Canada’s Incentives for Zero-Emission Vehicles Program Set to End by March 31, 2025, or Maybe Sooner

The federal government’s Incentives for Zero-Emission Vehicles (iZEV) Program, which has been pivotal in boosting the adoption of electric and plug-in hybrid vehicles, is nearing its end. According to a recent government announcement, the program will pause by March 31, 2025, or sooner if its remaining funds are fully utilized.

The program, launched in 2019, has supported the purchase or lease of over 546,000 ZEVs, contributing to a significant rise in Canada’s zero-emission vehicle market share—from 3.1% in 2019 to 11.7% in 2023 and 14.2% in the first three quarters of 2024. However, with $71.8 million in funding left as of January 10, 2025—enough to support approximately 16,000 more ZEV purchases—the program’s looming pause is sparking concern.

Electric Mobility Canada (EMC), a leading advocacy group for sustainable transportation, has criticized the government’s decision, warning it could jeopardize Canada’s goal of achieving a 20% ZEV sales target by 2026. “This move creates uncertainty and risks derailing the momentum Canada has built in transitioning to cleaner transportation,” an EMC representative stated.

The situation echoes developments in Quebec, where the popular Roulez vert ZEV incentive program has also run out of funding. Following a surge in ZEV purchases, the program will be suspended starting February 1, 2025. While Quebec’s Ministry of Environment and Sustainable Development has expressed hope for its resumption after the provincial budget announcement in April, there is no guarantee of its return.

The double blow of federal and provincial program pauses is expected to significantly slow ZEV sales in 2025, potentially undermining Canada’s climate targets. Experts emphasize the need for policy continuity to maintain consumer confidence and ensure sustained growth in the ZEV market.

Despite the challenges, Canadian businesses and organizations can continue benefiting from the Incentives for Medium- and Heavy-Duty Zero-Emission Vehicles (iMHZEV) Program. This initiative, which supports the purchase or lease of zero-emission trucks, remains available until March 31, 2026, provided funds last.

As ZEV advocates push for renewed funding and more robust policies, Canada faces a critical juncture in its climate strategy. The success of programs like iZEV demonstrates the potential for accelerated adoption of clean technologies, but sustaining progress will require long-term commitments and collaboration across all levels of government.