Alberta Electric Vehicle Tax: Everything You Should Know

Recently, the government of Alberta announced the road wear and tear fuel-tax deficit. The government says they will implement a yearly tax of $200 registration on electric vehicles, beginning as early as January 2025. The owners must pay their Alberta EV registration tax for their new electric cars. However, the new tax will not apply to owners with hybrid vehicles. The tax was introduced earlier this year as part of the Alberta 2024 budget. 

During the presentation of this tax policy, the province calculated that this tax would make $1 million in revenue for 2024-25. Ultimately, it will grow to $5 million in 2025-26 and around $8 million in 2026-27. We will discuss more about Alberta electric vehicle tax in this article.

All About Alberta Electric Vehicle Tax

Alberta is the second province of Canada that has imposed a battery electric vehicle tax. You heard it right: the plug-in hybrid is included in the EV tax exemptions. This electric vehicle tax policy of Alberta has sparked a debate among the concerned people. In 2021, Saskatchewan implemented a registration fee of $150. The Alberta government said that further details about Alberta electric vehicle tax will be announced later with the introduction of new legislation. However, we will cover as much as we can in this article.

Alberta’s Electric Vehicle Tax Rationale

The Alberta government explained the reason for their Electric vehicle taxation policy. They said that electric vehicles are heavier and result in more damage than combustion engines. However, as per York, apart from weight not being a direct reason for damage, the amount of force the electric vehicles allocate over a concentrated area damages the roads. This is because electric vehicles are not materially heavier compared to combustion vehicles’ counterparts.

For instance, the BMW4 and Tesla Model 3 weigh around 4,000 pounds. On the other hand, the Model 3 is around 500 pounds heavier than a Toyota Camry. Moreover, the experts are against this. They say that they applied flat charges to the whole group of electric vehicle owners as if all were driving the exact vehicle and the same distance annually. 

Alberta electric vehicle tax included Flat fee charges on electric vehicles. This charge has become commonplace in recent years, with one other province and around 40 US states having announced this kind of charge, including California. The fuel tax revenue is collected in the government’s general revenue. From there, it funds services, programs, and infrastructure Albertans depend on. Plus, these funds are also used for road maintenance and construction.

However, the advocates say there are better ways to tax electric vehicles. 

Alberta anticipates that the electric vehicle tax will contribute around $ 1 million to provincial funds in 2024-25. According to this, the probability is that it will hit $8 million in 2026-27. It is because of the increased purchase of electric vehicles. This number equates to 40,000 electric cars on the streets of Alberta by that year. Meanwhile, the provincial fuel tax is anticipated to give Alberta around $1.3 billion of boost next year. The advocate also stated that he would have supported a more targeted tax on electric vehicles when the adoption of electric cars reached a particular level.

EVs vs. Plug-in Hybrid

The EVVA is not against the tax itself; it’s more about the period of its announcement. Also, some experts say the process was unfair. Experts say the EVAA will go to the government of Alberta way before the fall to talk about their problems related to tax implementation. The range of the issues to canvas may include the exception of hybrid vehicles, which does not make sense. Also, this exemption acts as an escape to avoid the tax. This points again to the perceived unfairness. However, there are hybrid vehicle registration benefits compared to electric vehicle taxation. 

William York, the president of the EV Association of Alberta, wants to see more electric vehicle initiatives from the city related to purchase incentives and infrastructure. He wants to see progress regarding funding for chargers at multi-unit residential buildings. In a table, let us show you the Hybrid vs. EV tax differences.

Tax Aspect	Hybrid Vehicles	Electric Vehicles
Purchase Rebates	Typically, no rebates are available.	Potential incentives or rebates may be available.
Tax Credits	Possible tax credits may be available.	Potential tax credits may be available.
Provincial Taxes	Standard taxes apply	Reductions or exemptions may apply.
Registration Fees	Standard fees apply	Discounts or exemptions may be offered.
Road-User Charges	No specific exemptions	Potential exemptions from particular road taxes

What EV Rebates are Available for Albertans?

Let us talk a little about the electric vehicle rebate that the Alberta government offers. The federal government’s incentive for Zero Emissions Vehicle (ZEV) policy is accessible to the citizens of Alberta. With this policy, you can qualify for a rebate of around $5,000 on the lease or purchase an eligible light-duty electric vehicle. The category of light-duty electric vehicles includes most of the personal vehicles.

Moreover, businesses can also qualify for the rebate for the iMHZEV (Medium and Heavy-duty Zero-Emission Vehicles) program. This program can provide up to $200,000 in rebates on the lease or purchase of medium and heavy-duty zero-emission vehicles. The iMHZEV and iZEV incentives are applicable at the point of sale after taxes and fees.

Electric Vehicle Taxation Policy US

In comparison with the Alberta electric vehicle tax policy, we will briefly discuss the EV taxation policies in the US. Here, we will talk about the EV regulatory trends In the US. 

People who purchase new electric cars may be eligible for a tax credit as high as $7,500, and old or used car buyers may qualify for up to $4,000 in tax breaks. Nineteen states offer an extra incentive beyond the federal credit. This incentive ranges from a $1,000 incentive in Delaware and Alaska to a $7,000 credit in Connecticut, California, and Maine.

Opposite to the tax incentive, 24 states force a higher yearly vehicle registration fee for electric vehicles and some plug-in hybrid cars to help balance out gas tax revenue. 

These registration fees range from $50 in South Dakota and Hawaii to $200 in West Virginia, Ohio, and Wyoming. Moreover, five states offer an incentive to purchase an electric vehicle. These states also impose higher registration fees for them than combustion engine cars. It was a brief discussion on the Electric vehicle policies USA. We have previously done a detailed discussion on the US electric vehicle taxation policy.

Conclusion

The government of Alberta is one of the few provinces that does not offer Green transportation incentives for purchasing electric vehicles. Moreover, it has announced a yearly tax on the purchase of electric cars. This taxation policy will be applicable from January 2025. Experts do not like this policy; they think it hinders people from purchasing electric vehicles instead of encouraging them to buy them. 

The EV Association of Alberta president says Alberta electric vehicle tax policy is unfair. This is because the reason for the policy is the weight of the vehicles, and York says only some of the vehicles are of the same weight. Therefore, only some car owners need to pay the same tax.

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