Skip to content
Renew ICBC GET A QUOTE
B.C.’s Tax Changes on Zero Emission Vehicles (ZEV)
March 10, 2022

B.C.’s Tax Changes on Zero Emission Vehicles (ZEV)

Recent catastrophic disasters in B.C. have clearly illustrated the need for immediate attention to climate change and our collective responsibility to mitigate these inevitable risks. They have reminded us that there is no option other than to secure a low-carbon future for our province and for the planet and that it is vital to our well-being and to the eco-system. We should be conscious of the cause and effects of our actions as the steps we take now can serve well for generations to come.

The B.C. Government has acknowledged accountability and responsibility on their part, further encouraging plans to achieve a net zero future. As outlined in the recent Budget 2022 (which can be found at https://news.gov.bc.ca/releases/2022FIN0005-000251), transportation, industry, buildings, and communities are the greatest sources of greenhouse gases which continue to result in a rise in temperature that is already affecting our climate and our communities. Transportation alone accounts for 39% of emissions and buildings and communities account for 21% according to https://www2.gov.bc.ca/assets/gov/environment/climate-change/action/cleanbc/creatingacleanerfuture.pdf. Here are a few details outlined in the B.C. Government’s plans to support cleaner transportation in our province:

  • Tax changes to the purchase and transfer of zero emission vehicles (ZEV). This change is expected to last until 2027. Vehicles eligible for the exemption include battery electric vehicles, hydrogen fuel cell vehicles, and plug-in hybrid electric vehicles.
  • The purchase or lease of used ZEVs will be exempt from provincial sales tax (PST). The new tax exemption applies to both private and dealer sales; however, for private sales, where ICBC collects the PST, the ZEV must have 6,000 km or more displayed on the vehicle’s odometer to be eligible. The 6,000 km requirement does not apply to sales by GST registrants, such as a dealership, or vehicles imported from outside Canada.
  • The value of new ZEVs subject to the graduated vehicle tax has increased from $55,000 to $75,000. This change means new ZEVs valued under $75,000 are not subject to the graduated vehicle tax. The taxable threshold amount of $55,000 will remain in effect for non-ZEV vehicles. The change for new ZEVs primarily affects B.C. motor vehicle dealers, as they collect the PST at time of purchase during new vehicle sales.
  • Authorizing $249 million in Low Carbon Fuel Credits to continue light-duty zero-emission vehicle rebates.

PST tax shift on home heating equipment cause some concerns as fossil fuel-powered heating equipment, such as furnaces and water heaters, will see an increase from 7% to 12% effective April 1, 2022 since PST is now applied to existing GST, although the B.C. Government also announced a PST exemption on heat pumps, supporting the cost of a new incentive to make heat pumps more affordable for rural and northern communities. Not only will a heat pump cool your home on days where it may feel as though you’re sweltering, it helps filter air pollution caused by some from wildfire allowing us to better prepare for the effects of our province’s changing climate. By making energy-efficient upgrades to commercial or residential buildings, British Columbians are encouraged to reduce energy costs, conserve power, and minimize emissions through space and water heating systems, insulation, windows, doors and ventilation.

Planning to renovate or purchase a new commercial space? Consider energy efficient options to develop a more sustainable space. The Clean BC Better Buildings BC program provides funding and incentivizes businesses to reduce energy use and greenhouse gas emissions in new and existing buildings. Additional details can be found at https://betterbuildingsbc.ca/.

Making conscious decisions in our transportation, home, and business as well as taking steps to move away from fossil fuels will not only benefit the environment, but the B.C. Government’s plans also illustrate they make economic sense in the long run.

Have further questions?  Connect with a Stratis Insurance Advisor today or visit our LinkedIn, Instagram and Facebook for updates and tips!