Saskatchewan to implement tax for new electric vehicle owners

Many provinces are looking to subsidize the cost of electric vehicles (EVs), including the federal government, British Columbia, Quebec, Nova Scotia, PEI and the Yukon. These locations have all focused on providing incentive programs and working to reduce costs for EVs; meanwhile, Saskatchewan introduced a tax on new EVs.

Owners of electric passenger vehicles registered in Saskatchewan will be paying a new annual road-use fee of $150, effective October 1, 2021.

"Electric passenger vehicles are being purchased in ever-increasing numbers across Canada and around the world,'' Deputy Premier and Finance Minister Donna Harpauer said. "These vehicles contribute to wear and tear on provincial roadways, but because they do not consume traditional fossil fuels, their registered owners are not contributing to highway maintenance through the provincial fuel tax. The 2021-22 Budget included several measures to improve the fair application of Saskatchewan's taxes, including this new road-use fee.''

In Saskatchewan, road-use fuel tax revenue is dedicated to provincial highway maintenance. In the last fiscal year, road-use fuel tax revenue totalled about $454 million in Saskatchewan, while road maintenance expenditures totalled nearly $616 million.

In Saskatchewan, the average annual fuel tax paid by owners of non-electric (fuel-powered) vehicles is estimated at about $150 per vehicle. This new road-use fee will ensure that owners of electric vehicles pay comparably. The revenue from this fee will be dedicated to provincial highway maintenance.

SaskEV, the association for electric vehicles in Saskatchewan says the new tax, the first of its kind in Canada, impacts less than 1% of all drivers in the province and is also in direct contradiction to the federal government's efforts to increase EV adoption.

"While this new fee will only apply to passenger vehicles, our government will continue to examine the potential for expanding it to commercial vehicles and inter-jurisdictional trucking,'' Minister Harpauer said. "Our government will also consider options to apply a tax at charging stations.''

Saskatchewan Government Insurance will collect the new electric vehicle road-use fee when the vehicle is registered.