From: Reuters
Published February 15, 2007 12:00 AM

Canada Mulls Tax Credits for Hybrid Cars

OTTAWA -- The Canadian government is considering introducing a tax credit or tax rebate for the purchase of environmentally friendly hybrid vehicles, a government source said Wednesday.


"There's a strong political will to do it," the source said, adding that the idea is being discussed by cabinet and it is possible that tax breaks for fuel-efficient vehicles might be included in the federal budget, widely expected to be introduced in late March.


The provincial government of British Columbia announced Tuesday it was extending a C$2,000 ($1,710) tax exemption on new hybrid vehicles, which lower gasoline use by combining a traditional internal combustion engine with a battery.


Ontario has a tax rebate of up to C$2,000 for fuel-efficient vehicles and Quebec has a tax rebate of up to C$1,000.


General Motors of Canada said Tuesday it would be the first automaker to build hybrid vehicles in Canada but with vehicles not hitting the showroom floors until the fall of 2008.


Finance Minister Jim Flaherty called the GM announcement "wonderful news" Wednesday and said he would meet with auto industry chief executives in Toronto Friday to discuss ways of regulating vehicle emissions and encouraging more use of hybrid vehicles.


"Sure, there are incentives that can be created to help encourage people to drive more fuel-efficient vehicles," he told reporters.


"They (the CEOs) have ideas about incentives, about hybrid vehicles, about ways to be more fuel-efficient ... we should listen to those ideas."


Ford Canada expects its own hybrid production in Canada to begin by 2010. DaimlerChrysler Canada said Wednesday it has no plans to build hybrid vehicles in Canada in 2007 but did not rule out doing so later.


Facing a groundswell of concern about the environment, the minority Conservative federal government has announced several initiatives recently that are designed to combat global warming and air pollution.


On Wednesday it unveiled C$36 million in funding for new programs to promote hybrid and other advanced-technology vehicles.


It plans a C$61 million announcement Thursday to promote more environmentally sound freight traffic, while Tuesday it committed C$10 million to help cities develop programs to encourage people to leave their cars at home.


Source: Reuters


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