The rules for Canada’s defunct EV rebate program have been quietly loosened in a way that would have allowed the mass filing that Tesla carried out as the program expired,聽the Star has discovered.
Four Tesla locations claimed $43.1 million in rebates for sales of 8,653 electric vehicles over a 72-hour period in January.
Until recently, the rules published on Transport Canada鈥檚 website stated that dealerships 鈥渕ust鈥 file for rebates 鈥渂efore the delivery of the vehicle.鈥 Tesla would have had to deliver two cars a minute, 24 hours a day for three days straight to abide by those rules and qualify for the rebates.
However, after the Star revealed this unprecedented surge in Tesla rebate claims, the wording of the rules on the Transport Canada website were altered so they now allow dealerships to back file for cars that have already been sold.
Sometime after March 6, the language was changed to say that dealers 鈥渟hould鈥 file for rebates before the delivery of vehicles.
Transport Canada website on March 6, 2025 showing the wording for rebate program uses the word “must.”聽
Transport Canada website from March 20, 2025 showing the wording has been changed to “should.”聽
鈥淚 think it looks bad and makes it seem like they are trying to cover up the fact that somebody either A) posted the wrong thing in the first place; or B) decided to discretely change the policy,鈥 said Ian Stedman, an associate professor of Canadian public law and governance at York University.
Despite the recent change, still lists its 鈥渕odification date鈥 as July 5, 2024.
鈥淲hat is the point of having that on the page if it is meaningless?鈥 Stedman added.
Transport Canada and Transport Minister Chrystia Freeland did not respond to repeated requests for comment on this story.
The Tesla rebate surge, and the prospect of paying out tens of millions of dollars in taxpayer money,聽has taken on added geopolitical significance now that CEO Elon Musk holds a prominent position in the administration of U.S. President Donald Trump as he launches a trade war against Canada.
Tesla cars and dealerships have become targets for vandalism and protest on both sides of the border as people take out their anger at Musk鈥檚 role in radical cuts to U.S. government programs and mass layoffs of civil servants. In response, the company鈥檚 products have been disqualified from rebate programs in B.C, Manitoba and Nova Scotia. Freeland, when she was running for the Liberal leadership, promised a 100 per cent tariff on Tesla vehicles.
Tesla drivers who bought the sleek, technologically forward vehicles are in a tough spot, leaving some trapped between a love for their cars and
Tesla drivers who bought the sleek, technologically forward vehicles are in a tough spot, leaving some trapped between a love for their cars and
It remains unclear whether the Canadian government has paid out the $43 million to Tesla, or is holding back the government subsidy.
The federal government鈥檚 iZEV rebate program offered purchasers of certain battery electric and plug-in hybrid vehicles $2,500-$5,000 off the purchase price. Dealers fronted the rebate to customers and were later reimbursed by the government.聽聽
On a Friday in mid-January, Transport Canada emailed dealers to tell them that the program was running out of money and that they would have 鈥渁 few weeks鈥 before it was shut down. Immediately after the email was sent, four Tesla locations in Toronto, Quebec City and Vancouver started filing for rebates at a furious pace, staking claim to $43.1 million聽鈥 or 60 per cent of the remaining funds聽鈥 by the time the weekend was over.
That Friday and Saturday were the two biggest days for rebate claims in the five-year history of the iZEV program. On the Friday, the four Tesla showrooms accounted for 1,552 of the 2,375 rebates claimed nationwide. On the Saturday, those Tesla outlets took 5,840 of the 6,144 rebates claimed across Canada.聽
The flurry of Tesla claims drained the government fund more quickly than anticipated, leaving hundreds of independently-owned dealerships with no recourse to recoup $10 million in rebates they had fronted to customers.
鈥淲hat you have is program mismanagement that led to some disproportionately negative consequences for many dealerships,鈥 said Stedman. 鈥淭he government clearly should have had better safeguards in place if they knew the program was winding down. This really is a bad outcome for those dealerships that were relying on the rebate.鈥澛
Three EV dealers who spoke to the Star said the rules weren鈥檛 being enforced and Transport Canada was allowing dealerships to back file for rebates after EVs were sold even though the rules prohibited this.
The change to Transport Canada’s website makes it look like this practice was always permitted and conceals the fact that the government wasn鈥檛 enforcing the posted rules, according to interviews with three different EV dealers.
鈥淭he ethics of what鈥檚 been done is questionable,鈥 said Akolisa Ufodike, an assistant professor at York University鈥檚 Schools of Administrative Studies and Public Policy.
However, legally speaking, the minister has the power to overrule or disregard any rules regarding the distribution of government money,聽he said.
When Tesla filed the massive surge of rebates over that final weekend, it caught other dealerships flat footed, having thought they had more time to file for thousands of EVs they had sold.
Terry Budd, who owns eight car dealerships in the Oakville and Hamilton areas, and is still owed about $175,000 in rebates, said it appeared that 鈥淭esla’s done a very, very poor job of their paperwork.鈥
鈥淭here鈥檚 no way they delivered or sold that many cars in a weekend. Clearly, the paperwork was so bad and somebody tuned them up and said, ‘Look, get your paperwork done.’鈥
鈥淭hen all of a sudden Tesla claimed the entire amount over the weekend and cleared everyone else out.鈥
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