The federal government’s newly relaunched electric vehicle (EV) rebate program is facing immediate scrutiny, as Canadian auto dealerships report outstanding claims from the previous iteration remain unpaid. While consumers can now access rebates of up to , the program’s launch is shadowed by concerns over delayed reimbursements, potentially undermining confidence in the initiative.
The program offers up to $5,000 for the purchase of EVs priced under $50,000, and $2,500 for plug-in hybrids. The return of the rebates is generally welcomed by dealerships, but the delayed payout of previous claims is raising red flags. The portal for dealerships to submit reimbursement requests won’t open until April, leaving many dealers exposed and wary of repeating past experiences.
Dean Woods, sales manager at a Kia dealership in Grimsby, Ontario, expressed his apprehension. “It’s a little worrisome,” Woods said. “Obviously my antlers are a little bit more raised with what’s going on, and I’m going to be on top of every claim, just because I don’t trust the system anymore.” His dealership is currently out $20,000 in unpaid rebates from 2024 sales, after Transport Canada refused reimbursement due to the program’s prior closure.
The issue stems from the mechanics of the rebate system. Dealerships are expected to apply the rebate amount directly at the point of sale and then seek reimbursement from the government. This effectively turns dealerships into financiers for the federal program, a situation that smaller, independent businesses find particularly challenging. Huw Williams, a spokesperson for the Canadian Automobile Dealers Association, highlighted this burden, stating that dealers are “fronting the money on behalf of the federal government, which has an enormous treasury.”
The Canadian Automobile Dealers Association has been advocating for a more streamlined and reliable reimbursement process. Williams noted that some dealers have had claims rejected even after submitting supporting documentation, leading to a sense of futility. “We have some dealers who have brought us cases to look at and submit to Transport Canada, which we’ve done, and after they’ve been rejected, we’ve then been rejected,” he said. “And we have others who have spoken to us and are unsure that they’re even going to submit, feeling that there’s not a hope for them getting paid.”
Transport Canada acknowledged the concerns, stating that it temporarily reopened the rebate program last summer to allow for the submission of outstanding claims. A spokesperson, Flavio Nienow, said in a statement that “All eligible claims for reimbursement that were submitted to Transport Canada — either before the program pause or during the temporary administrative window last summer — have been paid.” However, the department did not immediately address specific cases where errors in submission forms led to claim rejections.
The current situation underscores a broader challenge in government-led incentive programs: the administrative burden placed on private sector businesses. While the intent of the EV rebate is to accelerate the adoption of electric vehicles and reduce carbon emissions, the delayed reimbursements create a financial strain on dealerships and potentially discourage participation. The program ran from 2019 to 2025, pausing in January 2025 due to funding exhaustion.
The reintroduction of the program, backed by $2.3 billion in funding, represents a renewed commitment to the EV transition. However, the success of this initiative hinges on addressing the reimbursement issues that plagued the previous program. Williams argues that Transport Canada should prioritize resolving outstanding claims as a gesture of good faith. “Let’s start it in good faith. Get people, dealers — who had fronted money to consumers — paid, and let’s charge forward together to get EVs across the country.”
The timing of these concerns is particularly noteworthy, as the federal government, under Prime Minister Mark Carney, has been recalibrating its climate policies. Recent announcements include the cancellation of the consumer carbon price and the suspension of an emissions cap on the oil and gas sector. The EV rebate program, alongside a new credit system for automakers producing vehicles in Canada and a $1.5 billion investment in EV infrastructure, is presented as a key component of a broader strategy to transform Canada’s auto sector and address U.S. Tariffs. However, the effectiveness of these measures in achieving emissions reduction targets remains to be seen, with government officials promising to publish modelling in the coming months.
The automotive industry is betting on the rebate revival to stimulate sales, but the lingering issue of unpaid claims casts a shadow over the program’s launch. The government’s ability to swiftly and efficiently reimburse dealerships will be crucial in restoring trust and ensuring the program’s long-term success.
