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The Government of Canada has announced a new electric vehicle (EV) affordability program aiming to encourage drivers to make the switch.
Prime Minister Mark Carney revealed Canada&#8217;s new automotive strategy on Thursday, which has a strong emphasis on EV manufacturing and strengthening demand for them in the country.
&#8220;Affordability remains one of the top barriers to EV adoption,&#8221; reads the announcement.
That&#8217;s why Canada is launching a new five-year EV affordability program, which offers incentives to consumers and businesses if they buy or lease eligible cars.
According to the government, federal purchase incentives, alongside provincial and territorial measures, have a proven track record of increasing EV purchases. It has helped Canada reach a 15.4 per cent market share in 2024, up from 3.1 per cent in 2019.
<h2>How does the new Canada EV rebate program work?</h2>
<div id="attachment_2240994" style="width: 2570px" class="wp-caption alignnone"><img loading="lazy" decoding="async" aria-describedby="caption-attachment-2240994" class="size-full wp-image-2240994" src="https://images-dh-production-baselayer.dailyhive.com/uploads/2026/02/shutterstock_1052210918-scaled.jpg" alt="Canada EV" width="2560" height="1832" srcset="https://images-dh-production-baselayer.dailyhive.com/uploads/2026/02/shutterstock_1052210918-scaled.jpg 2560w, https://images-dh-production-baselayer.dailyhive.com/uploads/2026/02/shutterstock_1052210918-500x358.jpg 500w, https://images-dh-production-baselayer.dailyhive.com/uploads/2026/02/shutterstock_1052210918-1024x733.jpg 1024w, https://images-dh-production-baselayer.dailyhive.com/uploads/2026/02/shutterstock_1052210918-1536x1099.jpg 1536w, https://images-dh-production-baselayer.dailyhive.com/uploads/2026/02/shutterstock_1052210918-2048x1466.jpg 2048w, https://images-dh-production-baselayer.dailyhive.com/uploads/2026/02/shutterstock_1052210918-1200x859.jpg 1200w" sizes="(max-width: 2560px) 100vw, 2560px" />Nadezda Murmakova/Shutterstock</div>
The rebate will only apply to the purchase or lease of EVs that cost up to $50,000.
&#8220;To support the Canadian automotive industry, the transaction value eligibility cap will not apply to Canadian-made EVs,&#8221; the announcement noted.
Canadians will be offered incentives up to $5,000 for battery electric and fuel-cell electric vehicles, and up to $2,500 for plug-in hybrid electric vehicles (PHEV).
The rebates will decline over time. Canadians buying battery electric and fuel-cell EVs could get a rebate of up to $5,000 in 2026, $4,000 in 2027, $3,000 in 2028, $3,000 in 2029 and $2,000 in 2030.
Canadians who purchase PHEVs could get a rebate of up to $2,500 in 2026, $2,000 in 2027, $1,500 in 2028, $1,500 in 2029, and $1,000 in 2030.
&#8220;Eligible EVs and PHEVs will be manufactured in Canada or imported from countries where Canada has a free trade agreement,&#8221; reads the announcement. &#8220;It is projected that over 840,000 new EVs would be incentivized through the program.&#8221;
The new Canada EV rebate program will kick in on Feb. 16, 2026, so those with plans to buy an electric vehicle may want to wait to cash in on the incentive.
This program comes after the federal government agreed to a new <a href="https://www.pm.gc.ca/en/news/news-releases/2026/01/16/prime-minister-carney-forges-new-strategic-partnership-peoples" target="_blank">strategic partnership with China</a>, allowing up to 49,000 Chinese EVs into the Canadian market.
More details about the new EV rebate can be found in the Canadian government&#8217;s <a href="https://www.canada.ca/en/innovation-science-economic-development/news/2026/02/prime-minister-carney-unveils-canadas-new-automotive-strategy-to-protect-jobs-and-position-our-country-as-a-global-leader-in-next-generation-vehicl.html" target="_blank">announcement</a>.
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The Government of Canada has announced a new electric vehicle (EV) affordability program aiming to encourage drivers to make the switch.