New Canada EV Rebate Of Up To $5,000 Opens February 16

Last Updated On 5 February 2026, 6:09 PM EST (Toronto Time)

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On February 5, 2026, Prime Minister Mark Carney announced a new $2.3 billion EV Affordability Program, building on Canada’s earlier federal EV incentive model.

Under the program, Canadians can receive up to $5,000 toward the purchase or lease of an eligible battery electric vehicle or fuel cell electric vehicle and up to $2,500 for a plug-in hybrid when the program opens on February 16, 2026.

This is the most significant federal EV incentive since the original iZEV program ended, and it comes at a time when electric vehicle prices are becoming increasingly competitive with their gas-powered counterparts.

Whether you are a first-time EV buyer, a business looking to electrify your fleet, or someone who has been waiting for the right financial push to make the switch, this is welcome news.

Here is a complete breakdown of how the new Canada EV rebate works, who qualifies, which vehicles are eligible, and everything else you need to know before the program opens on February 16.

How Much Is the New Canada EV Rebate?

The rebate amounts depend on the type of electric vehicle you purchase or lease.

For battery electric vehicles (BEVs) and fuel cell electric vehicles (FCEVs), the maximum incentive is $5,000 in 2026.

For plug-in hybrid electric vehicles (PHEVs), the maximum incentive is $2,500 in 2026.

However, these amounts will not stay the same for the entire five-year duration of the program.

The government has structured the rebate on a declining schedule, meaning the incentive decreases over time as EV adoption grows and vehicle prices are expected to come down naturally.

Here is the full year-by-year breakdown.

Vehicle Type	2026	2027	2028	2029	2030
Battery Electric / Fuel Cell EV	$5,000	$4,000	$3,000	$3,000	$2,000
Plug-in Hybrid (PHEV)	$2,500	$2,000	$1,500	$1,500	$1,000

In 2026, you get $5,000 for a BEV or fuel cell EV, and $2,500 for a plug-in hybrid. In 2027, those amounts drop to $4,000 and $2,000 respectively.

In 2028 and 2029, the BEV rebate holds at $3,000 and the PHEV rebate at $1,500. By 2030, the final year of the program, the rebate falls to $2,000 for BEVs and $1,000 for plug-in hybrids.

The takeaway is simple: if you are planning to buy an electric vehicle and want to maximize your savings, doing it sooner rather than later gets you the biggest rebate.

The $3,000 difference between a 2026 purchase and a 2030 purchase is not insignificant, especially when stacked with provincial incentives.

Which Electric Vehicles Are Eligible for the Rebate?

Not every electric vehicle on the Canadian market will qualify for this new rebate.

There are two main eligibility criteria that determine whether a specific EV qualifies: the price of the vehicle and where it was manufactured.

First, the price cap. To be eligible, the final transaction value of the vehicle — meaning the actual price you pay, including any dealer-installed options or accessories — must be $50,000 or less.

This cap is designed to ensure the program helps middle-income Canadians afford practical electric vehicles rather than subsidizing luxury purchases.

But here is the important exception: the $50,000 price cap does not apply to Canadian-made EVs and PHEVs.

If the vehicle was assembled in Canada, it qualifies for the full rebate regardless of its price.

This is a deliberate move by the government to reward consumers who buy Canadian-built electric vehicles and to incentivize automakers to keep and expand their manufacturing operations in Canada.

The second factor is the country of manufacture. Eligible vehicles must be built in Canada or imported from a country with which Canada has an existing free trade agreement.

Canada currently has free trade agreements with 51 countries, including the European Union member states, the United Kingdom, Japan, South Korea, and Mexico, among others.

Vehicles manufactured in any of these countries qualify.

What this notably excludes is vehicles manufactured in the United States.

Due to the ongoing trade dispute and the 25 percent tariffs that the U.S. has imposed on Canadian auto exports, U.S.-made vehicles are not eligible for the new rebate.

This is a significant detail because many popular electric vehicles sold in Canada — including several Tesla models, certain Chevrolet and Ford EVs, and others — are assembled at U.S. factories.

The government has not yet published the full list of eligible makes and models, but it is expected before the February 16 launch date.

Canadians should check the program’s official website once it goes live to confirm whether their preferred vehicle qualifies.

Does the Rebate Apply to Leases?

