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A feebate system to promote clean vehicles in Canada

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Reducing vehicle emissions without putting more of a burden on public finances: it’s possible, with a feebate system, a policy tool studied by Équiterre and Horizon Advisors in their new report, The Road Ahead to Low-Carbon Mobility: a Feebate System for Canada’s Light-Duty Vehicle Segment. The study reviews various bonus-malus programs in place in jurisdictions that are further ahead than Canada in transportation electrification, such as Denmark, France, the Netherlands and the UK, in order to evaluate how a feebate system could be implemented here.

The feebate system at a glance

When purchasing a vehicle, consumers are financially incentivized (through a rebate) to opt for a zero-emission vehicle (ZEV). The rebate is financed by charging a transportation electrification fee on the purchase of high-emission vehicles.

To eliminate gas guzzlers from our roads and accelerate the adoption of electric vehicles

A feebate system can kill two birds with one stone: it discourages the purchase of fuel-inefficient vehicles, responsible for the stagnation of our efforts to curb GHG emissions in the transportation sector, while at the same time giving a major boost to the transition to cleaner cars. Unlike conventional subsidies for purchasing ZEVs, a feebate system wouldn’t cost taxpayers a dime. Being a self-funding system, it would free up funds to pay for more measures aimed at decarbonizing Canada’s transportation sector. Among other benefits, the system focuses on GHG emissions and involves multiple stakeholders (manufacturers, dealerships and consumers) in the fight to reduce these emissions.

A simple, effective tool to promote low-emission vehicles

With three types of feebate systems examined in the report, namely a constant rate feebate system, a circulation feebate system and an emissions-based system, it is this latter approach that offers the most promise for Canada. The report recommends instituting an increasingly stringent fee structure with a view to reverse current consumer purchasing trends.

78% of Quebecers are in favour of the government using fiscal incentives to promote cleaner vehicles. Are you among them?

A comprehensive ZEV strategy to support the feebate system

The Équiterre and Horizon Advisors report concludes that there is no silver bullet solution to decarbonize Canada’s light-duty vehicle sector, other than the adoption of a unified and stringent strategy that includes a feebate system, a scrapping program for gas-powered vehicles, additional investment in ZEV charging and fueling infrastructure and a national zero-emission vehicle standard.

To read the full report >>
To read a short summary of the report >>
To read our open letter, by Andréanne Brazeau - Mobility Analyst >>