Alberta road users are promised a somewhat similar tax burden with the introduction of a new $200 annual fee for electric vehicles (EVs). The 2024 provincial budget, released February 29, announces the new tax — which is considered on par with what the average vehicle owner pays in fuel tax each year — will be collected beginning in January 2025.

“EVs tend to be heavier than similar internal combustion vehicles and cause more wear and tear on provincial roadways while their owners pay no fuel tax,” the budget document states. “While fuel tax revenue is not dedicated to funding construction and maintenance of provincial roads, there are nevertheless fairness concerns with drivers of other vehicles and longer-term challenges associated with declining fuel tax revenue.”

A similar tax came into force in neighbouring Saskatchewan in 2021, with EV owners paying $150 per vehicle annually. In Alberta, the EV tax is projected to raise about $1 million in 2024-25 after subtracting out $3 million in implementation costs for Alberta registry services. Earnings are expected to rise to $5 million in 2025-26 and $8 million in 2026-27.

Enabling legislation is slated to be introduced in the fall of 2024. Hybrid vehicles will be exempt from the EV tax.

“While the number of electric vehicles in Alberta is currently low, EVs are being purchased in ever-increasing numbers, “ the budget document states. “Government will continue to review the sustainability of the fuel tax, including the increasing use of alternative fuels, and consider changes to protect tax revenue.”