The federal government is preparing to launch a new rebate program to help Canadians afford electric vehicles (EVs), months after its previous initiative, the Incentives for Zero-Emission Vehicles (iZEV) program, ran out of funding.
Environment and Climate Change Minister Julie Dabrusin confirmed this week that a replacement consumer rebate is in development. While she did not confirm whether the new program would retain the iZEV name, she assured Canadians that a new incentive is coming.
“There will be a consumer rebate,” Dabrusin told The Canadian Press after Tuesday’s question period in the House of Commons. “Will it be named iZEV? That I can’t tell you.”
The original iZEV program, launched in 2019, offered up to $5,000 off eligible battery-electric, hydrogen fuel cell, and plug-in hybrid vehicles. It proved so popular that its budget was exhausted by January 12, 2025, forcing Ottawa to pause the incentive ahead of the federal election, which puts its future in jeopardy.
The pause in rebates has had a noticeable impact on EV sales across Canada. According to the latest data, ZEVs accounted for just 9.7% of new light-duty vehicle registrations in Q1 2025—down significantly from 18.9% in Q4 2024 and 12.5% in Q1 2024. The impact was amplified by the removal of rebates in British Columbia, and the pause of rebates in Quebec, Canada’s two most electrified provinces.
Beginning in 2026, Canada’s Electric Vehicle Availability Standard will require that at least 20% of new light-duty vehicle sales be zero-emission. That percentage will rise each year until 2035, when all new vehicles sold must be zero-emission models.
No timeline has been given for the launch of the new rebate, but federal officials say they are working closely with provinces like Ontario and industry partners to ensure the new program supports both consumers and Canadian jobs.
While the return of an EV rebate program is welcome news for Canadian consumers, it remains uncertain whether Tesla will be included. Transport Minister Chrystia Freeland previously stated the automaker would be excluded from future incentives while U.S. tariffs remain in place. This follows a controversy in which Tesla filed $43 million in rebate claims during the final weekend of the iZEV program, prompting the federal government to freeze payments and launch an investigation.
In response, Tesla defended its actions in a letter to Transport Canada, asserting the claims were valid under program rules and criticizing the government’s communication, while highlighting its investments in Canadian jobs and clean energy.
