Update March 25: The Star has a follow up story just now–with an investigation underway into Tesla’s rebates.
The federal investigation into Tesla’s $43 million in iZEV rebate claims is now underway, with Transport Canada reviewing each submission individually. While no timeline has been given for when or if the funds will be released, industry sources say internal audits have begun at the four Tesla locations responsible for the bulk of the filings. Meanwhile, pressure is mounting on the government to reimburse local dealers still out millions in unrecovered rebates. “We’re still in limbo,” said one Ontario dealer. “It’s not just about Tesla—it’s about fairness for everyone who followed the rules.”
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Canada’s federal government has quietly changed the wording of its electric vehicle rebate rules — after Tesla locations across the country rushed to claim over $43 million CAD ($30M USD) in public funds in just three days.
As first reported by the Toronto Star, Transport Canada’s website used to clearly state that dealerships “must” apply for rebates before delivering vehicles to customers. But Tesla filed for rebates on 8,653 vehicles over a single weekend in January, a volume that would have required around-the-clock deliveries — roughly two vehicles per minute — to follow the original rules.
Shortly after the surge was uncovered, the website was changed. The key word “must” was replaced with “should,” allowing retroactive filings that appear to legitimize what Tesla did. Notably, the modification date on the website still reads July 5, 2024 — months before the wording was altered — raising further transparency concerns.
“I think it looks bad,” said Ian Stedman, a public law professor at York University. “It makes it seem like they are trying to cover up the fact that somebody either posted the wrong thing in the first place, or decided to discreetly change the policy.”
Despite multiple requests from the Star, neither Transport Canada nor Finance Minister Chrystia Freeland’s office provided comment.
Tesla’s actions claimed 60% of the remaining funds in Canada’s iZEV program — a now-defunct initiative offering up to $5,000 per eligible electric vehicle. Other dealerships, caught off guard, say they’ve been left holding the bag for more than $10 million in rebates they had fronted to customers.
Terry Budd, who owns eight dealerships in southern Ontario, said he’s still owed $175,000. “There’s no way [Tesla] delivered or sold that many cars in a weekend,” he said. “Then all of a sudden Tesla claimed the entire amount and cleared everyone else out.”
Some EV dealers told the Star that even before the change, Transport Canada wasn’t enforcing its own rules — allowing backdated filings despite the official wording. The website change now makes it look like that was always the case.
While experts say the minister has the legal authority to override the rules, the situation has sparked criticism over ethics and fairness. “The ethics of what’s been done is questionable,” said Akolisa Ufodike, a York University public policy professor.
The situation has added political tension as well. Tesla has become a target for protests amid CEO Elon Musk’s ties to the U.S. administration, and provinces like B.C., Manitoba, and Nova Scotia have now excluded Tesla from their rebate programs. Whether the federal government has actually paid out the $43 million to Tesla remains unclear.
