The federal government is preparing to reintroduce consumer rebates for electric vehicles after its previous program ran out of funding earlier this year. Environment Minister Julie Dabrusin confirmed Tuesday that a renewed rebate initiative is in the works, though details on its structure or name remain uncertain.
Speaking after question period in the House of Commons, where she faced intense criticism from Conservatives over the government’s electric vehicle (EV) policies, Dabrusin said Canadians can expect the return of federal incentives. “Will it be named iZEV? That I can’t tell you. But there will be a consumer rebate,” she said, referencing the now-paused Incentives for Zero-Emission Vehicles program.
Launched in 2019, the iZEV program provided up to $5,000 off the purchase of a new EV and supported more than 500,000 sales before its funding ran dry in January 2025. The program had cost Ottawa nearly $3 billion, and its abrupt halt coincided with a noticeable decline in EV sales across the country. According to Statistics Canada, zero-emission vehicles accounted for just 8.11 per cent of new car sales in Q1 2025, down from 16.5 per cent in the final quarter of 2024. By April, the rate dropped further to just 7.53 per cent.
The decline has fueled industry concern and political pushback against the government’s ambitious EV mandate, which requires all new light-duty passenger vehicles sold in Canada to be zero-emissions by 2035. Beginning in 2026, automakers must ensure that at least 20 per cent of their new vehicle offerings meet this standard, with the quota increasing annually until full compliance.
While the Liberals say the policy is essential to reduce emissions and combat climate change, critics argue it places unfair burdens on families and workers in Canada’s auto sector, especially amid rising vehicle prices and ongoing trade tensions with the United States. During Tuesday’s debate, Lethbridge MP Rachel Thomas accused the government of ignoring the practical needs of Canadians. “If the Liberal government is truly going to stand with auto workers, then stop making the very vehicles that they’re producing illegal,” she said.
Auto manufacturers, too, have called for the mandate to be paused or repealed, warning that supply-chain instability and softening demand are making the transition to EVs more difficult.
Despite the criticism, Minister Dabrusin defended the policy, stating it has been in place since 2023 and that now is not the time to reverse course, especially in the face of U.S. tariffs affecting Canada’s auto exports. She emphasized that used gas-powered vehicles will still be available after 2035 and that plug-in hybrid models will remain an option under the mandate.
As the government finalizes its rebate strategy, many industry observers say restoring consumer incentives will be critical to getting EV adoption back on track and ensuring a smoother transition to a greener auto industry.