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Canada freezes rebate payments to Tesla, bars it from future programs due to tariffs

Canada has frozen all rebate payments to Tesla and banned the electric-vehicle maker from future EV rebate programs, Transport Minister Chrystia Freeland said on Tuesday.

CEO Elon Musk is a close ally of Trump, who has slapped hefty tariffs on Canada

Thomson Reuters ·
A woman styands in front of a car dealership holding a protest sign.
People attend a protest rally outside a Telsa dealership in Ottawa against CEO Elon Musk's political influence last week. Some of the actions taken by Canada in response to American tariffs have specifically targetted Musk's companies. (Justin Tang/The Canadian Press)

Canada has frozen all rebate payments for Tesla and banned the electric-vehicle maker from future EV rebate programs, Transport Minister Chrystia Freeland said on Tuesday.

No rebate payments will be made until each claim is individually investigated and determined to be valid, Freeland said in an emailed statement shared by her office.

Freeland also directed Transport Canada to revise eligibility requirements for future Incentives for Zero-Emission Vehicles (iZEV) programs to ensure that Tesla vehicles are not eligible as long as the "illegitimate and illegal U.S. tariffs are imposed against Canada."

Tesla did not immediately respond to a Reuters request for comment.

Liberal MP Chrystia Freeland, candidate for the leadership of the Liberal Party of Canada, answers questions from journalists as she makes her way to a meeting of the Liberal caucus, in West Block on Parliament Hill in Ottawa, on Thursday, Jan. 23, 2025.
Transport Minister Chrystia Freeland said Teslas would not be eligible for EV rebate programs while the U.S. imposes tariffs on Canadian goods. (Justin Tang/Canadian Press)

U.S. President Donald Trump has imposed a slew of tariffs, with the bulk due in early April, in the form of 25 per cent taxes on most goods from Canada.

Trump on Monday said automobile tariffs are coming soon, although not all of his threatened levies would be enforced on April 2 as previously indicated.

Canada has frozen $43 million in rebate payments for Tesla. The order to stop the payments came before Liberal Leader Mark Carney announced a general election would take place April 28, according to the Toronto Star, which reported the news earlier.

The Star reported earlier this month that Tesla filed an extraordinary number of EV rebate claims in the final days of the program in January, with a single Tesla dealership in Quebec City claiming nearly $20 million in public subsidies by documenting more than 4,000 electric vehicle sales over a single weekend.

Ontario stopped providing financial incentives for Teslas purchased as taxis or ride shares because of trade tensions with the U.S. earlier this month.

Tesla CEO Elon Musk, a close ally of Trump, has been leading the White House effort to shrink the federal government and budget as the head of the Department of Government Efficiency.

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