Car tax woes a concern for Canada’s self-driving future

Story Highlights That billions saved could be deployed in Canada’s economy Electric vehicles could pay dividends in reduced highway traffic Reversing cuts on electric vehicle rebates would not only help the environment, it could…

Car tax woes a concern for Canada’s self-driving future

Story Highlights That billions saved could be deployed in Canada’s economy

Electric vehicles could pay dividends in reduced highway traffic

Reversing cuts on electric vehicle rebates would not only help the environment, it could fuel the economy

Editor’s Note: This is one of 12 articles in CNNMoney’s new series “Go Green.”

Pro-environmental activists have been pushing for a nationwide electric vehicle rebates, similar to those announced by U.S. President Donald Trump. In Canada, the provincial government of Ontario says it will scrap its own rebates next year and go direct to car buyers with loans instead.

CNNMoney’s Warren Humes looks at the challenges and possible solutions.

Canada’s new carbon tax will hit some cars hard in 2019, slashing the purchase price of most of them. The impact will likely be more significant in oil-producing Alberta than in Ontario, which could make the province a hot spot for electric vehicles.

But the government is poised to reverse course on incentives for buying these vehicles.

The province canceled rebates for electric and hybrid cars, arguing that many of the highest cost buyers wouldn’t qualify for the subsidy anyway.

“When government improves services, it should stop subsidies that benefit only a few and save the money to invest in improving services for everyone,” a spokesperson for Toronto Mayor John Tory said in a statement.

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That means that more people could purchase environmentally friendly vehicles. To offset some of the cost, the federal government is phasing out a tax credit of $7,500 for electric and hybrid vehicles on January 1, 2020. In that case, it would be easier for many buyers to get loans from the state.

The program’s cancellation has elicited harsh criticism from environmental groups. There are, however, some who aren’t opposed to the program being taken off the table.

“The programs could be funded better as a loan program to customers,” suggests Charles Khabouth, president of Plug in Canada, an electric vehicle advocacy group.

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One challenge for electric vehicles — and transportation overall — is figuring out where to put charging stations.

Without enough chargers, electric vehicles can be slow to recharge. That is why other initiatives like a proposed citywide bus rapid transit system in Toronto could be more attractive for electric vehicle drivers. The new RapidRE upgrade would include a 40-kilowatt bus hub that would power all subway and light rail transit vehicles in the city and likely create thousands of new jobs.

“We could have a level of electric vehicle charging capacity that makes electric vehicles highly viable on city streets,” says Michael Mansfield, a lawyer with Environmental Defence.

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