Return of federal subsidy for electric vehicles

Starting February 16, 2026, Canadians will be able to benefit from the return of a federal subsidy for electric vehicles, a program designed to make electrification more accessible than ever. This government initiative comes at a time when the transition to cleaner transportation is becoming essential, both to reduce greenhouse gas emissions and to stimulate the adoption of zero-emission technologies. For individuals, businesses, and electric mobility stakeholders, this measure represents a major step forward that opens the door to new economic, environmental, and social opportunities.

What is the new federal EV subsidy?

The Electric Vehicle Affordability Program is an incentive scheme that the federal government has decided to reinstate. This program offers subsidies for the purchase or lease of eligible new electric vehicles. Starting February 16, 2026, Canadians will be able to receive up to $5,000 for the purchase of a battery or hydrogen fuel cell electric vehicle, and up to $2,500 for a plug-in hybrid vehicle.

The main objective is simple: to accelerate the adoption of EVs among the population by reducing the cost of entry and making these vehicles more competitive with traditional gasoline-powered cars. The subsidy is available to buyers whose EV has a final transaction value of $50,000 or less, unless the vehicle is manufactured in Canada, in which case the price limit is waived.

Good news for consumers

For many drivers, price remains one of the main barriers to adopting an electric vehicle. Despite steadily declining battery costs and a wider range of models available, many vehicles remain out of reach for a large portion of buyers. The federal subsidy directly reduces the purchase price, which can tip the scales in favor of an EV.

In concrete terms, this means that:

• Buying or leasing an EV becomes more affordable, with immediate savings at the point of purchase.
• Consumers can consider more powerful or more spacious electric vehicles.
• Electric models that were previously too expensive may become accessible thanks to the discount offered.

In addition, this subsidy applies at the point of sale, which simplifies the process of obtaining it. Buyers do not have to navigate complex procedures or pursue lengthy refunds: the discount is applied directly when purchasing or leasing the vehicle.

A positive impact for businesses and fleets

The new subsidy doesn’t just benefit individuals—businesses can also take advantage of it. Electric vehicles are increasingly being integrated into commercial fleets, whether for urban deliveries, mobility services, or daily operations. With up to $5,000 off per vehicle, the transition to an electrified fleet is becoming more cost-effective and attractive.

For businesses looking to reduce their long-term operating costs, this financial boost represents a substantial saving. What’s more, when combined with provincial or municipal subsidies, the total cost can be even more advantageous.

A strategy that goes beyond vehicle purchases

This subsidy is part of a broader Canadian government strategy to advance transportation electrification, reduce pollutant emissions, and encourage a new generation of clean industries. In addition to purchase assistance, investments are also planned to develop the network of charging stations and infrastructure needed to expand electric mobility.

This means that the subsidy is not limited to making EVs more affordable; it also encourages the creation of a comprehensive ecosystem capable of supporting mass adoption. A denser and more efficient charging network benefits all EV users and increases the confidence of potential buyers who are still hesitant to take the plunge.