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Ontario’s Climate Change Action Plan Focuses on Electric Vehicles

This Canadian province recently passed measures that it hopes will accelerate the transition to more environmentally sustainable transportation.

Published: 15-Jun-2016

By Beth Kelly

In what’s proving to be a somewhat controversial move, the government of Ontario has developed a Climate Change Action Plan that contains provisions to cut down on greenhouse gas pollution. It calls for spending billions in broad areas of the economy, including the transportation industry, home heating and construction, and the money for these proposals will come from a new cap-and-trade program for carbon emissions that will see the province join a continent-wide marketplace with Quebec and California. As a major component of this plan, significant resources will be directed towards promotion of the manufacture and sale of electric vehicles.

According to a study from Energy Companies Alberta, the 119 TWh provided by gasoline and used for personal transportation in Ontario in 2006 could have been entirely replaced by 28 TWh of electricity produced in renewable power plants if all the vehicles were powered by batteries. This means that if that plan works, more widespread EV adoption and use could be the linchpin for reducing carbon emissions by orders of magnitude.

The province of Ontario estimates that the revenues generated from cap-and-trade auctions will amount to some $1.9 billion annually. It will use these funds to implement the measures indicated in the Climate Change Action Plan. Detailed spending numbers have been released for the period 2017 – 2021 even though the plan also contains long-term goals for the more distant future.

The goal is for EVs to account for 5 percent of vehicle sales in Ontario by 2020 and 12 percent by 2025. By 2024, the province hopes that every multi-vehicle household will possess at least one EV. Current sales of these battery-powered automobiles represent less than 1 percent of all new vehicles sold. To hit its ambitious targets, the province is devoting $285 million over a four-year period to encourage people to buy electric automobiles.

Consumers purchasing a new EV will be entitled to a rebate of up to $14,000 along with a further $1,000 for the installation of a home charging station. The province will waive its portion of the HST tax on such purchases, and it will negotiate with the federal government to eliminate buyers' HST tax liability altogether. People who own old, gas-guzzling automobiles will get money to trade them in for electric models. Charging infrastructure will be built across the province, and access will be free of charge.

In addition to the projected $285 million to be spent on these provisions, a further $140 million will go towards the establishment of a research center at a major Canadian university to develop new green vehicle tech. Many world opinion leaders and philanthropists have already expressed interest in funding clean-energy research. There's no reason why Canada can't partner with them in these efforts.

Ontario already has a program in place to motivate drivers to buy battery-run cars, but the results have been less than stellar. Launched six years ago, this initiative was recently beefed up to permit rebates of up to $10,000 on a qualifying EV purchase. Nevertheless, there were only an estimated 5,800 electric vehicles on the road in Ontario as of February 2016. Some contend that electric vehicles are currently not competitive with regular automobiles because of limited range and high cost, and they say that the new rebates will not be enough to overcome these drawbacks.

The auto industry was worried that it would be mandated to produce a certain quantity of EVs each year, many of which would then sit in lots unsold. However, the province has indicated that it will not be targeting manufacturers or dealers with onerous regulations or requirements. The thrust of its activities will be geared towards rewarding purchasers. The Canadian Vehicle Manufacturers' Association and the Ontario Trucking Association have expressed approval of the province's plan.

Liberals welcome the vision contained in the Climate Change Action Plan developed under the leadership of Premier Kathleen Wynne. However, Progressive Conservatives criticize the costs involved, which are projected to be around $7 billion over four years and perhaps as high as $8.3 billion. The Green Party thinks that the proposals are a good idea but feel that more work needs to be done to close up loopholes that big business could exploit.

Although the optimistic targets for EV ownership contained within Ontario's Climate Change Action Plan might not be reached, it's almost certain that many more such automobiles will be sold in the future than in the past. The installation of the appropriate charging equipment, as provided for in the plan, along with reductions in sticker price and improvements in features will make such cars more competitive with gas-powered vehicles in the coming years, including those used in mass transit.

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