As part of this plan, the Canadian government released details for auto dealers to be reimbursed. They will deliver up to $11 million for Canada’s unmet rebates under the Incentives for Zero-Emission Vehicles (iZEV) program. This left dealerships in a bind and many faced financial ruin with the sudden end of the rebate program. The program allowed up to $5,000 for the purchase of zero-emission vehicles. The Canadian Automobile Dealers Association (CADA) is the national voice of Canada’s 3,500 auto dealerships. They’ve been vocal in demanding more transparency about what’s going on with the attack.
Transport Minister Chrystia Freeland revealed that in March, Ottawa paused payments to Tesla while investigating claims made by the company. This decision came about after the federal government undertook [pdf] a detailed evaluation of its own iZEV program. By early January 2025, the fund for the program had been entirely exhausted, leading to its suspension exactly three days after the government provided assurances of an orderly shutdown.
Impact on Dealerships
The abrupt cut of the iZEV program also put hundreds of dealerships across Canada in a lurch. As a result, many dealers were forced to eat the costs associated with these unreimbursed rebate claims. This crisis severely threatened their economic security. The CADA has urged the government to clarify what transpired regarding Tesla’s claims and how they might have influenced the program’s abrupt termination.
Huw Williams, public affairs director at CADA, was pessimistic about the order in which things seemed to be happening.
“It was a shocking series of events in January when they shut down the program after giving notice that the program would go through an orderly wind-down.” – Huw Williams
The impact of this moment is profound, as evidenced by sales numbers that have mirrored the chaotic scene outside that has characterized the market since early summer. Statistics Canada reported that the increase dropped to 11.95 percent in January and then plunged down to 7.53 percent in April.
Questions Surrounding Tesla’s Claims
CADA officials are understandably upset and trying to figure out how and why Tesla was able to slip through the cracks. Their actions have created a hurricane of havoc. They’re looking to see whether all of the regulations were complied with. They’re eager to learn if Tesla was tipped off with any advance info during this period.
While Williams clarified that these questions do not imply any wrongdoing on Tesla’s part, he emphasized the importance of transparency and accountability in the government’s handling of the situation.
“Every taxpayer should want to know how Tesla was allowed to game the system over such a short period of time, and were all the rules followed and was there any inside notice given to them.” – Huw Williams
In response, Ottawa has moved to compensate the dealers impacted. They are working to fill the gap left by the suspension of the iZEV program. We hope that through these materials, the government will continue to clarify how it directed money. Most importantly, it will articulate the rationale for key decisions that shape the auto market.
Government’s Response and Future Actions
The nearly $3 billion spent on the iZEV program during its five-year lifespan highlights its significance in promoting zero-emission vehicles. With the recent downturn in sales and ongoing investigations, stakeholders are keenly watching how the government will proceed in restoring confidence within the automotive industry.
The nearly $3 billion spent on the iZEV program during its five-year lifespan highlights its significance in promoting zero-emission vehicles. However, with the recent downturn in sales and ongoing investigations, stakeholders are keenly watching how the government will proceed in restoring confidence within the automotive industry.
