Federal Budget Fails to Include Return of ZEV Incentives

Prime Minister Mark Carney's government tabled its first Budget on Tuesday, and missing from the long list of measures is the return of an incentive program for zero-emission vehicles (battery-electric and plug-in hybrid).

The federal incentives, which could reach $5,000, have been suspended indefinitely since January 13, 2025 due to the program running out of funds.

• Also: Federal ZEV Rebates to Return, Environment Minister Says
• Also: B.C. to End Zero-Emission Vehicle Rebates After May 15

In May, Minister of Industry Mélanie Joly reiterated her commitment to restoring the federal incentive program across the country. She noted that this measure was already included in the Liberal Party of Canada's platform during the last election.

Then, in June, Minister of Environment and Climate Change Julie Dabrusin also hinted that the government was about to reinstate its program. However, much has changed in the economy and the EV market since then, including a global slowdown in demand and an intensification of the tariff war with the U.S.

In early September, Ottawa decided to backtrack on its EV sales targets, which were set to come into effect in 2026, as the auto industry is being severely impacted by the Trump administration's policies. Starting next year, nearly 20 percent of new vehicles sold by automakers in Canada were to be ZEVs. That is no longer the case.

As mentioned in today’s Budget, the government will announce the next steps on electric vehicles in the coming weeks. Also, the incentives for medium- and heavy-duty ZEVs will conclude at the end of 2025-2026.