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Electric car buyers get boost with $5,000 incentive for consumers and tax write-offs for business

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Finance Minister Bill Morneau would really like it if your next car was electric, and in his 2019 budget, he allocated $435 million for zero-emissions vehicles.

“Building a better Canada also means helping people be part of the clean economy—with energy bills that they can afford, and cleaner ways to get around,” Morneau said in his budget speech.

For starters, the federal government is going to spend $300 million over three years to offer a $5,000 purchase incentive for people who buy electric or hydrogen fuel cell vehicles, so long as the retail price of the vehicle is less than $45,000.

How exactly this will work remains to be seen; with the budget document simply promising “program details to follow.”

Moreover, for business the government is offering substantially more generous tax write-offs if they buy vehicles that are electric, plug-in hybrid, or hydrogen fuel cells.

Businesses will be able to write off capital costs for eligible zero-emission vehicles in the year that the vehicle was purchased, instead of writing off slowly over time.

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.

On top of all the incentives for individuals and businesses to buy zero-emission vehicles, the budget is 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.”

On top of all that, 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.”

The same section of the budget announcing subsidies for electric vehicles also promised help control unaffordable electricity rates.

“For too many Canadians, the rising cost of electricity is a source of economic anxiety. No one should have to choose between heating their home in winter and being able to afford the other things that provide a good quality of life — things like healthy, nutritious food, or clothes for family members,” the budget document says. “Yet the fact remains that in many Canadian cities, the cost of electricity is rising much faster than growth in household disposable income — making it hard for many people to make ends meet.”

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