Are there rebates for hybrid cars in Canada?

Are you thinking about buying a hybrid or electric car but worried about the cost? You are not alone. Luckily for us, the Government of Canada understands that the higher initial cost of zero-emission vehicles (ZEVs) can be a barrier. That’s why there are provincial and federal rebates to help reduce the price difference between electric/hybrid and gas vehicles. However, the rebates vary based on where in Canada you live, the type of green vehicle you’re buying, and even its price.

Which vehicles are eligible for electric vehicle (EV) rebates in Canada?

Plug-in hybrid electric vehicles (PHEV) or battery electric vehicles (BEV) in Canada can qualify for provincial and/or federal electric vehicle (EV) rebates. However, if you are thinking about buying a hybrid-electric vehicle (HEV), you will not be eligible for these rebates.

So, to answer the question: “Are there rebates for hybrid cars in Canada?” The answer is yes, as long as you own a plug-in hybrid electric vehicle.

Not all provinces provide rebates, but every qualifying electric car owner in Canada can apply for a federal rebate of up to $5,000 if they meet the requirements. To see if your vehicle qualifies for the federal program, you can check the make and model in Transport Canada’s EV rebate database.

How do electric vehicles (EVs) differ?

Electric vehicles are any vehicle with an electric motor, but there are different types:

• Battery-powered electric vehicles (BEVs) run only on electricity.
• Fuel cell electric vehicles (FCEVs) make their own electricity using hydrogen, but they are rare because there are few hydrogen refuelling stations.
• Hybrid vehicles (HEVs) have both a gasoline engine and an electric motor. They can run on gas, electricity, or both, but they don’t get plugged in.
• Plug-in hybrids (PHEVs) have a larger battery. They can be plugged in and charged to run on electricity alone until the battery runs out, at which point they switch to gas-electric operation.

Rebates in Canada are available for BEVs, FCEVs, and PHEVs but not for regular HEVs.

What is the federal iZEV program?

The iZEV Program offers discounts at the time of purchase for people who buy or lease a qualifying zero-emission vehicle (ZEV) as long as funding is available. Only the eligible vehicles listed on Transport Canada’s EV rebate database qualify for this discount, and they must be bought or leased for at least 12 months after the eligibility date.

For leased vehicles, the full $5,000 rebates apply to 48-month leases. Rebates are smaller for shorter leases:

• 12 months - $625.
• 24 months - $2,500.
• 36 months - $3,750.

Only new vehicles, including demo vehicles with less than 10,000 km, qualify for the rebate. Consumers can get one rebate per year.

The iZEV program will run until March 31, 2025, or until all available funds are used up, whichever comes first.

iZEV program requirements

These are the iZEV program requirements:

• For electric or plug-in hybrid cars, the base model must cost less than $55,000, and the highest-priced version should not exceed $65,000.
• For family cars, such as a pickup truck, sport utility vehicle (SUV), minivan, van, or specialty vehicle, the base model must cost less than $60,000, and the highest-priced version should not exceed $70,000.

Types of rebates

There are two types of rebates for the iZEV program:

1. A battery electric vehicle, hydrogen fuel cell vehicle, and long-range plug-in hybrid vehicle can get up to $5,000. These longer-range plug-in hybrids have an electric range of 50 km or more.
2. Short-range plug-in hybrid vehicles can get up to $2,500. These shorter-range plug-in hybrids have an electric range of less than 50 km.

How to receive the iZEV rebate

The dealership will apply the rebate when you buy or lease the car after confirming your eligibility. The dealership will handle all paperwork to get reimbursed for the rebate; customers cannot request reimbursement themselves.

You will need to fill out the Consumer Consent Form to verify eligibility. Once confirmed, you will need to complete the Incentive Received Form, and the rebate will be shown on your bill of sale or lease agreement. Taxes and fees must be applied to the purchase before the rebate is applied. The federal rebate will be combined with any provincial or territorial rebates available.

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What other rebates for EVs are available in Canada?

In addition to the federal iZEV program, some provinces offer their own rebates for EV and plug-in hybrid-electric vehicles. However, it all depends on where you live because not all provinces offer additional rebates. Currently, only British Columbia, Quebec, Newfoundland & Labrador, New Brunswick, Nova Scotia, Prince Edward Island, and the Yukon offer their own rebate programs. In this section, we'll examine each province's rebate program for EV and plug-in hybrid-electric vehicles in detail:

British Columbia

British Columbia (BC) offers up to $4,000 for buying or leasing a fully electric vehicle or plug-in hybrid. The price cap matches the federal iZEV program, ranging from $55,000 to $70,000. Leased vehicles receive the full rebate for 48-month leases, with smaller amounts for 12-, 24-, or 36-month leases. You can only get one rebate, no matter how many vehicles you buy, and the amount depends on your income. The subsidy amounts vary by vehicle type:

• Up to $4,000 for buying or leasing a BEV or hydrogen fuel cell vehicle.
• Up to $4,000 or up to $2,000 for plug-in hybrids, depending on battery capacity.

With BC’s SCRAP-IT program, if you scrap your old gas vehicle, you can also qualify for one of the following rebates:

• Up to $500 on a qualifying new or used BEV.
• Up to $400 on a new or used PHEV.
• $500 car share credit.
• An 11-month ECOPASS.
• Various transit link passes.
• $300 in cash when you scrap a qualifying vehicle.
• $100 in cash when you scrap a non-qualifying vehicle.

You can also get up to 50% off the cost (up to $350) of buying and installing a Level 2 home charger.

Quebec

Quebec residents can get up to $7,000 for buying or leasing a fully electric or plug-in hybrid vehicle. Dealers can apply for the subsidy at the time of purchase, or you can apply for the rebate yourself. You can apply for up to three rebates for EVs each year.

