This Canadian province will soon tax electric vehicle drivers $200 a year
Drivers with electric vehicles in Alberta will soon have to pay a $200 yearly tax on their vehicles, the Province announced during its unveiling of its 2024 budget on Thursday afternoon.
The Province says although the number of electric vehicles (EVs) in Alberta is currently low, EVs are being purchased in “ever-increasing numbers,” and while electric vehicles tend to be heavier than similar internal combustion vehicles and cause more wear and tear on provincial roadways, their owners pay no fuel tax.
The provincial government added that while fuel tax revenue is not dedicated to funding the 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.”
To make up for that, the Province is bringing in a $200 annual tax on EVs, with a targeted effective date of January 1, 2025.
The tax will be paid when owners register their vehicles and will be in addition to the existing registration fee, with the Province touting that the tax rate is in line with the estimated annual fuel tax paid by the driver of a typical internal combustion vehicle in Alberta.
The tax will not apply to hybrid vehicles and more details on the tax will be released when legislation is introduced in the fall.
Revenue from the tax is estimated at $1 million in 2024-25 and is expected to grow as EV adoption accelerates, reaching $5 million in 2025-26 and $8 million in 2026-27.
Looking to the future, the Province added it will continue to review the sustainability of the fuel tax, including the increasing use of alternative fuels, and consider changes to protect tax revenue.
Alberta will join neighbouring Saskatchewan with such a tax, as the latter implemented a road-use charge on electric vehicles in October 2021.
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