Subsidizing electric cars is inefficient, report says

Provincial subsidies to encourage the use of electric vehicles are the most expensive, least effective way to help cut greenhouse gas emissions, the Montreal Economic Institute says in a new report.

The organization studied the subsidies offered by the governments of Quebec and Ontario and says together they could cost those provinces more than $17 billion by 2030, while cutting emissions in those provinces less than four per cent a year.

Ontario offers rebates of up to $14,000 and Quebec up to $8,000, on the purchase of electric vehicles.

Germain Belzile, senior associate researcher at the institute and the report’s lead author, says over a decade, a zero-emission vehicle will produce about 30 tonnes less in emissions than a gas vehicle.

That means the Ontario subsidy is costing as much as $523 a tonne and Quebec’s $288 a tonne, compared with the federal carbon price plan, which will hit $50 a tonne by 2022.

Belzile said federal Transport Minister Marc Garneau should take this into account as he considers a federal electric car subsidy.

“If the governments absolutely want to get to their (emissions) goals faster, the worst way of doing that is a subsidy to electric cars,” said Belzile.

Garneau appointed an advisory group last month to look at barriers to electric vehicle purchases, including supply, demand, cost, and infrastructure readiness, such as the availability of charging stations. Garneau said he doesn’t intend to set quotas for electric vehicle sales in Canada.