Alberta's $200 electric vehicle registration tax is sparking debate among owners

Bassam Mahfoud bought a Tesla last December,following other Canadians who are flocking toward zero-emission vehicles.

And while electric vehicle sales in Canada are breaking records every year, Mahfoud said he isn't surprised by the Alberta government's recent decision to implement an annual electric vehicle tax.

Electric vehicle owners in the province will need to fork out an extra $200 to pay the new fee,starting as early as January 2025.

When Finance Minister Nate Horner tabled his first provincial budget on Thursday, he said thetax will be paid when owners register their vehicles, and will come in addition to the existing registration fee.

According to the province, the money will help account forwear and tear on roads, and make up for the fuel tax that electric vehicles owners don't pay. Hybrid vehicles will be exempt from paying the tax.

Almost 9,350electric vehicles were registered in Alberta as of March31 last year. That is up from 5,680 that were registered in 2022.

The province saw 43,648 hybrid vehicle registrations last year, ajump from 35,341 hybrid vehicle registrations in 2022.

Alberta is one of few provinces that does not offer an incentive for purchasing electric vehicles. The federal government offers up to $5,000 for the purchase or lease of light-duty zero-emission vehicles, including electric vehicles.

Mahfoud said hesees Alberta's new policy as a barrier to stop people from buying the cars.

"From nowhere you're making people pay fees in a time where other countries or other provinces are encouraging people to switch over to [electric vehicles]," he said.

'Unfair,' EV association president says

William York, president of the Electric Vehicle Association of Alberta, said he's confused why the government is stating that weight is one of the reasons why the tax is being implemented.

He compared the Tesla Model 3, an electric sedan, with a BMW 4 Seriesand found that both vehicles weigh just over 3,500 lbs. York saidthere are a number of other electric vehicles that weigh the same or less than their internal combustion engine counterparts.

"A $200 fee doesn't make sense because you can have very light electric vehicles that drive very few kilometres per year, or you can have a very heavy electric vehicle that drives 50,000 kilometres per year," York said.

"Either way, they're both being forced to pay a $200 flat fee to the Alberta government. We don't think that's fair."

The province is expecting revenue of $1 million from the electric vehicle tax in 2024-25.

It's projecting that number to hit $5 million in 2025-26, as more Albertans purchase electric vehicles, and $8 million by 2026-27.

The province said more details will be revealed in the fall when legislation is introduced.

WATCH | Why some Albertans see the new EV tax as a political move:

Why some Albertans see the new EV tax as a political move

6 months ago

Duration 2:29

Earlier this week, Alberta's government tabled its budget plan for the upcoming fiscal year. One of the many things it includes is a new registration tax for electric vehicle owners.