Canadian buyers are actively using new EV subsidies
New car buyers in Canada are actively utilizing recently introduced government subsidies for electric vehicles. Since February, they have already received over 122 million dollars in discounts. However, as a new report shows, many dealerships are still waiting for the government to reimburse these funds.
The EVAP Program: How it works
Canada’s Electric Vehicle Availability Program (EVAP) was reinstated on February 16. It allows dealers to apply the discount immediately at the point of sale and then submit a claim for reimbursement from the government. As of May 29, the database recorded 24,389 applications totaling 122 million dollars. These funds are part of the 2.275 billion dollars the government allocated for the next five years.
Conditions for receiving discounts
Incentives are available for vehicles costing 50,000 dollars or less. The maximum discount is 5,000 dollars for fully electric vehicles and hydrogen fuel cell vehicles, and 2,500 dollars for plug-in hybrids.
Market impact: sharp sales increase
The program’s reinstatement was great news for buyers. Previously, from 2019 to 2025, Canada had a similar program that stimulated the purchase of economical vehicles. When it ended in January 2025, the share of electric vehicles in total new car sales fell from 18% to 10%.
According to CTV News, in March, immediately after payments resumed, EV sales increased by more than 80% compared to February.
Dealer problems: payment delays
Although vehicles sold from February 16 are eligible for subsidies, dealers could only submit reimbursement applications starting April 6. The Canadian Automobile Dealers Association (CADA) reports that many dealerships have still not received payments. Some are waiting for amounts exceeding 200,000 dollars.
“The commitment to pay dealers in a timely manner is not being fulfilled at the initial stage of the program. There appears to be no understanding that the timing of reimbursements harms business cash flow. This is money we are advancing on behalf of the federal government,” said CADA representative Huw Williams.
Minor errors and lack of appeals
It is reported that some discount applications were rejected due to simple typographical errors. Meanwhile, there is no mechanism for appeal or review of such rejections. Transport Canada assures that it is working to speed up payments.
“There is no delay in payments; complete and verified applications continue to be processed and reimbursed. While Transport Canada aims to process complete and accurate applications as quickly as possible, timelines may vary depending on verification requirements and the volume of submissions,” the agency said in a statement.
The current situation demonstrates a classic conflict between the rapid implementation of a government program and the administrative capacity to execute it. On one hand, the EVAP program truly stimulates the market: the drop in sales after the previous program ended and the sharp increase after its reinstatement are direct proof of the subsidies’ effectiveness. On the other hand, delays in payments to dealers place a serious burden on their businesses, as they are effectively lending money to the government. Rejecting applications for minor errors without the possibility of appeal adds a lack of transparency to the process. The program’s continued success will depend on how quickly the government can establish a smooth and clear compensation mechanism; otherwise, dealers may lose the motivation to actively promote electric vehicles.