$550 million from the federal government to encourage the purchase of medium and heavy electric vehicles
As of July 11, it will be possible to benefit from incentives for the purchase of approximately 50% of the price difference between an electric vehicle and a traditional vehicle. Federal Transport Minister Omar Alghabra launched a $550 million four-year program on Monday to encourage the purchase of medium and heavy-duty zero-emission vehicles (iVZEML).
These incentives will apply to the purchase or lease of medium and heavy commercial vehicles with a gross vehicle weight rating greater than 8,500 pounds (3,856 kilograms).
Transport Canada specifies that these incentives “could be combined with provincial or territorial incentives to make these vehicles even more affordable”. Assistance available to provinces, territories, municipal and local governments, as well as organizations and businesses.
According to Mr. Alghabra, this program “aims to ensure that Canadian businesses and the leaders of our communities have the choices they need to transform their vehicle fleets into zero-emission vehicles”.
Quebec has demonstrated expertise in the electrification of medium and heavy vehicles, which will allow it to position itself favorably in this new strategy.
Michel Leblanc, President and CEO of the Board of Trade of Metropolitan Montreal
Michel Leblanc, president and CEO of the Board of Trade of Metropolitan Montreal, called the announcement “very good news.”
“These incentives will allow companies to electrify their vehicle fleets. This approach echoes the recommendations from our recent studies with Propulsion Québec and players in the electric and smart transportation sector. […] Moreover, Quebec has demonstrated expertise in the electrification of medium and heavy vehicles, which will allow it to position itself favorably in this new strategy,” he added.
Canada“>Transportation accounts for 25% of Canada‘s GHGs
With the iVZEML program, Ottawa estimates annual GHG emission reductions at 200,000 tonnes per year in 2026, then 3 million tonnes per year by 2030. The transportation sector is in fact the second source of pollution in Canada, says the federal Department of Transport.
According to Équiterre, this sector contributes 25% of the country’s greenhouse gas (GHG) emissions.
Mobility analyst within the organization, Andréanne Brazeau believes that this program “is an important step forward” towards the decarbonization of medium and heavy vehicles, given the “purchase price still too high [qui] remains an obstacle to the transition for many companies”.
“It’s going in the right direction, but there are also other ways to reduce emissions from freight transport that go beyond the simple electrification of vehicles. In urban areas, for the last delivery kilometers for example, we should also bet on solutions such as electrically assisted cargo bikes and the optimization of supply chains to reduce the number of vehicles on the streets, ”she continues.
Remember that there is a similar program for the financing of light and passenger zero-emission vehicles (iZEV). It was expanded when the 2022 budget was announced to large light vehicles, like SUVs and pickup trucks, with an additional $1.7 billion through 2025.
How it works?
Incentives vary by vehicle class and weight. For example, you can benefit from $10,000 on the purchase of a van or pickup truck weighing 3856 to 4536 kg. This financing can reach $200,000 for the purchase of a motor coach. In addition, only new vehicles will be taken into account.
Transit buses, school buses, recreational vehicles (RVs) or off-road vehicles may, however, be excluded from this program.
It is possible to benefit from these incentives for vehicles leased for at least 12 months. In this case, the calculation of the amount is done pro rata, according to the duration of the rental contract, which must be less than 48 months.
“The incentive will be applied at the point of sale by the dealership or other authorized sellers such as original equipment manufacturers (OEMs) or vehicle finishers/distributors. It will appear directly on the Bill of Sale or Lease Agreement for qualifying medium and heavy ZEV vehicles purchased/leased on or after the qualifying date of the vehicles. The dealer must apply the taxes and fees to the purchase or lease before applying the incentive,” says Transport Canada on its website.
The detailed list of eligible vehicles is available online.
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