Canada Kills ecoAUTO Program, Rebates to End for Fuel Efficient Vehicles

by Benjamin Jones on February 26, 2008

Honda Fit

Canada’s ecoAUTO program was set up by the federal government to encourage the purchase of fuel efficient vehicles through financial incentives. The program was funded by levies on the most inefficient vehicles and provided rebates of $1000 to $2000 for the purchase of fuel sipping models (the $1000 rebate threshold was 6.0L/100KM, or 39 mpg US).

However, after just a year and a significant amount of complaint and pressure from auto manufacturers (who incidentally make bigger profit margins on less fuel efficient vehicles like SUVs) the government announced in today’s budget that it will allow the ecoAuto program to lapse.

Instead, the Canadian government is pledging $250 million over the next five years to assist the auto industry in developing green technology. In short, Canada is attempting to move its effort from one based on consumer demand to one based on government support of big business.

While government development of green technology certainly has its place, the auto industry is largely motivated by consumer demand. In the case of the ecoAUTO program, we already saw the Honda Fit, which initially missed the rebate cutoff by 0.1 L/100 km, tweaked to get better fuel economy to appeal to more consumers through the rebate. The Fit was just one of several vehicles modified for improved efficiency by manufacturers in response to the program.

Of course, the program was flawed, as many new programs (and cars) tend to be, but it is unclear that government subsidies will make a more profound difference in the auto market than an economically motivated move towards smaller cars.

Source: Globe and Mail

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1 Andy February 27, 2008 at 9:02 am

Disappointing. I knew a number of people who were motivated by these rebates to buy hybrids and fuel-efficient cars.

2 Daniel February 29, 2008 at 4:33 am

I was going to buy a 2009 Camry Hybrid even if it was much more expensive than the base model, due to the federal and provincial programs but if this is not going to be available anymore (a combined rebate of $3500 in Quebec), I will go with the regular gas base model. This is very disappointing to me!

3 Uncle B March 13, 2008 at 9:25 am

If the bumpkins in Alberta charged anything like a realistic price for the resources they give away (like OPEC) All Canadians would be better off, and in a position to design, build and produce an acceptable solution to the American transportation problem, but, like a previous Canadian government, Harper and his pals are in that now famous Canadian “bent over” position taught to them by “Dief the chief” and can’t see the social and economic loss we suffered as a people with the Avro Arrow debacle or the opportunity at nation building they piss away now.

4 sagar July 15, 2009 at 4:51 pm

Just bought a 2008 camry hybrid and was assured by the toyota dealership that a rebate of $2000 was a sure thing. Just found out online the program ended March 2009. They basically lied to get the sale.
So beware, no more rebates are out there.
Erin Mills, missisauga

5 aylw November 9, 2010 at 6:46 pm

While Federal rebates for vehicles have been cancelled, it seems that provincial rebates have not, although they are restricted to hybrids or better :

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