Electric Vehicle Incentives

Electric vehicles are making strides in Quebec. Car manufacturers are helping to increase the momentum of electric vehicles by offering models that are more affordable and have increasing range. Contrary to popular belief, these vehicles have sufficient power to withstand Quebec winters and are seemingly more affordable when considering the significantly lower maintenance costs as compared to gas-powered models. The commercial benefits aside, the mere satisfaction of driving a vehicle without discharging any greenhouse emissions is unparalleled.

The momentum is not only being driven by car manufacturers, but also increasingly by the governments. The Quebec government has vocalized its determination to reduce the carbon footprint of personal transport by focusing on electric vehicles. In addition, the 2019 federal budget proposed a number of measures aimed at encouraging both Canadian individuals and businesses to adopt zero-emission and plug-in hybrid vehicles.

There are currently over 2,000 charging stations across Quebec, and this number is expected to increase in the near future based on plans with Hydro-Québec and the Electric Circuit to make access to various forms of charging possible.

Though these goals are quite ambitious, the Quebec government intends to accomplish these objectives through its various incentive programs. Specifically, with respect to the purchase or lease of new electric vehicles, the government offers a rebate of $8,000 for vehicles with a value of less than $75,000, and $3,000 for vehicles with a value between $75,000 and $125,000. Similar rebates are offered for the purchase of new rechargeable electric hybrid vehicles with a suggested manufacturer’s price below $75,000. Further, the Quebec government also offers financial assistance to Canadian businesses of up to $25,000, subject to certain conditions, under its “Branché au travail” program for the purchase and installation of charging stations for electric vehicles at the workplace. The incentives offered by Quebec are among the most generous in North America, making such vehicles more appealing for drivers.

The federal government is driving efforts towards a lower carbon footprint as well, with the introduction of several new initiatives. In an effort to be leaders in the field, the Canadian government has proposed a program of over $300 million of incentives over the next few years with the hope of encouraging 100 per cent zero-emission vehicle sales by 2040. One such incentive is a rebate offered, ranging from $2,500 to $5,000, that is calculated according to the manufacturer’s selling price and the range of the vehicle, and will be available on the purchase or lease of a new zero-emission vehicle until 2022. Specifically, vehicles eligible for this rebate include those with six or fewer seats with a manufacturer’s suggested retail price of less than $45,000, as well as those with seven or more seats with a manufacturer’s suggested retail price of less than $55,000. Canadians who purchase or lease an eligible battery electric, hydrogen fuel cell or longer-range plug-in hybrid vehicle will be eligible for a rebate of $5,000, while an incentive of $2,500 will be available on the purchase or lease of a shorter-range plug-in hybrid vehicle.

In line with these efforts, the 2019 federal budget proposed to create two new classes of depreciable property for zero-emission vehicles, namely Class 54, which is proposed to have a capital cost allowance rate of 30%, and Class 55, which is proposed to have a capital cost allowance rate of 40%. Class 54 is designated for zero-emission vehicles that would otherwise be included in Class 10 or 10.1 (regular automobiles), while Class 55 will include zero-emission vehicles that would otherwise be included in Class 16 (taxicab, automobile used for short-term rental or leasing, and others). Further, the budget proposed the introduction a multiplier for zero-emission vehicles included in Class 54 or Class 55 that become available for use on or after March 19, 2019 and before 2024. This measure would effectively allow for a 100% deduction of their capital cost in the year the property becomes available for use.

Our governments’ vision for a better future is clear, with generous incentives and programs to encourage and facilitate the adoption of zero-emission forms of transport. The driving forces to improve our carbon footprint and reduce greenhouse emissions are in place. It is now up to each of us to take the wheel to make strides for a better tomorrow.

For further information, please contact your Crowe BGK advisor.

About the Author:

Brittany Klumak, CPA Auditor, is a Tax Specialist at Crowe BGK

Connect with her:  [email protected]