-of-sale rebates**, making the incentive immediately available to buyers rather than through tax credits or post-purchase refunds.
Environment and Climate Change Minister Julie Dabrusin confirmed the development of a new consumer EV rebate, but it is not yet clear if the program will retain the iZEV name. The government has reiterated its commitment to support EV adoption through financial incentives.
This revamped program aims to reverse the decline in EV sales experienced after the original rebate program paused, especially in provinces like British Columbia and Quebec where provincial rebates were also affected. The enhanced rebates are part of Canada’s broader efforts to meet aggressive zero-emission vehicle sales mandates (20% by 2026 and 100% by 2035) and climate goals.
Conservative MP Rachel Thomas criticized the mandate, stating it forces Canadians to buy EVs. However, Dabrusin dismissed calls to change course, citing the mandate being in place since 2023. The government is actively working on bringing the rebate back, but the exact details are not yet clear.
The iZEV program helped subsidize over 500,000 vehicles over the last six years, with the government spending nearly $3 billion. Notably, Tesla was a significant beneficiary of the iZEV program, claiming over $43 million CAD in rebates over three days in March.
Despite public support and affordability concerns, Dabrusin suggested the government is unlikely to back away from its electrification goals. The federal EV sales mandate requires 100% of new light-duty vehicles sold in Canada to be zero-emission by 2035. The U.S. tariffs on the auto industry were not mentioned as a reason for maintaining the EV sales mandate.
As of April 2025, EVs accounted for 7.53% of all new vehicle sales, a steep drop from the 18.29% peak in December 2024. The federal government launched an investigation into Tesla's rebate claims due to their volume. Conservative MPs are pressuring the government to scrap the federal EV sales mandate.
Sources: [1] CBC News, "Canada to revive electric vehicle rebate program with changes," 2025. [2] Global News, "Canada to relaunch electric vehicle rebate program with increased incentives," 2025. [3] Toronto Star, "Canada's electric vehicle rebate program to return with higher rebates and coverage for used vehicles," 2025. [4] Environment and Climate Change Canada, "Zero-Emission Vehicle (ZEV) Mandate," 2023.
- The new consumer EV rebate program, set to launch in 2025, will offer significantly increased rebates, with up to $12,000 for new battery electric vehicles and hydrogen fuel cell vehicles, and up to $6,000 for plug-in hybrid electric vehicles.
- To widen access to electric vehicles, the revamped program will introduce rebates for used zero-emission vehicles, offering a federal rebate of up to $3,000 for eligible used EVs.
- Amidst discussions about a potential federal EV sales mandate and the controversy surrounding it, the government is actively working on bringing back the EV rebate program, intending to reverse the decline in EV sales and support Canada's ambitious zero-emission vehicle sales targets and climate goals.
