Ontario cheers US bill proposing tax breaks for electric vehicles, but local incentives remain

Holly Mackenzie Sutter, The Canadian Press

Posted Friday, August 5, 2022 5:32AM EST

Ontario’s economic development minister says plans to expand the proposed US tax credit on electric vehicle purchases to cover cars made in North America are a boon to the auto sector, but the province is not planning any buyer incentives for local drivers.

Vic Fedele said the conservative progressive government plans to focus on increasing domestic supply, something experts argue is a missed opportunity as the climate and affordability crises converge.

The minister said the proposed US tax credit is welcome news as it will pave the way for Ontario to attract more auto parts makers as it removes potential concerns that Canadian-made products may be excluded from the massive US consumer market.

“It was kind of hanging over everyone’s heads, ‘We’d better look at that before we make any decisions, now that will remove any shadow of doubt,'” Fedele said in a recent interview with The Canadian Press. to track down the manufacturers.

Fedele said the threat of a US tax credit has not stood in the way of recent deals related to the manufacture of electric or hybrid cars, but that some meetings with international auto parts makers that began before the pandemic have been paused in recent years.

However, when asked if the county would consider returning rebates to Ontario buyers looking to purchase an electric vehicle, Fedeli reiterated the government’s transition line: Focus now on production and jobs for auto workers.

“This is where we decided to put our money, on the supply side, and support workers,” he said.

Prime Minister Doug Ford’s recently re-elected Conservative government abolished the province’s cap-and-trade electric car discounts in 2018, shortly after coming to power, and has not brought them back since.

Fedele said the focus is now on increasing production.

“Those discounts that were in place before, if you buy an electric car in Canada and you’re looking for a discount, it’s on a foreign-made car,” he said.

“We want to make cars here, so in order to make cars here, we needed to stimulate the industry and this is where we chose to invest our money.”

Fedeli will not say if there is a point at which the government will consider bringing back the rebates once there is a large Canadian supply of electric vehicles.

Joanna Kyriazis, senior policy advisor at think tank Clean Energy Canada, argued that now is a good time to bring rebates to Ontario buyers.

“Seeing a Ford Premier Ford really misses half of the equation,” she said in an interview. She said the Ford government has “done a fantastic job” in supporting manufacturing, but falls short when it comes to helping residents buy cars.

“Right now, we have an affordability crisis and a climate crisis in the province, and if the Ford government can do more to help Ontarians get money-saving electric cars, it will provide a solution to both.”

She said the buyers’ incentives for Ontarians would benefit the industry as well, as it would encourage more people to start driving electric cars, which “send the right signals” to automakers. She also noted that Ontario will be behind most of the continent in incentives for electric car buyers once the US law becomes law.

It’s also a good time to introduce incentives as consumers are frustrated with the price of gas and may be willing to make the switch if the initial cost of an electric vehicle becomes more affordable, Kyriazis said.

The sudden change in the US bill effectively saved the industry in Ontario, said Flavio Volpi, president of the Auto Parts Manufacturers Association, because the majority of cars made in Canada are sold in the US and automakers are moving their operations toward electric vehicles.

He said his group does not oppose the buyers incentives for Ontarion, but he said it is not critical to keeping the industry going because the US buyers market is much larger and more important.

“We’d be supportive of one of them,” he said, “but…it doesn’t have an impact on car manufacturing in Canada.” “Canada’s auto manufacturing is geared towards the American consumer.”

Daniel Britton, president of Electric Mobility Canada, which promotes electric transport, said the government’s decision to exclude buyer incentives was a mistake.

He warned that because other jurisdictions bring in incentives and mandates, Ontarians may be prevented from purchasing locally made supplies.

“It’s very important that we have rebates in Ontario,” he said.

This report was first published by The Canadian Press on August 5, 2022.

Leave a Comment