OTTAWA — Car dealerships who were on the hook for thousands of dollars in electric vehicle rebates will have a month to make a claim to get their money back.
Transport Canada laid out the details in a call today with dealerships. The department indicated any vehicle that was delivered before the program paused on Jan. 12 will be eligible for reimbursement.
The Canadian Automobile Dealers Association welcomed the news. It estimates that its 3,500 members are owed about $11 million for rebates on vehicles they had already sold to customers — rebates the dealers didn't claim from the federal government before Ottawa said the rebate program had run out of money.
"I had dealers calling immediately after (Transport Canada's briefing) who were very emotional on the phone, who have been worried about this, because this has had a huge impact on their cash flow," said Huw Williams, the organization's public affairs director.
"It was quite emotional on the other side to hear dealers are going to get paid because not every manufacturer covered their dealer or supported their dealers."
Dealerships will only be allowed to file a maximum of 25 claims per day, which Williams said will more than cover the shortfall. He said the largest sum owed to a single dealership is about $600,000.
Transport Canada also said any vehicle that was purchased before the Jan. 12 cutoff date but delivered to the customer after that point won't be eligible for reimbursement.
"The cutoff date is something we'll be discussing with Transport Canada," Williams said.
"We'll have to see how big that problem is and whether that can be resolved. But for the moment, this is a win for dealers."
In January, Transport Canada paused its popular Incentives for Zero-Emission Vehicles program — known as iZEV — after its funding ran out. Ottawa spent nearly $3 billion on iZEV during its five-year lifespan.
The program provided up to $5,000 toward the purchase of a new zero-emissions vehicle. But with the abrupt suspension of the program — only three days after the government suggested it would be paused when the funds were exhausted — hundreds of dealerships were forced to swallow the cost of any rebate claims they hadn't yet submitted.
Dealerships can now make claims for vehicles delivered to customers as far back as April 1, 2024.
"It was a shocking series of events in January when they shut down the program after giving notice that the program would go through an orderly wind-down," Williams said.
Tesla submitted rebate claims worth more than $43 million for 8,600 EVs on the weekend before the program was suspended, according to analysis by The Toronto Star.
In March, Transport Minister Chrystia Freeland said Ottawa was pausing payments to Tesla in order to investigate the claims it had made.
A spokesperson for Freeland's office would not offer an update on the Tesla investigation.
Williams said his organization has asked the government to explain what happened with Tesla's claims.
"Every taxpayer should want to know how Tesla was allowed to game the system over such a short period of time, and were all the rules followed and was there any inside notice given to them," Williams said.
"We don't know that, and we're not alleging that, but we think these are reasonable questions to ask for sure."
EV sales have sagged since the iZEV program was suspended. EV sales under the program peaked in December 2024 at 18.29 per cent of all new vehicles sold — the last full month before the program was suspended.
Sales fell in January to 11.95 per cent and slid further to 7.53 per cent in April, according to the most recent data from Statistics Canada.
Federal ministers have said the government is working toward bringing back consumer incentives for EVs — a promise also made in the Liberal party's election platform.
Automakers are warning that sales are slumping further as buyers wait for the rebates to come back.
This report by The Canadian Press was first published July 11, 2025.
Nick Murray, The Canadian Press
