The government of Alberta, Canada, will hit electric vehicle owners with a new $200 annual tax in a bid to help raise funds for road improvements.
In the government’s fiscal 2024-25 budget, it says the tax has been designed to compensate for the added wear and tear on provincial roads caused by EVs and their added weight. The fee of $200 also roughly equates to what the government says the average ICE vehicle owner pays in fuel taxes each year.
Auto News Canada reports the levy will raise approximately $1 million in revenue in fiscal 2024-25. This will increase to $5 million in 2025-26 and $8 million in 2026-27. These figures are tiny compared to the $1.4 billion expected to be raised in 2024-25 through fuel taxes alone.
“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 in its budget. “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.”
“I’m interested in fixing the roads,” added Alberta finance minister Nate Horner. “We need everyone to help.”
Read: Canada Requires All New Cars Sold By 2035 To Be Electrified
Further details about the EV tax will be announced in the fall before it is implemented by January 1, 2025. The head of the Canadian Vehicle Manufacturers’ Association that represents the Detroit Three locally, Brian Kingston, does not support the tax and believes it will make zero-emissions sales mandates more difficult to achieve.
“Taxing electric vehicles will cost Albertan’s and make Canada’s ambitious EV sales targets even more difficult to achieve,” Kingston said. “Helping Albertans switch to electric depends on efforts from all levels of government to address the key barriers to EV adoption, including affordability and a lack of charging infrastructure.”
