The Canadian government wants you to go to a zero-emission vehicle, and it’s offering incentives.
As of July 11, 2022, the Government of Canada announced that $547.5 million of funding over four years (or until available funding is exhausted) is available for the Incentives for Medium- and Heavy-Duty Zero-Emission Vehicles (iMHZEV) Program.
It’s not for every vehicle, however, as there’s an iMHZEV Program list of eligible vehicles that can receive the incentive at the point of sale when purchased/leased and delivered on or after the vehicles respective eligibility date.
For truck makers, if you want to have your vehicles added to the eligibility list you must first submit an application to Transport Canada. Questions can be asked via email at IMHZEVProgram-ProgrammeIVMLZE@tc.gc.ca.
The iMHZEV Program is one way Canada is attempting to reduce greenhouse gas emissions—transportation is the second-largest source in Canada—by putting more zero-emission vehicles (ZEVs) on the road.
The incentive is also in place owing to the more expensive nature of the ZEVs to make it more affordable, and thus more palpable.
A ZEV (zero emissions vehicle) is a vehicle that produces zero exhaust emissions of criteria pollutants or greenhouse gases while operating.
Per Transport Canada, ZEV’s are:
- battery-electric vehicles (BEVs);
- plug-in hybrid electric vehicles (PHEVs);
- fuel cell electric vehicles (FCEVs)
There are many different makes and models of eligible zero-emission vehicles, and as such, depending on the size/class of vehicle, the dollar incentive varies.
Purchase and Lease Incentives
The iMHZEV Program offers point of sale incentives for Canadian organizations and businesses (subject to funding availability) who buy or lease an eligible MHZEV. Only the vehicles listed on the website are eligible for an incentive when they’re purchased or leased for at least 12 months, on or after the eligibility date.
Find which vehicles are eligible for an incentive, or a vehicle’s eligibility date
Before including a vehicle on the list of eligible vehicles, Transport Canada has reviewed an application from the automaker and has found that the vehicle meets the iMHZEV Program requirements. Namely, that the vehicle is:
- a medium- or heavy-duty vehicle with a gross vehicle weight rating (GVWR) of greater than 8,500 lbs. This includes Class 2B to Class 8 vehicles, including on-road vocational vehicles falling in those classes, such as refuse trucks, and yard/shunt trucks.
Types of Incentives
The iMHZEV Program incentives are determined based on the vehicle class of the base trim. All other trims of the same vehicle will subsequently fall under the same class, regardless of vehicle weight. There are eight levels of incentive:
Incentive Levels by Class
- Vehicle Type: Class 7/8 Coach Bus; GVWR: 26,001+ lbs (11,794+ kg); Vehicle Examples: Coach Bus; Maximum Incentive Amount: $200,000
- Vehicle Type: Class 8 (350 kW and up); GVWR: 33,000+ lbs (14,970+ kg); Vehicle Examples: Dump, cement, heavy conventional, sleeper; Maximum Incentive Amount: $150,000
- Vehicle Type: Class 8 (under 350 kW); GVWR: 33,000+ lbs (14,970+ kg); Vehicle Examples: Dump, cement, heavy conventional, sleeper; Maximum Incentive Amount: $100,000
- Vehicle Type: Class 7; GVWR: 26,001 – 33,000 lbs (11,794 – 14,969 kg); Vehicle Examples: furniture, medium conventional; Maximum Incentive Amount: $100,000
- Vehicle Type: Class 6; GVWR: 19,501– 26,000 lbs (8,846 – 11,793 kg); Vehicle Examples: Beverage, single-axle vans, rack; Maximum Incentive Amount: $100,000
- Vehicle Type: Class 5; GVWR: 16,001 – 19,500 lbs (7,258 – 8,845 kg); Vehicle Examples: Large walk-in, city delivery, bucket; Maximum Incentive Amount: $75,000
- Vehicle Type: Class 4; GVWR: 14,001 – 16,000 lbs (6,351 – 7,257 kg); Vehicle Examples: Large walk-in, conventional vans, city delivery; Maximum Incentive Amount: $75,000
- Vehicle Type: Class 3; GVWR: 10,001– 14,000 lbs (4,537 – 6,350 kg); Vehicle Examples: Walk-in, conventional vans, city delivery; Maximum Incentive Amount: $40,000
- Vehicle Type: Class 2B; GVWR: 8,501 – 10,000 lbs (3,856 – 4,536 kg); Vehicle Examples: Utility vans, full-size pick-ups, step vans; Maximum Incentive Amount: $10,000
Eligibility of Vehicles
To be eligible under the iMHZEV Program, a vehicle must:
- meet all of Canada’s Motor Vehicle Safety Standards;
- be meant for use on public streets, roads, and highways or other paved surfaces; and
- be plated and registered in Canada in the eligible recipient organization’s name.
