The federal government must make changes to its zero-emission vehicle rebate program as Ottawa foots a fast-growing bill to support Canadian consumers buying vehicles imported from China, say auto industry advocates.
“We have an EV purchase incentive which is subsidizing Chinese-manufactured vehicles working directly against all of our efforts to build a North American EV supply chain in Canada.” Changes to the EV incentive structure in the U.S. Inflation Reduction Act, meantime, further insulate the North American auto sector. Starting in 2023, automakers were required to assemble vehicles and source components within the region to qualify for the up to US$7,500 in federal incentives.
Internal federal documents obtained through the Access to Information Act show Transport Canada has analyzed whether to follow the U.S. route based on local content manufacturing. It’s also assessing other approaches that would require ZEVs and their constituent parts to clear certain greenhouse-gas emissions thresholds to be eligible for rebates.
While the auto industry is pushing for action, Meena Bibra, a senior policy adviser for clean transportation at Clean Energy Canada, said throwing up barriers to EVs imported from China may be “premature.” Canada assuring its closest trading partner it’s “on the same page with respect to China” is particularly important heading into the six-year review of the U.S.-Mexico-Canada Agreement , Kingston said.