August 8, 2017

Should Canada Abolish Its EV Subsidies?


The Montreal Economic Institute (MEI), a non-profit research organization, recently published a study asking if electric vehicles subsidies are efficient in combatting greenhouse gas emissions (GHGs). The answer, no:

Subsidies for the purchase of electric vehicles have little effect on GHG emissions and are much more expensive than other incentive measures that achieve the same results. Between different methods that produce the same results, the more expensive method should never be favoured. If the goal is to obtain the greatest emissions reductions for the amounts spent, then subsidies for the purchase of electric vehicles are actually the least efficient, most expensive way to get there. The Quebec and Ontario governments should abolish them.

The study’s findings are clear: “abolish” the subsides. A co-author of the study, Mark Milke, notes that electric vehicle buyers would likely still purchase such vehicles without a subsidy, making the subsides a pure loss for taxpayers:

“The real costs are probably even higher, since half of buyers of electric vehicles would make their purchases even without the subsidy,” explains Mark Milke, independent policy analyst and co-author of the publication. “Those subsidies are therefore a pure loss, with no resulting reduction in GHGs.”