Here is the Quebec list of eligible new vehicles. The subsidy amounts vary by vehicle type:

• Up to $7,000 for fully electric vehicles and hydrogen fuel cell vehicles with a price under $65,000.
• Up to $5,000 or up to $2,500 for plug-in hybrids, depending on battery capacity, with a price under $65,000.
• $3,500 for a used all-electric vehicle.
• $2,000 for an electric motorcycle.
• $500 for an electric scooter (limited-speed motorcycle).

Quebec also offers $600 toward the purchase and installation of a Level 2 home charging station.

Newfoundland & Labrador

Newfoundland & Labrador offers the NL Hydro EV Rebate program. Residents can receive up to $2,500 for buying or leasing a fully electric or plug-in hybrid vehicle. Leased vehicles qualify if the lease is at least 48 months long. With the NL Hydro EV Rebate program, there is no price limit on qualifying vehicles, and used vehicles must be bought from a licensed dealer. The subsidy amounts vary by vehicle type:

• Up to $2,500 for buying or leasing a new or used BEV.
• Up to $1,500 for a new or used plug-in hybrid.

The Newfoundland and Labrador Credit Union (NLCU) also offers an Eco-Friendly Vehicle Loan Rebate across the province. If you’re buying a hybrid or electric vehicle that is up to five years old, you may qualify for a 2.5% rebate. However, if you have a checking account and direct deposit with NLCU, you may qualify for a 3% rebate. The maximum rebate is $1,500.

New Brunswick

Through Plug-In NB, residents of New Brunswick can get up to $5,000 or buy a fully electric or plug-in hybrid vehicle. Leased vehicles will receive the full rebate for 48-month leases, with smaller amounts for 12-, 24-, or 36-month leases. The price cap also matches the federal iZEV program, ranging from $55,000 to $70,000. Used vehicles must be bought from a dealer and cannot have received a previous provincial rebate. The subsidy amounts vary by vehicle type:

• Up to $5,000 for buying or leasing a BEV.
• Up to $5,000 or up to $2,500 for plug-in hybrids, depending on battery capacity.
• Up to $2,500 for a used BEV.
• Up to $1,000 for a used plug-in hybrid.

Nova Scotia

Nova Scotia has the Electrify Nova Scotia Rebate Program. Residents can get up to $3,000 for buying or leasing a fully electric or plug-in hybrid vehicle. Leased vehicles qualify for the full rebate for 48-month leases, with smaller amounts for 12-, 24-, or 36-month leases. The price cap also matches the federal iZEV program, ranging from $55,000 to $70,000. Used vehicles must be purchased from a dealer and must not have previously received a provincial rebate. The subsidy amounts vary:

• Up to $3,000 for buying or leasing a BEV.
• Up to $3,000 or up to $2,000 for plug-in hybrids, depending on battery capacity.
• Up to $2,000 for a purchased, not leased, used BEV, with a price under $55,000.
• Up to $1,000 for a purchased, not leased, used plug-in hybrid, with a price under $40,000.
• $500 for qualifying e-bikes.

Prince Edward Island (PEI)

PEI’s Electric Vehicle and Charging Incentive offers islanders up to $5,000 for buying or leasing a fully electric or plug-in hybrid vehicle. Leased vehicles get the full rebate for 48-month leases, with smaller amounts for 12-, 24-, or 36-month leases. Plus, islanders who use the PEI EV Incentive for either BEVs or PHEVs will get a $750 rebate to help with buying and installing a Level 2 charger or to cover charging costs if they can’t install a charger. The subsidy amounts vary by vehicle type:

• Up to $5000 for buying or leasing a new or used BEV.
• Up to $2,500 for plug-in hybrids.

Yukon

The Yukon government offers up to a $5,000 rebate for fully electric or new plug-in hybrid vehicles. Leased vehicles get the full rebate for 36-month leases, with smaller amounts for 12- or 24-month leases. Yukon residents can receive up to 2 rebates during the program’s duration. The subsidy amounts vary by vehicle type:

• Up to $5,000 for buying or leasing a new BEV.
• Up to $5,000 or up to $3,000 for new plug-in hybrids, depending on battery capacity.

You might receive the rebate automatically when buying your vehicle from a local dealership. If you don’t get the rebate from the vendor, you can apply online within one year of the purchase.

Car insurance for electric vehicles

Now that you’re familiar with the types of rebates you’ll receive if you decide to purchase an electric vehicle, let’s get into the nitty gritty of electric vehicle and hybrid car insurance.

The good news is that EV or hybrid car insurance is just like any other car insurance.

You need the same mandatory coverage, like third-party liability coverage and accident benefits coverage, and you have the same optional coverage choices, like collision and comprehensive coverage. The only difference is that your insurance company will consider a few more factors than with a traditional gas-powered vehicle.

For example, rates might differ for hybrids with gas engines and batteries compared to those using battery cells to draw power from the motor. Since many hybrids have both gas engines and batteries, the insurance company might ask how you usually power your car or which mode you use more to assess the risk. Plus, it’s expensive to replace an electric vehicle battery, so your insurance will consider that, too.

Get comprehensive car insurance from BrokerLink

At BrokerLink, our licensed experts can help you get the car insurance you need at a competitive price. Even though hybrid and electric cars are still relatively new, our advisors have the experience and expertise to guarantee you receive the best coverage for your electric vehicle or hybrid. No matter what type of EV you drive, we can help you find a policy that meets your needs, lifestyle, and budget.

Give us a call to get started today. Visit us at any of our locations across Canada for an in-person quote. No matter how you prefer to get in touch, we can’t wait to hear from you!

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