The government owes Canadian car dealers as much as $11-million for rebates on EV sales, says Huw Williams, the head of the Canadian Automobile Dealers Association.Cole Burston/Reuters
The federal government is set to reimburse car dealers for electric-vehicle subsidies they paid to customers before Ottawa shut down the program in January.
The government will host a webinar with the dealerships on Friday outlining how the program will be reopened to reimburse the businesses for rebates of up to $5,000 car, incentives Ottawa cancelled after Tesla TSLA-Q claimed millions of dollars in rebates in a short period.
However, the government is still not saying when it will fulfil its promise to resume the rebate program it calls Incentives for Zero-Emission Vehicles (iZEV) for current car buyers.
“The reimbursement process for unpaid claims will be announced to dealerships on Friday,” said Laura Scaffidi, spokeswoman for Transport Minister Chrystia Freeland. “All eligible claims will be paid out.”
“Important to note that this is not about a new program,” Ms. Scaffidi said.
Opinion: Ottawa, bring back Canada’s EV incentive program
The government owes the country’s car dealers a total of as much as $11-million for rebates on EV sales, said Huw Williams, head of the Canadian Automobile Dealers Association, which represents 3,500 sellers.
“We’ve been pressuring the government for an extended period of time to get dealers paid,” Mr. Williams said by phone.
The government in early January warned the program, designed to reduce carbon pollution by influencing buyer choices, was running out of cash and would end before the scheduled end date of March 31. On Jan. 13, the government declared the fund exhausted and cancelled the program.
“They pulled the plug on the whole program,” Mr. Williams said.
The government has repeatedly said it will restore the program but has yet to provide a time frame. Car dealers say the wait is bad for their businesses as buyers are putting off purchases in hopes of getting a rebate later.
“What’s happening on showroom floors is consumers are hearing rebates are coming back and they’re waiting and it’s stalling sales and you can see it in the sales numbers,” Mr. Williams said. “The future of the program – it’s not helpful to be dangling that as a potential because it’s killing EV sales.”
Ms. Scaffidi on Wednesday did not respond to a question on when the program for new buyers will restart.
“We are looking at ways to reintroduce a purchase incentive worth up to $5,000 that supports Canadian workers, strengthens our domestic supply chains, and reflects the times we are in,” Ms. Scaffidi said.
Ms. Freeland said in March cars made by U.S.-based Tesla will not be eligible for the rebate program when it restarts unless President Donald Trump drops the raft of tariffs he imposed against Canadian goods – everything from steel and aluminum to automobiles and oil.
Tesla is blamed for the early end of the original rebate system, after the automaker’s Canadian dealers registered 8,600 sales at four dealers in one weekend in January, the Toronto Star reported, citing Transport Canada data. The total rebate claim was worth $43-million.
The government on Monday, Jan. 13, said the fund had run dry. Ms. Freeland later said Tesla’s claims were frozen and each application would be reviewed.
Tesla did not respond to emailed questions.
As Ottawa stalls the reintroduction of the EV rebates, it is sticking with rules that require 20 per cent of cars sold for the 2026 model year to be powered by a battery, fuel cell, or plug-in hybrid system. This rises to 60 per cent by 2030 and 100 per cent by 2035.
The car makers are pushing Ottawa to drop the rules, saying none of the traditional manufacturers are close to the required ratio.
In April, zero-emissions cars comprised 7.5 per cent of new vehicle sales, Statistics Canada said. Sales of all motor vehicles rose by 11 per cent but EVs sales fell by 28 per cent drop from April, 2024.
Car makers that do not meet the 20-per-cent threshold are required to purchase credits from those that have exceeded the bar. However, Tesla’s sales have plunged along with the public’s regard for Mr. Musk’s involvement in the U.S. administration, and available credits are scarce, industry participants say.