Canadian government caves in to automakers and kills auto efficiency rebate program

[MetroMPG]

The Canukistani Feds unveiled a new budget today. It kills the EcoAuto program which they launched just last year.

For those who aren't familiar with the story: the program offered rebates of $1k, $1.5k or $2k to buyers of efficient cars (6.0L/100 km combined fuel consumption was the $1k threshold). On the flip side, it penalized buyers of gas hogs with a "green levy" up to $4k, depending on the level of hoggishness. It was designed to be revenue neutral.

From day one, most of the auto manufacturers hated the program for a variety of reasons, not the least of which was that it interfered with the market and favoured some manufacturer's products (Toyota & Honda) over others (just about everybody else).

There's no doubt the program was flawed, particularly since the thresholds where the rebates were offered (and the rebate amounts themselves) were fixed points, rather than a sliding scale.

That meant, as Honda discovered to its horror when the program was unveiled last year, that the 5-speed Fit missed being eligible for the $1000 rebate by 0.1 L/100 km, whereas the Yaris 5-speed snuck under the wire.

The manufacturers put up an aggressive public fight via the media (and no doubt a private fight as well, as in lobbying efforts) denouncing EcoAuto at every turn.

Too bad. Because the program worked.

On two fronts: e.g. sales of efficient, rebate-eligible cars went up; and automakers whose models missed the threshold by small amounts modded their vehicles to get them into the rebate territory (or out of "penalty" territory). The program caused manufacturers to make more efficient cars. Honda modified both its 5-speed Fit and Civic to boost efficiency slightly to get them below 6.0L/100km.

Ah well. It was a surprise in the first place to see such a program come from a Conservative government; but it's no surprise to see a Conservative government bury it.

http://www.theglobeandmail.com/servl...udget2008/home

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See earlier thread: Canada's ecoAuto feebate program leads auto makers to tweak models for better MPG

[NoCO2]

Wow, it's a shame that they didn't continue with it. Yea, initially it will hurt some auto manufacturers, however, what better way to force innovation in the, until recently, stagnant automobile market. Maybe this is what it's going to take to get more efficient cars on the road, I wish the U.S. had something similar.

[DifferentPointofView]

Well... I would probably put my jeep in a garage for the rest of it's days and take off insurance and etc. and start it momentarily to keep it from seizing up. 4K penalties is mucho dollars. I could buy a whole plethora of geo's for that much! I'm keeping my Jeep though until it's a collectors thingy. eventually they'll be selling for a lot, even if it's when I'm dead and my great great great grandson has it. if not oh well... cause I'll be dead! lol.

Yea. definitely wish the US had something like that. As long as I didn't qualify as getting taxed. Would they go off of EPA or what? cause what If I got 50mpg (unlikely) in my Jeep but got taxed as if it got 16?

[dremd]

That is a shame.
I'm assuming it applied only to New car sales?
Or did it also apply to used cars?
Totally agree on the sliding scale, maybe even sliding scale + $ credit/ fine on window sticker (or sticker on window sticker).

It would be difficult to use actual mileage, vs EPA #'s, but that sure as heck would be awesome.
<Rant about Epa#'s>
My "new" EPA #'s are 35, 44. Once (when I first got my Golf) I decided to do a worst case Fuel economy tank. I drove like a total jack ass, hard launches, stop and go's lots of idiling etc etc. I got 42 mpg. Now tell me how they got 35 mpg?
</ Rant about EPA #'s>

[MetroMPG]

It was just on new cars, and it was based on the combined city/hwy consumption rating (the old one) - unlike a few other countries which base their annual road tax or licence fee based on fuel consumption (or CO2 emissions).

The program doesn't expire for another year. Canadians will be facing a election before that happens. It'll be interesting to see where this program goes afterwards.

[tasdrouille]

That one really went under the radar. It was not in the papers or the news here today.

As much as I like the tax cuts and family incentives, I deeply hate this government for the way it deals with the environment.

[trebuchet03]

I'm not sure how it works in Canada... But can you put forward a referendum?

[tjts1]

This didn't sound like a very well thought out law. The cut off point was completely arbitrary and gave manufacturers no heads up in what to expect. Honda had a very legitimate concern when the Fit missed out on a $1000 tax rebate by .1L/100km. A progressive system with multiple brackets would be much more effective. It should also be announced at least 2-3 years ahead of time to give manufacturers time to design vehicles to the upcoming FE standards. You can always count on politicians to screw up a good thing.

[MetroMPG]

Agreed on the arbitrariness, tjts1. If I'm not mistaken, France implimented a similar system, but with a sliding scale, rather than a few big carrots and a couple of big sticks.

However, I don't think announcing it in advance would have helped. Doing so would have just given the manufacturers more time to organize their marketing efforts to try to mold public opinion against it and have it buried before it even launched.

It was painfully obvious that they don't want any market "interference" that lures people out of their most profitable vehicles and into smaller, more efficient ones.

[tjts1]

Originally Posted by MetroMPG

However, I don't think announcing it in advance would have helped. Doing so would have just given the manufacturers more time to organize their marketing efforts to try to mold public opinion against it and have it buried before it even launched.

It was painfully obvious that they don't want any market "interference" that lures people out of their most profitable vehicles and into smaller, more efficient ones.

Yeah you have a point. In the US the manufacturers fought higher CAFE standards tooth and nail for the last 20 years. But the moment the new 35mpg by 2020 standard was announced the big 3 immediately started showing off new FE innitatives. Ford with its eco boost engines, GM is killing off the DOHC V8, Chrysler is killing off the HEMI etc. There has to be a better way to go about this.