Quebec's plan to stop subsidizing electrical vehicle purchases gets mixed reviews

The Quebec government is phasing out subsidies for electric vehicles, claiming sales are strong enough without the incentive.

Moshe Lander, a senior lecturer in economics at Concordia University, says it's about time. The province already has a tool in place to encourage more drivers to go electric — fuel taxes.

"If gas starts going for $4 a litre, I think people will quickly start looking for all kinds of alternative means of getting around," Lander said. "EVs would be one of them, but people would also be pushing for an expansion of public transport."

If gas reaches such high prices, companies may revisit the work-from-home model or people may reconsider living so far from work to cut on transportation costs, Lander said.

By putting all the subsidies on one particular product, the playing field is being tilted toward EVs, and people then only have a choice between gas or electric cars rather than all the other means of helping the environment, he said.

Quebec Finance Minister Eric Girard announced in the recent budget that subsidies for electric vehicles and plug-in hybrids would be phased out starting next year, culminating in their complete elimination by 2027.

Currently, Quebec offers rebates up to $7,000 for new fully electric vehicles and up to $5,000 for plug-in hybrids, with used electric vehicles eligible for rebates up to $3,500. However, these subsidies will decrease starting next year before being phased out completely.

Girard cited the program's high cost — approximately $400 million between April 2023 and January 2024 — juxtaposed with its limited reduction in greenhouse gas emissions.

Benoit Charette, minister of the environment, said by late last year, 23 per cent of vehicles sold in Quebec were electric. He said that was more than forecast, and now the government expects prices to come down, even without the subsidy.

But critics say the subsidies were driving up sales.

Louise Lévesque, senior director of policy for Electric Mobility Canada, said Quebec has ample charging-station infrastructure and that, coupled with the rebates, has encouraged consumers to trade in their gas-powered vehicles for those that run on electricity.

Lévesque suggested the government should increase taxes on gas-powered vehicles and then put that revenue into the electric-vehicle rebate program. 

The province aims to ban the sale of new gas-powered cars by 2035, and while EVs are growing in popularity, the adoption rate needs to ramp up quickly in order to achieve that goal, said Lévesque. 

"That's why we think we need to keep these rebates," she said.