Alberta adopts tax on electric vehicles
Already deprived of a provincial purchase subsidy, electric vehicle drivers in Alberta will soon have to pay an annual tax of $200, as adopted in the 2024-2025 budget tabled last Thursday.
The measure, which will come into force on January 1, 2025, is designed to compensate for the increased wear and tear on roads caused by these vehicles, which are generally heavier than comparable models with combustion engines. At the same time, it will offset the decline in fuel tax revenues.
"While fuel tax dollars are not dedicated to funding the construction and maintenance of the province's roads, there nevertheless remain equity issues with drivers of other vehicles and longer-term challenges associated with declining fuel tax revenues," it says in the budget.
The new tax on electric vehicles will be added to the registration fees already in effect. But why $200? The province claims that this amount corresponds on average to the fuel taxes paid by drivers of combustion engine vehicles each year.
Alberta expects to collect $1 million from its electric vehicle tax in the first fiscal year, $5 million in the second and $8 million in the third. By comparison, its fuel tax revenues are expected to total just over $1.4 billion in each of the next three years.
Further details will be announced in the Fall.
This comes ten weeks after the federal government officially unveiled its new electric vehicle availability standard, including a system of credits and penalties, to encourage automakers to accelerate sales of zero-emission vehicles from 2024 and 2025. Ottawa wants these to represent 20% of sales by 2026, 60% by 2030 and 100% by 2035.
