Canada’s electric vehicle (EV) rebate program is set to make a comeback, as confirmed by Environment Minister Julie Dabrusin this week. The original federal rebate program, known as the Incentives for Zero-Emission Vehicles (iZEV) program, was launched in 2019 and provided Canadians with up to $5,000 off the purchase of a new EV. Unfortunately, the program ran out of funding earlier this year, leading Ottawa to temporarily suspend it.
Dabrusin revealed that the government is actively working on reintroducing the rebate, although it may not necessarily be named iZEV. She emphasized that there will be a consumer rebate, acknowledging the program’s popularity in subsidizing over 500,000 vehicles and costing the government nearly $3 billion over the past six years. Notably, Tesla had been a major beneficiary of the iZEV program, claiming a substantial $43 million CAD in rebates over just three days in March, prompting a federal investigation.
The suspension of the rebate had a noticeable impact on EV sales, with Statistics Canada reporting a significant drop in April 2025. EVs accounted for only 7.53% of all new vehicle sales, a sharp decline from the peak of 18.29% in December 2024. This decrease in sales has raised concerns, especially given the federal mandate requiring 100% of new light-duty vehicles sold in Canada to be zero-emission by 2035, with a requirement for 20% of new vehicles offered for sale to be EVs starting next year.
Criticism of the federal EV sales mandate has intensified, with Conservative MPs calling for its elimination. They argue that the mandate does not align with the needs of Canadian families, particularly in light of U.S. tariffs on the auto industry. However, Dabrusin defended the mandate, stating that it has been in place since 2023 and is necessary to meet electrification goals despite shifting public support and affordability concerns.
Although no specific timeline has been announced for the renewed EV incentive, Dabrusin’s comments indicate that Ottawa remains committed to its electrification objectives. The return of the rebate program is eagerly anticipated by both consumers and industry stakeholders, as it plays a crucial role in promoting the adoption of electric vehicles in Canada.