Canada has frozen all rebate payments for Tesla and prohibited the electric vehicle manufacturer from participating in future rebate programs, as stated by Transport Minister Chrystia Freeland. No rebate payments will be processed until each claim is individually investigated for validity. Freeland also instructed the transport department to revise eligibility requirements for future iZEV programs, ensuring that Tesla vehicles remain ineligible as long as "illegitimate and illegal" U.S. tariffs against Canada are in effect.
Tesla did not immediately respond to a request for comment.
U.S. President Donald Trump has implemented numerous new tariffs, mainly set to take effect in early April, imposing a steep 25% tax on most goods from Canada and Mexico. Trump indicated that automobile tariffs would be introduced soon, though not all of the proposed levies are expected to take effect on April 2.
Canada has frozen C$43 million (approximately $30.11 million) in rebate payments for Tesla. This decision came just before Canadian Prime Minister Mark Carney announced a general election for April 28. Reports indicated that Tesla submitted an unusually high number of EV rebate claims in the final days of the program in January, with one dealership in Quebec City claiming nearly C$20 million by reporting over 4,000 electric vehicle sales in a single weekend.
Toronto had begun providing financial incentives for Tesla vehicles purchased for use as taxis or ride shares earlier this month, amidst ongoing trade tensions with the U.S. Elon Musk, Tesla's CEO and a close Trump ally, has been spearheading efforts to reduce the federal government and budget, leading the so-called Department of Government Efficiency.