Can you afford a Tesla, or any EV? Because in four short years, the federal government says one-fifth of new vehicles for sale in this country need to be zero emissions vehicles (ZEV). That basically means electric or hydrogen-powered. Photo by Brian Zinchuk

Sometimes it’s best to see what the government is doing, without a filter. As such, from time-to-time, Pipeline Online likes to provide policy statements straight from the horse’s mouth. In this case, it’s the 2022 federal budget, released on April 7 by Finance Minister Chrystia Freeland.

As part of the 2022 federal budget, the Liberal government intend on accelerating the adoption of zero-emission vehicles. Currently, these would likely be electric or hydrogen-fueled. But it’s not just light cars and trucks. Now they’re talking about pushing medium and heavy trucks, too, despite the fact that there are next to none, if any, that have been practically used in large scale in Canadian Prairie winters. Nor is there any charging infrastructure for large scale trucks. But this budget is making that push.

All of this can be found in Chapter 3 of the budget, seen at this link.

Pipeline Online comments are in italics. Here is the verbatim section of the budget document:

Reducing Emissions on the Road

On-road transportation accounts for 20 per cent of Canada’s greenhouse gas emissions.

  • To accelerate the manufacturing and adoption of cleaner cars, the federal government will put in place a sales mandate to ensure at least 20 per cent of new light-duty vehicle sales will be zero-emission vehicles (ZEVs) by 2026, at least 60 per cent by 2030 and 100 per cent by 2035.
  • To reduce emissions from medium- and heavy-duty vehicles (MHDVs), the federal government will aim to achieve 35 per cent of total MHDV sales being ZEVs by 2030.
  • In addition, the federal government will develop a medium- and heavy-duty ZEV regulation to require 100 per cent MHDV sales to be ZEVs by 2040 for a subset of vehicle types based on feasibility, with interim 2030 regulated sales requirements that would vary for different vehicle categories based on feasibility, and explore interim targets for the mid-2020s.
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To that end, the feds plan on incentives for ZEVs. The budget states the following:

Making the Switch to Zero-Emission Vehicles More Affordable

To help make ZEVs more affordable for Canadians, the federal government has offered purchase incentives of up to $5,000 for eligible vehicles since 2019. This program has helped Canadians purchase or lease over 136,000 new ZEVs, but more support is needed to help Canadians get behind the wheel of zero-emission vehicles.

  • Budget 2022 proposes to provide $1.7 billion over five years, starting in 2022-23, with $0.8 million in remaining amortization, to Transport Canada to extend the Incentives for Zero-Emission Vehicles (iZEV) program until March 2025. Eligibility under the program will also be broadened to support the purchase of more vehicle models, including more vans, trucks, and SUVs, which will help make ZEVs more affordable. Further details will be announced by Transport Canada in the coming weeks.

 

But you’re going to need to be able to charge all these ZEVs, so the budget explains how the federal government will support new charging stations.

Building a National Network of Electric Vehicle Charging Stations

To help make ZEVs more affordable for Canadians, the federal government has offered purchase incentives of up to $5,000 for eligible vehicles since 2019. This program has helped Canadians purchase or lease over 136,000 new ZEVs, but more support is needed to help Canadians get behind the wheel of zero-emission vehicles.

  • Budget 2022 proposes to provide $1.7 billion over five years, starting in 2022-23, with $0.8 million in remaining amortization, to Transport Canada to extend the Incentives for Zero-Emission Vehicles (iZEV) program until March 2025. Eligibility under the program will also be broadened to support the purchase of more vehicle models, including more vans, trucks, and SUVs, which will help make ZEVs more affordable. Further details will be announced by Transport Canada in the coming weeks.
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Did anyone see the charging station around here? My truck’s going to need a 400 amp extension cord for the next 12 hours. Yours too? Shoot, where are we going to find enough extension cords? Photo by Brian Zinchuk

 

They’re going to need some big chargers for the next category, as the feds now want to force or “help business switch to medium- and heavy-duty zero-emission vehicles.”

To that end, here’s what the budget says:

Helping Businesses Switch to Medium- and Heavy-Duty Zero-Emission Vehicles

Businesses across Canada want to upgrade their fleets to be part of the solution to climate change. However, those upgrades can be expensive, and businesses need to be confident that ZEVs can reliably transport their goods to market.

  • Budget 2022 proposes to provide $547.5 million over four years, starting in 2022-23, to Transport Canada to launch a new purchase incentive program for medium- and heavy-duty ZEVs.
  • Budget 2022 proposes to provide $33.8 million over five years, starting in 2022-23, with $42.1 million in remaining amortization, to Transport Canada to work with provinces and territories to develop and harmonize regulations and to conduct safety testing for long-haul zero-emission trucks.
  • To help decarbonize vehicles already on the road, Budget 2022 proposes to provide $199.6 million over five years, starting in 2022-23, and $0.4 million ongoing, to Natural Resources Canada to expand the Green Freight Assessment Program, which will be renamed the Green Freight Program. This will support assessments and retrofits of more vehicles and a greater diversity of fleet and vehicle types.

With these investments, the government is taking a significant step towards reducing pollution on our roads, and is on track to meet its commitment to add 50,000 new ZEV chargers and hydrogen stations across Canada.

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Since the carbon tax has been implemented, individual taxpayers in Saskatchewan, Alberta, Manitoba and Ontario get refunds with their income tax, but every cent businesses pay in carbon tax is gone forever. Now the feds are reconsidering that, and going to give some back to small and medium businesses. This is how the budget explains it:

Returning Fuel Charge Proceeds to Small and Medium- Sized Enterprises

Since 2019, it has no longer been free to pollute anywhere in Canada, and provincial and territorial governments have been able to design and implement their own pollution pricing systems that meet a standard, federal benchmark. Most have done so. But in provinces that have decided not to implement a system that meets the benchmark—specifically Alberta, Saskatchewan, Manitoba, and Ontario—a federal backstop applies.

In these provinces, all direct proceeds of pollution pricing are returned to households, small businesses, Indigenous groups, and farmers.

In the 2021 Economic and Fiscal Update, the government announced its intention to return a portion of the proceeds from the price on pollution to small and medium-sized businesses through new federal programming in backstop jurisdictions. Beginning in 2022-23, these businesses will receive an estimated $1.5 billion in fuel charge proceeds collected between 2020-21 and 2022-23. This new program will also be used to return outstanding 2019-20 fuel charge proceeds, amounting to approximately $120 million, that have not already been returned through the Climate Action Incentive Fund.

  • Budget 2022 proposes to provide up to $30 million over two years, starting in 2022-23, to Environment and Climate Change Canada to administer direct payments to support emission-intensive, trade-exposed small and medium-sized enterprises in those jurisdictions.

 

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