Zero emission vocational on-road trucks will be eligible as would yard/shunt and drayage trucks. Zero-emission shuttle or coach buses will also be eligible.
Transport Canada may exclude certain types of vehicles from the program such as transit buses, school buses, recreational vehicles (RVs), or off-road vehicles.
Conversions (converting an existing internal combustion engine (ICE) vehicle to ZEV) are not eligible.
To be eligible under the iMHZEV Program, an eligible recipient organization must:
- be a Canadian Business / Organization with an office registered in Canada.
Only new ZEVs are eligible for the federal incentive (in other words, vehicles that haven’t been plated before). Eligible ZEVs that are demonstrators (a demo vehicle that buyers can test drive) are considered new vehicles and are eligible for the incentive as long as the odometer reads less than 10,000 km.
Incentives can be applied to eligible ZEVs leased for at least 12 months but will be prorated (adjusted) based on the length of a lease of fewer than 48 months. For example, a 48-month lease is eligible for the full incentive, while a vehicle with a 24-month lease will be eligible for half the incentive.
As long as a vehicle’s full description (the year, make, model, and trim) appears on the list of eligible vehicles, an incentive can be provided. A “trim” is a pre-set package of equipment and finishes offered for a particular vehicle model (for example: base, sport, touring, etc.). A vehicle model can have multiple trim levels. Different trim levels will usually have different prices.
There is a limit to how many eligible ZEVs Canadian businesses can purchase or lease under the iMHZEV Program. Businesses and provincial/territorial and municipal governments operating fleets are eligible for up to 10 incentives (or a maximum of $1,000,000) under this Program in a calendar year.
Important: Transport Canada reserves the right to remove vehicles from the eligibility list if they no longer comply with program requirements.
How to Receive the Incentive
Notice: Dealership and authorized seller Enrollment applications will be available in the upcoming months. Incentive requests for reimbursement are expected to be available in the Fall of 2022.
The incentive will be applied at the point of sale by the dealership or other authorized sellers such as Original Equipment Manufacturers (OEMs) and/or vehicle finishers/distributors. It will appear directly on the bill of sale or lease agreement on eligible medium- and heavy-duty ZEVs purchased/leased on, or after, the vehicles eligibility date. The dealer must apply taxes and fees to the purchase or lease before applying the incentive.
The dealer must submit the documentation required to be reimbursed for an incentive provided to an eligible recipient organization at the point of sale.
The federal incentive for eligible medium- and heavy-duty ZEVs will be applied in addition to any provincial or territorial incentive offered.
If your business/organization is looking to lease or purchase a new medium- heavy-duty zero-emission vehicle and would like to know whether it is eligible for the Incentives for Medium- and Heavy-duty Zero-Emission Vehicles Program, consult the list of eligible vehicles:
For those concerned about EVs (electric vehicles) running out of juice while you are on the road—admittedly, for someone people this is a stress point of anxiety—note that in Canada there are many charging stations, with only Nunavut the only part of the country currently lacking infrastructure.
In the map below, the areas with green circles represents electrical charging service offered for Level 2 and DC Fast. Level 2 charging adds about 25 miles of Range Per Hour (RPH), while Level 1 charging only adds about 4 miles of Range Per Hour. Level 2 is obviously the faster charging option.
