Canada is to extend its existing zero emission vehicle incentive to include off-road vehicles, providing a boost for the country’s mining sector at a time when it is looking to decarbonise operations.
In an announcement at the Prospectors & Developers Association of Canada’s (PDAC) annual convention in Toronto, Canada, taking place this week, the government said the move was predicated on helping Canada achieve its climate goals and keep its industries competitive.
This incentive would provide a 100% write-off of the purchase cost of eligible zero-emission vehicles and automotive equipment in the year they are put into use, the government said. It builds on the temporary incentives announced in the 2019 budget for on-road vehicles.
“Canadians expect their government to take ambitious action to protect our environment, while growing our economy and creating new jobs and opportunities for workers and businesses,” the government said. “To do this, we must support measures to accelerate Canada’s clean energy transition and help our businesses adopt the sustainable technologies of the future.”
It added: “This new incentive would encourage businesses, including in sectors like mining, transportation, and agriculture, to take advantage of opportunities to upgrade to newer, cleaner technologies.”
Justin Trudeau, Prime Minister of Canada, said: “We are supporting businesses that are making investments today to help protect our environment for future generations. By making it more affordable for Canadian businesses to make the switch to zero-emission technologies, we can help accelerate our transition to a low-carbon, clean-growth economy and create good middle-class jobs.”
Under this new incentive, to be eligible for an income tax deduction of 100%, vehicles would need to be available for use before 2024. The deduction allowance would decrease to 75% for 2024 and 2025, and would decrease to 55% for 2026 and 2027. Vehicles not available for use before 2028 would not be eligible for the accelerated deduction allowance, the government said.