The federal government is expected to unveil a plan today to reimburse Canadian auto dealers who were left shouldering the cost of unpaid electric vehicle (EV) rebates following the sudden suspension of the popular Incentives for Zero-Emission Vehicles (iZEV) program earlier this year.
Transport Canada halted the iZEV program in January after its five-year budget of nearly $3 billion was depleted. The program, which offered up to $5,000 off the purchase of new zero-emission vehicles, came to an abrupt end just three days after the government had indicated it was nearing closure. That short window left many dealers unable to submit pending rebate claims, forcing them to absorb the costs themselves.
According to the Canadian Automobile Dealers Association (CADA), its 3,500-member dealerships are collectively owed around $11 million. Huw Williams, public affairs director at CADA, described the sudden shutdown as “a shocking series of events,” especially after earlier assurances that the wind-down would be orderly.
Complicating the situation is Tesla’s involvement. The automaker reportedly submitted over $43 million in rebate claims covering 8,600 EVs in the final weekend before the program’s suspension. The sheer size and timing of the submission triggered an investigation by Transport Minister Chrystia Freeland’s office, which paused Tesla-related payments. No further updates on that probe have been provided.
CADA has pressed the government for transparency on Tesla’s rebate claims. Williams noted that questions remain over whether Tesla received prior notice of the program’s end or exploited loopholes. “We don’t know that, and we’re not alleging that, but we think these are reasonable questions to ask,” he said.
Since the iZEV program’s suspension, EV sales have dropped dramatically. Statistics Canada reported that EVs made up 18.29 per cent of all new vehicle sales in December 2024. By January, that figure had plummeted to 11.95 per cent and fell further to 7.53 per cent by April.
Although federal ministers have reiterated their commitment to reinstating EV consumer incentives, no firm timeline has been provided. Automakers warn that continued delays are further dampening sales as consumers hold off in hopes of future rebates.