The Canadian government plans to propose a new incentive for businesses wanting to buy zero-emission vehicles and automotive equipment.

The intention is to extend the existing zero emission vehicle incentive to include off-road vehicles. This incentive would provide a 100% write-off of the purchase cost of eligible zero-emission vehicles and automotive equipment in the year they are put in use.

Under this new incentive, to be eligible for an income tax deduction of 100%, vehicles would need to be available for use before 2024. The deduction allowance would decrease to 75% for 2024 and 2025, and would decrease to 55% for 2026 and 2027. Vehicles not available for use before 2028 would not be eligible for the accelerated deduction allowance.

This incentive is meant to encourage businesses, including in sectors like mining, transportation, and agriculture, to take advantage of opportunities to upgrade to newer, cleaner technologies.

The proposed tax relief is estimated to be worth $62 million over the 2020-21 to 2024-25 period.

Since March 19, 2019, businesses have been able to claim 100% of the cost of the purchase of on-road passenger vehicles up to a limit of $55,000 per eligible vehicle purchase. 

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