Yes, the new EV Affordability Program explicitly covers both purchases and leases.

Whether you choose to buy your electric vehicle outright, finance it, or lease it, you can still receive the full incentive amount — up to $5,000 for a BEV or FCEV, and up to $2,500 for a PHEV — provided the vehicle meets the price and manufacturing origin requirements.

This is good news for Canadians who prefer the flexibility of leasing, particularly those who want to try an EV without committing to full ownership or who want to upgrade to newer models as battery technology improves.

It also benefits business fleet operators who typically lease their vehicles rather than purchasing them.

Who Can Apply? Individual and Business Eligibility

Both individuals and businesses are eligible to receive the new EV rebate.

The program is designed to accelerate EV adoption across the board, whether you are a private citizen buying a family car or a company electrifying a fleet of delivery vans, sales vehicles, or service trucks.

While the full application rules and documentation requirements have not been published as of the announcement date, the program is modelled on Canada’s previous iZEV program, which required proof of purchase or lease, vehicle identification details, and confirmation that the vehicle met eligibility criteria.

More specific application guidance is expected before the February 16 launch.

It is also worth noting that the incentive is described as a point-of-sale or point-of-lease benefit, meaning it is likely to be applied at the dealership level rather than requiring buyers to file a separate claim after the fact.

Under the previous iZEV program, participating dealers applied the discount directly to the transaction, and it is reasonable to expect a similar process this time around.

However, buyers should confirm the exact application process once the program officially launches.

Can You Stack the Federal Rebate With Provincial EV Incentives?

This is one of the most common questions Canadians have, and the answer is yes — you can combine the new federal EV rebate with existing provincial and territorial incentive programs.

Since the federal program and provincial programs are administered by different levels of government, they operate independently.

For example, if you live in British Columbia, you may be eligible for the CleanBC Go Electric passenger vehicle rebate on top of the federal incentive.

In Quebec, the Roulez Vert program offers its own purchase incentives that can be stacked with federal rebates.

Other provinces and territories may also have their own programs or introduce new ones in response to the federal announcement.

When you combine federal and provincial incentives, the total savings on an eligible EV could easily exceed $10,000 depending on where you live and which vehicle you choose.

This makes 2026 potentially the most affordable year in Canadian history to buy an electric vehicle, particularly in the first few months when the federal rebate is at its maximum $5,000 level.

When Does the Program Start and How Long Does It Last?

The new EV Affordability Program opens on February 16, 2026.

That is just eleven days after the announcement, which signals the government’s urgency in getting the program running quickly while the public interest and search demand are at their peak.

The program will run for five years, through 2030.

The government estimates that more than 840,000 new electric vehicles will be incentivized through the program over this period, representing one of the largest consumer-facing green incentive programs in Canadian history.

If you are planning to take advantage of the program, the key dates to keep in mind are February 16, 2026, when applications open and the $5,000 maximum rebate kicks in, and December 31, 2026, after which the rebate drops to $4,000 for the 2027 calendar year.

Every year after that, the incentive continues to decline, so the financial motivation to act early is built directly into the program’s structure.

What About Tesla? Are U.S.-Made EVs Excluded?

This is the question that will matter most to a huge number of Canadian EV shoppers.

Tesla is by far the most popular electric vehicle brand in Canada, and the majority of Tesla vehicles sold here are manufactured at the company’s facilities in Fremont, California, and Austin, Texas.

Because the new rebate program requires vehicles to be built in Canada or in a country with a free trade agreement with Canada, and because the United States is currently excluded due to the ongoing tariff dispute, Tesla vehicles assembled in the U.S. would not qualify for the rebate under the program’s current rules.

This does not mean Tesla is permanently excluded.

If the trade situation changes — for example, if tariffs are resolved through the upcoming CUSMA review — U.S.-made vehicles could potentially become eligible.

Additionally, if Tesla were to manufacture vehicles at a facility in an eligible country, such as its Gigafactory in Berlin, Germany (an EU country covered by the Canada-EU free trade agreement), those specific models could qualify.

For Canadian buyers who have their heart set on a Tesla, this is an important factor to weigh.

A $5,000 rebate on a competing EV brand could significantly close the price gap or even make an alternative vehicle cheaper than a comparable Tesla model.

On the other hand, Tesla buyers who proceed regardless simply would not receive the federal incentive.

