Subtle difference from the former iZEV program focuses on final transaction price rather than MSRP

At the beginning of this month, Prime Minister Mark Carney announced a return of EV incentives under the Electric Vehicle Affordability Program (EVAP). 

While it may look like the same $5,000 rebate Canada saw under the former incentives for Zero-Emission Vehicles (iZEV) program, there are considerable differences between the two.

EVAP took effect on February 16, more than a year since iZEV ended after its allocated funds were exhausted. Like iZEV, EVAP offers $5,000 for the purchase or lease of a new, eligible battery-electric vehicle (BEV) or fuel cell electric vehicle (FCEV). It also offers $2,500 for the purchase or lease of a plug-in hybrid electric vehicle (PHEV). 

Unlike iZEV, which relied on a vehicle’s base-model MSRP of up to $55,000 for eligibility (with higher trims eligible up to $65,000), EVAP requires a transactional value of $50,000 or less (with caveats). Vehicles must come from a country with which Canada has a free-trade agreement, meaning Chinese EVs will not qualify. 

Any Canadian-built EV is eligible, regardless of its cost.

How does transactional pricing work?

“Final transactional price” includes the vehicle’s MSRP, optional add-ons from the factory, accessories from the dealership and manufacturer and dealership fees. It does not include extended warranties, insurance, winter tires, Level 2 chargers, pre-delivery inspection and freight charges, financing or leasing costs, the down payment or trade-in, and any government charges such as taxes. 

The rebate is applied at the point of sale from the dealership.

The rebates also decrease over the scheduled five years of the program. For BEVs, $5,000 is offered this year, then $4,000 for 2027, $3,000 for 2028 and 2029, and finally $2,000 in 2030. PHEV purchasers (or lessees) have $2,500 this year, $2,000 in 2027, $1,500 in 2028 and 2029, and $1,000 in 2030. 

The federal government is investing up to $2.3 billion in EVAP over those five years, with the goal of providing incentives for more than 840,000 EVs. 

What vehicles are eligible?

Transport Canada has a list of eligible vehicles that sits at 69 at time of publication, with more predicted to be added this year as they come to market. 

Interestingly, the most expensive vehicle on the list is the 2025 Dodge Charger Daytona Scat Pack, starting at $77,790. The all-electric muscle car is built at the Stellantis Windsor Assembly Plant in southern Ontario and is therefore exempt from the transactional price requirement. 

The same goes for the vehicle’s lower-priced R/T trim, as well as the Chrysler Pacifica PHEV, built at the same plant with a starting MSRP of $59,790. 

Stellantis is phasing out production of all its PHEVs, including the Jeep Grand Cherokee PHEV and Jeep Wrangler 4xe, which are not built in Canada and are too expensive to be eligible. The Pacifica PHEV is still available and therefore makes the list. 

The least-expensive EV on the list is the highly discounted Fiat 500e, another Stellantis product with a starting price of $26,290. Kia has the most models on the list at 21, which includes different years and trim levels of some of the same vehicles.

No FCEVs are eligible for EVAP. Forty-three of the vehicles are BEVs, with PHEVs making up the remaining 26. 

EVAP is scheduled to conclude on March 31, 2031. For a complete list of requirements and regulations, visit the Transport Canada EVAP page.