Canada’s 2022 Budget Earmarks $9 Billion for EV Rebates, Battery Supply Chain, and More

Over 10% ($9 billion CAD) of Canada’s $85 billion CAD 2022 budget has been allocated to the development and advancement of the country’s zero-emission sector — reports Electric Autonomy Canada.

$1.7 billion of the announced annual budget will go towards replenishing the federal Incentives for Zero-Emission Vehicles (iZEV) program, extending it until March 2025 and expanding it to also cover medium- and heavy-duty vehicles.

The budget states, “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.”

A big investment in the iZEV program was to be expected, with an internal poll from the Canadian government back in February revealing that continued subsidies for plug-in electric vehicles (EVs) received strong support across the election battleground provinces of Quebec, Ontario, and British Columbia.

Further details on the refreshed rebate program will be announced by Transport Canada in the coming weeks, but it is likely that “broadened” support means increasing the price ceiling for eligibility above the current $45,000 limit for EVs with six seats or less.

“The ZEV mandate for light-duty vehicles and medium-, heavy-duty vehicles is really top of mind right now for us,” said Louise Lévesque, policy director at Electric Mobility Canada, in an interview with Electric Autonomy Canada. “I do appreciate the attention that’s now being given to MHDVs; it’s the next step.”

In addition, a total of $900 million in new funding has been proposed for EV charging infrastructure — $500 million from the Canada Infrastructure Bank for large-scale urban and commercial ZEV charging and refuelling infrastructure, and $400 million to Natural Resources Canada for the deployment of ZEV charging infrastructure in suburban and remote communities through the Zero-Emission Vehicle Infrastructure Program (ZEVIP).

Beyond making EVs more affordable, Ottawa is also looking to sure up Canada’s battery minerals supply chain with the latest budget. The liberal government has earmarked $3.8 billion over eight years towards the implementation of a critical mineral strategy.

As the EV revolution gains momentum, demand for the minerals used in the batteries that power all-electric cars continues to soar. U.S. President Joe Biden last month sought to boost domestic EV battery mineral production in the U.S. through an executive order.

Last year, the Canadian government made policy changes to defend against foreign takeovers of and foreign investment in companies mining critical minerals in the country and Canada’s critical mineral supply chain as a whole.

Lévesque added that the budget is allocating $2.2 million over five years “to renew the Greening Government Operations Fleet Program, which will continue to conduct readiness assessments of federal buildings required to facilitate the transition of the federal vehicle fleet to ZEVs.”

Canada’s 2022 budget also pledges just over $1 billion to develop clean energy projects of “national significance,” supporting grid modernization projects and establishing a Pan-Canadian Grid Council, “which would provide external advice in support of national and regional electricity planning.”