The Government of Canada has said that it has paused the federal EV incentive program as all funds have been fully committed.

On Friday, January 10, 2025 the government announced that the program would be paused as of March 31, 2025, or when funds were exhausted, but a subsequent update on the Ministry of Transport website states “The Incentives for Zero-Emission Vehicles (iZEV) Program funds have been fully committed. Consequently, the iZEV Program has now officially paused. “

The program offered $5000 purchase incentives to BEVs and PHEVs with more thna 50km range, and $2500 to PHEVs with a shorter batter range.

The announcment of the pause was made officially by Minister of Transport and Internal Trade Anita Anand.

“I am delighted to see the success of the iZEV Program. Since 2015, our Government has been committed to building a greener economy and combatting climate change,” said the Minister in a written statement.

“We will continue to engage with industry, environmental groups, and across jurisdictions to foster collaboration in decarbonizing the country’s transportation sector and becoming a global leader in zero-emission vehicles.”

The program had been scheduled to pause on March 31, 2025–it has been in place since 2019– but had widely been expected to be renewed in the next budget cycle, at least before recent developments on the political front.

“As part of the federal Zero Emission Vehicle Council (ZEV Council), we knew the end of EV purchase incentives was coming,” said JF Champagne, President and CEO of AIA Canada.

“This change will likely slow down how quickly Canadians adopt EVs, which could delay the impact on the auto care sector as it prepares to service electric and zero-emission vehicles. The pace of this transition will shape how the industry adapts in the coming years.”

The announcement comes at a time of expected change in the political landscape. Canada’s Parliament is currentl prorogued (out of session) and is scheduled to come back into session March 24, just prior to a mandated budget vote. It is also expected that at that time a vote of non-confidence is likely, forcing an election.

It also comes as Quebec has recently announced a pause in its provincial incentive program in February and March, even as it has reduced incentives starting January 1 in a phase out program. Some are sceptical that the program will be renewed at the end of March, the end of the province’s budget cycle.

In B.C., the price threshold for EVs to qualify for the provincial incentive was also reduced in 2024 with little warning.

The recent announcemens were decried as destabilizing by the Canadian Automobile Dealers Association.

“This decision is particularly frustrating for dealers, who have done their part in building the infrastructure and resources required to support the EV transition,” said Tim Reuss, President and CEO of CADA. 

“Now we are seeing governments at both the federal and provincial levels decommitting from a difficult and costly process that they, themselves, instituted. There is obvious hypocrisy in imposing ambitious ZEV targets and affiliated penalties on the industry and consumers when the government is showing a clear lack of motivation and support to meet these goals.”

“This announcement also highlights a troubling lack of preparedness and foresight. By failing to secure adequate funding for a transition it actively promoted, the Federal government has created uncertainty for both consumers and the automotive industry. Cutting short such a critical initiative while maintaining aggressive 2025 and 2030 ZEV targets send a contradictory and destabilizing message,” added Reuss.

According to the ministry, more than 546,000 vehicles have been incented through this program since it began, helping Canada reach a new ZEV market share of 11.7% in 2023, a significant increase from 3.1% in 2019. New ZEV market share reached 14.2% in the first three quarters of 2024, including a new record high of 16.5% in the third quarter of 2024.

Canadian businesses and organizations purchasing or leasing zero-emission trucks can continue to benefit from the Incentives for Medium- and Heavy-Duty Zero-Emission Vehicles (iMHZEV) Program, which continues until March 31, 2026, subject to funding availability.