The political context to electric vehicles and incentives

December 6, 2018 at 10:57 UTC

By Michael van der Galien, Jody Wilson-Raybould, Adele Pelchat and Brian Wynn, Special to The Globe and Mail

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OTTAWA – Toronto Mayor John Tory has committed to becoming carbon neutral by 2030.

After committing to new ridership targets in order to fulfill the same goal last month, he will also consider proposals to accelerate his target by exempting cars from a controversial new home retrofit rebate program and raising the monthly electric vehicle rebate from $100 to $200, according to a Wednesday Finance Committee report.

The guidelines for the bonus rebate program were put in place by the province’s former Liberal government, which is now run by the Progressive Conservatives under Premier Doug Ford.

There’s a proposed amendment to the subsidy rules that would allow home renovations undertaken with the purchase of a home or condo to be eligible for the tax credit, if these renovations substantially improve the energy efficiency of a home, which requires serious structural changes, but the rebate would be non-refundable.

It would also create a “non-refundable” rebate with the purchase of a new home or condominium that doubles the maximum rebate available to new residential homeowners of $100.

Tory’s comments on Tuesday suggest he will accept the amendment.

The amendment to the program has been criticized as “flawed” by architects and contractors, who argue it will make renovation more expensive.

A plan to make electric vehicles eligible for the rebate program has also been recommended by the administration of the fund. The proposal is part of the Department of Finance’s request for proposals for energy efficiency in the Toronto area.

The department is looking for “significantly less money than was spent on the first year of the program,” said a copy of the proposed solicitation obtained by The Globe and Mail.

Ontario is the first jurisdiction in North America to offer a rebate program to subsidize the purchase of electric vehicles.

The administration’s proposal seeks proposals for EVs that start at under $17,000.

The rebate program was implemented by the Liberal government to drive uptake of electric vehicles, but it faced political opposition. Ford recently promised to scrap the program, calling it “unsustainable.”

On Tuesday, the Ontario Motor Vehicle Association applauded the development of a new plan to subsidize the purchase of new electric vehicles, although it suggested the proposal needs further work.

The Ontario MPCA called on the auto industry to “mobilize toward a lower carbon future by making investments and engineering breakthroughs to reduce pollution and emissions”

The organization said the auto industry must develop fuel efficiency standards that are “more ambitious and sustainable for our own interest as a province and citizens.”

But the Automobile Association of Ontario said the program is an unwise use of money, which could instead be spent on plug-in hybrids and charging stations.

“These are early adopters and it is the reverse of what they are asking for: subsidies,” said spokesman James Palmer.

The association also criticized the subsidies as skewing the program towards electric vehicles, which are not particularly efficient.

“Charging stations aren’t subsidized, they should be encouraged,” he said.

The Ontario MPCA noted that according to a 2018 report from Canada’s parliamentary budget officer, the overall cost of the plug-in grant program, and a subsequent plan to subsidize the sharing of electric vehicles with co-workers, were about $30-million in fiscal 2018, about 0.0033 per cent of provincial government spending that year.

“With continued increases in greenhouse gas emissions and a population forecast to be over 10 million in 2030 and almost 17 million in 2050, implementing these subsidies will provide an essential support in achieving climate change targets,” the association wrote.

The meeting to discuss the rebates takes place Thursday, Dec. 6, at 1:30 p.m.

The full agenda for the meeting is available online.

Canada does not have a carbon tax.

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