Finance Minister Bill Morneau presented the 2019 Federal Budget on March 19th which included the $435 million allocated for zero emissions vehicles. The budget document promises “program details to follow.” The government also promises businesses substantially greater tax write-offs if they buy vehicles that are electric, plug-in hybrid or hydrogen fuel cells. Businesses will be able to write up capital costs for eligible zero-emission vehicles in the year that the vehicle was purchased, instead of writing off slowly over time.  

 To start, Transport Canada will administer the $300 million incentive program which offers a $5000 purchase incentive for people who buy electric or hydrogen fuel cell vehicles with a retail price less than $45,000.

 Zero-emission vehicles will also get a higher deductible rate; businesses can write off $55,000 for electric and hydrogen vehicles, instead of $30,000 for gas engines.

Canada has set a target for 2040 that all vehicles sold will be zero-emission and by 2025 the government wants 10 per cent of vehicles to be zero-emission.

 The 2019 Federal budget is also committing $130 million over five years to build new recharging and refuelling stations in workplaces, public parking spots, commercial and multi-unit residential buildings and remote locations. In addition, Morneau’s budget promises to spend $1 million each year for the next five years “to work with auto manufacturers to secure voluntary zero emission vehicle sales targets to ensure that vehicle supply meets increased demand.”

 Automotive manufacturers and parts suppliers can access funding through the Strategic Innovation Fund, which was recently provided $800 million in additional funding through the 2018 Fall Economic Statement for investment in zero emission vehicles

 Lastly, the government plans to enhance its road safety transfer payment program. Road safety and transportation requirements vary among Canadian provinces and territories, creating barriers and inefficiencies for businesses that transport goods by road.  Transport Canada will support provinces and territories in working towards improved alignment of these requirements, including for the use of autonomous and connected vehicles. Funding will also be made available to other stakeholders, such as academia and industry associations, to identify innovative road safety options, including for emerging technologies.    

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