New EV Tax is Coming Into Effect in Alberta Next Year
Electric vehicle owners in Alberta will be slapped with an annual tax of $200 starting next year, the province announced when it tabled its 2024 Budget, blaming the extra wear and tear these heavier vehicles have on roadways.
Set to come into effect on January 1, 2025, this new measure is also in response to EVs eating away at Alberta’s fuel tax revenue.
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“While fuel tax revenue is not dedicated to funding construction and maintenance of provincial roads, there are nevertheless fairness concerns with drivers of other vehicles and longer-term challenges associated with declining fuel tax revenue,” the government said.
The new Electric Vehicle Tax, as it will be called, will add to existing vehicle registration fees. But why $200? Apparently, that amount matches the estimated fuel taxes paid by ICE-powered vehicle owners each year.
Alberta anticipates to generate $1 million in revenue from the EV tax during the first year, $5 million during the second and $8 million during the third.
Meanwhile, provincial fuel taxes are expected to produce an estimated $1.4 billion, $1.44 billion and $1.46 billion for the next three fiscal years.
“Government will continue to review the sustainability of the fuel tax, including the increasing use of alternative fuels, and consider changes to protect tax revenue,” according to the Budget.
Further details about Alberta’s EV tax are expected to be shared in the fall.
This comes just over two months after the federal government finalized its new Electric Vehicle Availability Standard (EVAS) to increase the supply of zero-emission vehicles across Canada. The EV mandates are at least 20 percent of all sales by 2026, at least 60 percent by 2030 and 100 percent by 2035.
