For several years, both the Quebec government and the federal government pledged to encourage the purchase and lease of ecological vehicles by establishing various grants and tax benefits.
What are the eligible vehicles?
The government grants incentive regarding electric vehicles (Quebec) and vehicles qualified as “zero-emission” (federal).
- Battery electric vehicles
- Rechargeable electric hybrid vehicles
- Hydrogen fuel cell vehicles.
What are the incentives granted by the government?
Regarding the Quebec government, the “Roulez vert” program offers a grant up to $8,000 when you purchase or lease a new vehicle until December 31, 2020.
Moreover, the federal government offers, since May 1, 2019, a grant when you purchase or lease a “zero-emission” vehicle up to $5,000 until 2022.
What are the conditions that influence the amount of the incentive granted?
At the Quebec level, the incentive granted for the purchase of a brand-new battery electric or hydrogen fuel cell car is influenced by the manufacturer’s selling price:
- Incentive of $8,000 for vehicles with a value less than $75,000 or less
- Incentive of $3,000 for vehicles with a value between $75,001 and $125,000.
Regarding the rechargeable electric hybrid vehicles, the suggested manufacturer’s price must be under $75,000 and the incentive will be calculated according to the capacity of the battery.
From April 1, 2020, the manufacturer's suggested retail price will have to be lower than $60,000 and higher priced vehicles will no longer be eligible.
At the federal level, the incentive granted for the purchase of a “zero-emission” vehicle is influenced by the manufacturer’s selling price and the range of the vehicle:
- Incentive of $5,000 or $2,5000 for the vehicles with less than six seats or fewer and priced less than $45,000
- Incentive of $5,000 or $2,500 for the vehicles of seven seats or greater and priced at less than $55,000
Is it possible to obtain a rebate when acquiring a used vehicle?
Since September 15, 2019, the Quebec government offers a refund up to $4,000 for certain 2015 and 2016 vehicles from Canada and the United States and for certain 2017 vehicles from Canada.
Is there a limit regarding the number of bought and leased vehicles?
An individual can only obtain one rebate in a calendar year, whereas businesses, municipalities and public bodies established in Quebec can obtain a maximum of 10 rebates per calendar year. However, the minimum registration period in Quebec must be 36 months.
Is there a new depreciation category for tax purposes?
Targeted and purchased vehicles (ready to be commissioned) between March 19, 2019, and January 1, 2024, will be assigned to new depreciation categories and subject to an enhanced depreciation of 100% in the first year. These measures will be applicable at both the federal and provincial levels.
For this purpose, the vehicle’s cost will be reduced from the incentives granted and limited to a maximum of $55,000 (instead of $30,000).
For further information about this topic, please contact your trusted LCA accountant.