Government pondering a new rebate program for made-in-Canada EVs

CTV News has learned Transport Canada will allow car dealers to submit historical rebates from before the program was abruptly closed. Adrian Ghobrial explains.

Ottawa says it now has a plan to repay millions of dollars to car dealerships across the country who say they’ve been left holding the bag after the federal government’s iZEV program came to an abrupt halt in January, when it was apparently overwhelmed by rebate claims made by Tesla over a single weekend.

For months Canadian car dealerships have claimed that Tesla drove away with millions in electric vehicle rebates, leaving independent dealers out of pocket.

Car dealerships across the country received an email from Transport Canada on January 10 that said, “Due to the high uptake, the iZEV rebate program will be paused in a few weeks.”

That weekend, a handful of Tesla locations across Canada reported the sale of 8,600 vehicles, amounting to roughly $43 million in taxpayer funded rebates.

On January 13, the federal government closed the iZEV program portal before dealers across the country had time to process the rebates they’d already paid out to customers.

Huw Williams, a spokesperson for Canadian Automobile Dealers Association, says the program was designed in a way that “dealers paid out money to customers, with a commitment from the government of Canada that the dealers would then be reimbursed.”

CTV News spoke with some of the 200 independent dealers across Canada who say they’re out of pocket a combined $11 million. One dealership in Quebec, who did not want to be identified, told CTV News it is owed $400,000.

Following a months-long investigation, CTV News has now learned that Transport Canada will allow all car dealers, including Tesla, to submit all eligible claims to rebates that were paid out to customers before the program was abruptly closed in January.

Williams says he’s happy to see Ottawa pay the debt owed to “mom-and-pop dealers” across the country. He believes that Prime Minister Mark Carney may have intervened directly to ensure dealerships were made whole.

CTV News asked the office of Minister of Transport if all the claims made by Tesla in January were valid and if they’ve been paid out. Minister Chrystia Freeland’s office has yet to provide a clear answer and did not confirm that they’re looking at potentially launching a new rebate program.

It said in an email that they’re “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.”

Flavio Volpe with Automotive Parts Manufacturers’ Association believes “we’re going to see a renewed rebate program and it’s going to have some filters that say that qualifying vehicles either are made in Canada or have substantial (parts) from Canada.”

Volpe thinks the government realises that giving hundreds of millions of dollars in rebates to foreign companies, who don’t manufacture their vehicles in Canada is no longer a viable option.

“There isn’t one Tesla that’s made in Canada,” says Volpe who adds that the country’s car industry is hemorrhaging, and “production volumes are at ten-year lows, and export volumes are at an all-time low, down 23 per cent since April. It makes sense to gear purchase incentives towards vehicles made in Canada.”

Automotive Parts Manufacturers’ Association is now calling on Ottawa to not just look at incentives for electric cars, but to scrap the GST on the sale of all new made-in-Canada vehicles, which was a campaign promise made by the Conservative Party during the most recent federal election.