EMC’s reaction to the temporary suspension of electric vehicle rebates in Quebec
December 17, 2024
Between February 1, 2025, and the relaunch of rebates (likely after the budget announcement in early April), electric vehicle sales are expected to slow down significantly before picking up again.Between February 1, 2025, and the relaunch of rebates (likely after the budget announcement in early April), electric vehicle sales are expected to slow down significantly before picking up again.
A similar scenario occurred in March 2019 when the federal government announced new rebates starting in May 2019. For two months, people waited for the federal rebates to take effect, thus slowing down EV sales for that time.
In addition to the temporary halt to EV rebates, the Quebec government is pressing pause on its financial support for residential, MURBs and at-work charging infrastructure. This despite their justification in the Quebec budget (March 2024) of reducing the EV rebate allowance in order to reinvest the funds into public and private charging infrastructure.
“We at EMC consider this pause on EV rebates, and especially infrastructure rebates, to be unacceptable as it only adds to the market uncertainty that the industry is currently facing. What we need from the Quebec government is assurance that the EV rebates will return, and be retroactive, and that the EV infrastructure rebate will continue during this time, as well as the return of the Écocamionnage program”, states Daniel Breton, President & CEO of Electric Mobility Canada.
It is also important to highlight the following: In April 2024, La Presse reported that the Electrification and Climate Change Fund (FECC) had accumulated a $1.7 billion surplus. However, the government chose not to use it, aiming instead to grow the fund further.
Tax expert Luc Godbout explained the following mechanism: if Quebec’s government spends more on climate change initiatives than the FECC’s revenue—generated from the carbon market—for the 2024-2025 fiscal year, it will “increase the deficit.”
The accumulated surplus “was built up over several years and reduces debt,” he noted. Meanwhile, the FECC “lends” its surplus to the government’s General Fund, which spends it elsewhere.
The office of Minister Charette, however, claims that maintaining this surplus is unrelated to Quebec’s budgetary situation. It was emphasized that “it is not possible to spend the accumulated surpluses in the FECC without the approval of the Minister of Finance.”
According to the Government of Quebec, “The Electrification and Climate Change Fund (FECC) was created following the National Assembly’s adoption of a bill aimed at effective climate change governance and promoting electrification.
The FECC is a special fund entirely dedicated to the fight against climate change.
In other words, Quebec’s Finance Minister chose to use the FECC’s surpluses not to reduce GHG emissions or electrify the economy, but to improve the appearance of public finances.
This accounting tactic seems questionable, especially since Quebec is almost certain to miss its GHG emissions reduction target.
Indeed, while Quebec’s GHG emissions reduction target is -37.5% compared to 1990 levels, by 2021 the province had only achieved a 9% reduction.
Sources:
https://www.environnement.gouv.qc.ca/changements/ges/2021/inventaire-ges-1990-2021.pdf