Other popular EVs that may be affected include certain models from Chevrolet, Ford, and Rivian that are assembled exclusively in the United States.

Buyers should verify the manufacturing location of their preferred model before assuming eligibility.

How This Compares to the Old iZEV Program

Many Canadians will remember the original Incentives for Zero-Emission Vehicles (iZEV) program, which offered up to $5,000 for eligible EVs.

The new EV Affordability Program shares some similarities with iZEV but differs in several important ways.

The most notable difference is the country-of-origin requirement. The old iZEV program did not restrict eligibility based on where the vehicle was manufactured — U.S.-made Teslas, for example, were fully eligible.

The new program explicitly excludes vehicles from countries without a free trade agreement with Canada, which currently means U.S.-made vehicles are out.

The price structure is also different. The iZEV program had a Manufacturer’s Suggested Retail Price (MSRP) cap, while the new program uses a final transaction value cap of $50,000 — meaning the actual price you pay matters, not just the sticker price.

This is an important distinction because dealer markups, added options, and delivery fees could push a vehicle over the threshold even if its base MSRP is under $50,000.

The declining rebate schedule is also new. Under iZEV, the incentive amount remained constant throughout the program’s life.

The new program starts higher but tapers down each year, creating a clear incentive to buy earlier rather than later.

Finally, the exemption of Canadian-made vehicles from the price cap is entirely new and represents a significant policy shift toward using consumer incentives as an industrial strategy tool, not just an environmental one.

Tips for Canadians Planning to Buy an EV in 2026

If you are seriously considering an electric vehicle purchase this year, here are some practical steps to maximize your savings and avoid surprises.

First, wait for the official eligible vehicle list. The government is expected to publish a detailed list of qualifying makes, models, and model years before February 16.

Do not assume your preferred vehicle qualifies until you see it on the official list.

Second, check your province for additional incentives. Stacking federal and provincial rebates could save you $8,000 to $12,000 or more depending on where you live.

British Columbia, Quebec, and several other provinces have active programs.

Third, pay attention to the final transaction value. The $50,000 cap is based on what you actually pay, not the base MSRP.

If you are eyeing a vehicle that is close to the threshold, be mindful of add-ons, delivery charges, and dealer fees that could push you over.

Of course, if you choose a Canadian-made EV, this cap does not apply.

Fourth, consider acting early. The $5,000 rebate in 2026 is the highest it will ever be under this program.

By 2027, it drops to $4,000, and it continues declining every year after that. If the financial incentive is a key part of your decision, buying sooner gets you more money back.

Fifth, confirm the application process at your dealership. Under the previous program, the rebate was applied at the point of sale through participating dealers.

Verify that your dealer is set up to process the new incentive before you finalize your purchase.

Other Key Announcements Made for Canada’s EV and Auto Sector

The new EV rebate program was the centrepiece of a much larger automotive strategy announced by the Carney government on February 5, 2026.

Here is a summary of the other major measures that were announced alongside the rebate.

For workers, the government announced $570 million in employment assistance and reskilling supports for up to 66,000 workers, expanded the Work-Sharing Program with over $100 million in new funding to prevent layoffs and support up to 26,000 workers.
- Canadian government also extended an extra 20 weeks of employment insurance benefits for long-tenured workers, and established a new workforce alliance bringing together industry, labour, and training institutions.
The government is allocating $3 billion from the Strategic Response Fund and up to $100 million from the Regional Tariff Response Initiative to help auto manufacturers adapt, grow, and diversify into new markets.
- This funding is aimed at protecting and expanding Canada’s manufacturing base at a time when U.S. tariffs are threatening the sector.
On the emissions front, the government is introducing stronger greenhouse gas emission standards for light-duty vehicles, targeting 75 percent EV sales by 2035 and 90 percent by 2040.
- As part of this shift, the government is repealing the Electric Vehicle Availability Standard (EVAS), replacing it with the more stringent overall emissions standards that allow manufacturers technology flexibility while still driving EV adoption over time.
A massive $1.5 billion investment through the Canada Infrastructure Bank will go toward expanding the national EV charging network.
- This includes a comprehensive national charging infrastructure strategy focused on attracting private investment, reducing barriers, making buildings EV-ready, and ensuring skills training for charger installation and maintenance.
- Canada currently has nearly 60,000 public and private chargers, and this investment aims to significantly accelerate the buildout.
In a notable trade development, Canada has signed a new strategic partnership with China to allow a fixed volume of Chinese EV imports and encourage Chinese joint venture investment in Canadian manufacturing.
- This sits alongside a recently signed memorandum of understanding with South Korea on future mobility collaboration.
- Both partnerships represent a shift toward diversifying Canada’s auto trade relationships beyond North America.
Canada is also maintaining its 25 percent counter-tariffs on U.S. auto imports as long as U.S. tariffs on Canadian vehicles remain in place.
- The government confirmed its objective in the upcoming CUSMA review is mutual tariff removal, but will not back down unilaterally.
Finally, the government launched public consultations on a proposed tradeable import credit system, which would allow manufacturers to earn import credits based on their production and investment in Canada — creating a market-based incentive for companies to build vehicles domestically.

