Ottawa looks at including used cars in federal EV incentive, report says

A government report suggests federal incentives for used electric vehicles could be in the works as Ottawa pushes to phase out gas-powered cars.

Canada’s latest emissions reduction progress report says the federal government will “explore the potential to expand the Incentives for Zero Emission Vehicles (iZEV) program to include used vehicles.” But the three lines in the report don’t offer much detail.

Neither Transport Minister Pablo Rodriguez’s office nor the office of Environment Minister Steven Guilbeault would say whether discussions are underway to expand the incentive program.

In a media statement, Rodriguez’s office pointed to his most recent ministerial mandate letter, which commits the minister to improving “the affordability and [accelerating] the adoption of zero-emission vehicles, including used vehicles, by Canadian households and businesses.”

The mandate letter does not mention incentives for used vehicles. The few lines in the recent government report appear to be the first instance of Ottawa saying it’s moving in that direction.

Provinces like Nova Scotia, New Brunswick and Quebec offer consumers incentives to buy used electric vehicles.

During a news conference on Tuesday, Guilbeault seemed to be unaware that the government was considering the move.

“Right now, federally, the purchase incentive is $5,000 and that’s the plan we have moving forward,” he told reporters. “What will happen in the future? Will we change it? Will we adapt it? I don’t know.”

The federal government announced last week finalized new regulations requiring that all new vehicles sold — cars, SUVs and some pick-up trucks — be fully electric, plug-in hybrid or fuel cell electric by 2035.

Canada’s plan to phase out gas-powered car and truck sales by 2035

The federal government is laying out its final plan to phase out new, gas-powered passenger vehicles by 2035, with gradually increasing targets for manufacturers to meet.

One think-tank is calling on Ottawa to extend the incentives to used vehicles.

“The used market is growing, and not every Canadian can afford a new vehicle: gas or electric,” said Joanna Kyriazis, director of public affairs for Clean Energy Canada.

“Helping lower and middle-income Canadians purchase used electric vehicles and unlock the huge cost savings they provide is a great step.”

The Canadian Vehicle Manufacturers’ Association, which represents Ford, Stellantis and General Motors, said expanding the federal incentive program could encourage reluctant drivers to make the switch. But the incentives have to be large enough, the association said.

“You could have a slightly lower incentive for used vehicles, but you still want it to be powerful enough to help Canadians in that switch … to a new technology that people are still nervous about, they have questions about,” said Brian Kingston, president and CEO of the association.