A tax break for hybrid car owners?

Not quite yet. There had been much speculation before last week’s federal budget that the government might try to encourage more Canadians to buy hybrid vehicles like the Toyota Prius or the Ford Escape Hybrid by offering a rebate or other kind of tax incentive to offset the somewhat higher cost of those vehicles compared to regular vehicles. (Personally, I think that higher cost angle is no longer an angle. Price a standard Prius against a Camry with some decent options and you end up with the same price and the same-size car. But I digress . . . .)

In his (long) speech in the House of Commons last Wednesday, Finance Minister Ralph Goodale did not mention the words 'car' or 'auto' or 'automobile' even once.

In the budget documents that were tabled in the House, the government committed to considering the idea of a “feebate” although it doesn't seem to address hybrid cars specifically and instead addresses its applicability in a more broad sense to any kind of fuel-efficient vehicle. From those documents:

“Of particular interest to the Government are measures that may encourage Canadians to acquire more environmentally friendly vehicles. As discussed below, the Government is negotiating with the auto manufacturing sector to achieve an agreement that would improve the fuel efficiency of vehicles sold in Canada. The Government believes that there may also be merit in the concept of a vehicle “feebate.” A feebate would provide a consumer rebate for fuel-efficient vehicles and impose a fee on fuel-inefficient vehicles. The program could be designed to be revenue neutral for the Government. Over time, a feebate could contribute to the improvement of the fuel efficiency of vehicles purchased in Canada, reduced greenhouse gas emissions and improved air quality.”

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