What You Need to Know About Canada’s New Electric Vehicle Affordability Program (EVAP)

If you’ve been thinking about buying or leasing an electric vehicle (EV) due to sky-high gas prices, a new government program may help you make the switch sooner.

The new Electric Vehicle Affordability Program (EVAP) replaces previous federal rebates. It focuses on affordability for everyday Canadians and improving access to lower-cost electric vehicles and plug-in hybrid vehicles (PHEVs).

Some Canadian drivers have switched to electric for moral, health or environmental reasons, but high gas prices and government rebates also remain two of the biggest motivations. 

EV sales reached a record high of 14% of total vehicle purchases in 2024, likely because buyers were anticipating the end of federal and provincial (Quebec and British Columbia) incentive programs the next year. Once those programs were no longer available, sales fell to 8% of total purchases in the first 8 months of 2025. Economic uncertainty likely also played a role.

If you’ve been thinking about buying or leasing an EV for personal or business use, here’s how the EVAP works.

What is the Electric Vehicle Affordability Program (EVAP)?

The Electric Vehicle Affordability Program, or EVAP, is a new program from Transport Canada that offers rebates on eligible electric vehicles purchased or leased in Canada. It focuses on affordable EV models—the rebates are limited to vehicles with a final transaction value of up to $50,000, unless they’re made in Canada, in which case there is no limit to the final transaction value. The goal is to make EV ownership more accessible to more Canadians.

Under the new EVAP program, qualifying buyers can receive:

• Up to $5,000 for eligible battery-electric and hydrogen fuel-cell vehicles
• Up to $2,500 for eligible plug-in hybrid electric vehicles

Eligible buyers may include:

• Individuals
• Families
• Business owners
• Organizations and car-sharing companies

The rebate applies to new eligible vehicles or dealer demonstration models only. Used EVs are not currently covered under the federal EVAP program.

The program requires vehicles to be manufactured either in Canada or in countries that have a free-trade agreement with Canada, such as Mexico, South Korea, and European Union member states. (Canada has a trade deal with China to allow a certain number of Chinese EVs into the country at reduced tariffs starting in 2026, but these vehicles don’t qualify for the EVAP.)

Key dates for EVAP

There are important dates to remember if you’re planning to buy or lease an EV in 2026.

Eligibility began on February 16, 2026

Eligible purchases and leases made on or after this date may qualify for the EV incentive program. Transactions started before that date are not eligible—even if the vehicle is delivered later.

Application portal opened March 31, 2026

The EVAP portal officially launched on this date. This is when dealerships and authorized sellers were able to begin submitting applications and supporting documents to Transport Canada.

One caveat

The program is scheduled to run for five years—until March 31, 2031—but its funding is limited to $2.275 billion. That’s enough to offer full rebates for 455,000 new EVs. Note, however, that rebates are first come, first served, and they will get smaller over time, down to $2,000 for EVs and $1,000 for PHEVs in 2030.

How much is the EVAP worth?

The rebate amount depends on the type of vehicle you buy or lease.

Full-electric and hydrogen vehicles

Eligible battery-electric vehicles (BEVs) and fuel-cell electric vehicles (FCEVs) can qualify for up to $5,000.

Plug-in hybrid vehicles (PHEVs)

PHEVs can qualify for up to $2,500.

How does the EVAP work?

The incentive is typically applied at the point of sale through the dealership, reducing the amount you pay upfront rather than reimbursing you later.

Lease terms can affect the rebate amount. Longer leases generally qualify for larger incentives, while shorter leases may receive only partial rebates. (The minimum lease to qualify for the EVAP is 12 months.)

Before completing your purchase or lease, you should:

• Confirm the vehicle is on the eligible vehicle list.
• Verify that the final transaction value qualifies.
• Ensure the transaction date is on or after February 16, 2026.
• Ask the dealership how the EV rebate will be applied.
• Review lease terms carefully if leasing instead of buying.

The new affordability threshold

One of the biggest changes under the EVAP is the new affordability rule. To qualify for the rebate currently, most vehicles must have a final transaction value of $50,000 or less. This differs from the previous EV rebate program, which often looked at the base model price only.

Under the EVAP, the final transaction value includes more than just the sticker price. Dealer-added accessories, options, and administrative fees may all count toward the final limit.

That means a vehicle that technically starts below $50,000 could become ineligible once upgraded packages, accessories, or fees are added. Some taxes and fees do not count toward the final price, such as:

• GST/HST/PST
• Government rebates and incentives
• Freight and pre-delivery inspection (PDI)
• Financing and leasing costs
• Trade-ins and down payments
• Winter tire packages
• Insurance products
• Extended warranties

EVs made in Canada get more flexibility

Canadian-made EVs are one important exception to the $50,000 limit for final transaction value. This means qualifying EVs built in Canada may still be eligible for rebates even if their final price exceeds $50,000.

This rule is intended to support domestic manufacturing and encourage investment in Canada’s EV industry while still allowing imported vehicles from trade partner countries.

Why this new EV rebate program matters

Canada’s new EVAP represents a major shift in how EV incentives are structured. The focus is now on making EV ownership more realistic for average households and cost-conscious buyers. For Canadians considering the switch to electric, the program could help lower upfront costs while supporting access to cleaner and potentially more affordable transportation options.