The announcements made on February 5, 2026, are far-reaching, but they also open up a number of important next steps that Canadians and industry stakeholders should watch closely.

The EV Affordability Program launches on February 16, and the specifics of the application process and eligible vehicle list will be critical for consumers planning their purchases.

What is clear from today’s announcement is that the Carney government has made a bet — a massive, multi-billion-dollar bet — that Canada’s automotive future is electric, globally connected, and no longer dependent on the goodwill of a single trading partner.

Whether that bet pays off will depend on execution, international circumstances, and the willingness of Canadian consumers and businesses to embrace the transition.

But there is no doubt that the stakes, for the Canadian economy and for the hundreds of thousands of workers who depend on it, could not be higher.

Frequently Asked Questions (FAQs)

Will the rebate be applied automatically at the dealership, or do I need to apply separately after buying the vehicle?

Based on how Canada’s previous iZEV program operated, the rebate is expected to be applied at the point of sale through participating dealerships, meaning the discount would be reflected directly in your purchase or lease transaction. However, the government has not yet confirmed the exact application process for the new program. Buyers should check the program’s official website after its February 16 launch to verify how the incentive will be processed and ensure their dealership is registered to participate.

Are used or pre-owned electric vehicles eligible for the new Canada EV rebate?

The new EV Affordability Program appears to be limited to new vehicle purchases and leases. The government’s announcement references incentivizing over 840,000 new EVs over the program’s five-year lifespan, and the eligibility criteria are tied to final transaction values and country of manufacture — criteria that apply to new vehicle sales. Canadians interested in used EV incentives should look into provincial programs, as some provinces offer separate rebates for pre-owned electric vehicles.

I already ordered an EV but have not taken delivery yet. Will I qualify for the rebate if I take delivery after February 16?

The specific rules around order timing versus delivery timing have not been detailed in the initial announcement. Under the previous iZEV program, the incentive was generally tied to the delivery or registration date rather than the order date. If you have a vehicle on order with delivery expected after February 16, 2026, there is a reasonable chance you could qualify, but you should confirm directly with the program administrator once it launches and ensure your dealer is prepared to apply the incentive at the time of delivery.

Does the $50,000 price cap include taxes, delivery fees, and dealer-installed accessories?

The government describes the cap as a final transaction value of up to $50,000. This language suggests it refers to the total price paid rather than just the base MSRP. Buyers should be cautious about added costs such as dealer-installed accessories, premium paint, upgraded wheels, delivery charges, and other fees that could push the transaction value beyond the threshold. Remember, this cap only applies to vehicles that are not made in Canada — Canadian-built EVs are exempt from the price cap entirely.

Can a business claim the EV rebate on multiple vehicles for its fleet?

Yes, businesses are explicitly included as eligible recipients under the new EV Affordability Program. However, the specific rules around fleet purchases — such as whether there is a per-business cap on the number of incentives that can be claimed, documentation requirements for commercial buyers, and whether the vehicle must be used primarily in Canada — have not yet been detailed. Businesses planning fleet electrification should monitor the program’s official guidelines once they are published ahead of the February 16 launch to understand any limitations or additional requirements.

Gagandeep Kaur Sekhon

Gagandeep Kaur Sekhon moved to Canada in 2010 on a study visa. She navigated through the ups and downs of her student life and gained her permanent residency in 2015. Today, she is a proud Canadian citizen residing in Calgary, Alberta. She is mother of 2 beautiful daughters and making her difference through writing and guidance at INC – Immigration News Canada.