Canada Halts Tesla Rebates: Transport Minister Cites US Tariffs In Ban On Future EV Incentives

Canada's Transport Minister Chrystia Freeland announced Tuesday that the country will be stopping all rebate payments for Tesla, in addition to banning the company from future electric vehicle (EV) rebate programs.

According to Freeland's email from her office, as long as the U.S. imposed the "illegitimate and illegal" tariffs against Canada, Tesla vehicles will not qualify for rebates.

In the final days of the rebate program, Tesla had gone on to file thousands of claims, which were equivalent to selling two cars per minute, nonstop around the clock, the Toronto Star reported. Freeland added in the email that no rebates will be given until each claim was checked and confirmed as valid.

She also instructed the transport department to change the rules for future EV rebate programs, Reuters reported.

Aftermath of the new U.S. tariffs?

Canada has stopped C$43 million ($30.11 million) in rebate payments for Tesla.

The move came after U.S. President Donald Trump introduced several new tariffs, with most of them set to take effect in early April. These include a high 25% tax on many goods from Canada and Mexico.

Trump said Monday that automobile tariffs would be coming soon, but not all of the planned taxes would start on April 2.

The decision to freeze the payments was made before Canadian Prime Minister Mark Carney announced a general election on April 28, according to the Toronto Star.

Unusual claim surge

The Toronto Star reported that in the last days of the EV rebate program in January, Tesla submitted an unusually high number of rebate claims. One Tesla dealership in Quebec City alone claimed nearly C$20 million in subsidies by reporting over 4,000 electric vehicle sales in a single weekend.

Earlier this month, Toronto stopped offering financial incentives for Tesla cars used as taxis or ride-share vehicles due to trade tensions with the U.S.

Tesla CEO Elon Musk, a key Trump aide, has been leading a White House effort to reduce the size of the federal government and its budget through the so-called Department of Government Efficiency.

Two weeks ago, Tesla warned that the company and other major American exporters could face retaliatory tariffs due to Trump's aggressive trade policies. Under the Trump administration, Tesla has received significant attention, as tariffs have been a key part of the government's economic policy.

Tesla stated that previous U.S. tariffs have raised the cost of its U.S.-made vehicles, especially when exporting them to other countries. The company urged the U.S. Trade Representative's office to find ways to prevent these issues in future trade decisions.