Saskatchewan to tax EV owners for road upkeep

Saskatchewan to tax EV owners for road upkeep

Wednesday, April 7, 2021

The newly released 2021-22 Saskatchewan budget commits more than $937 million to upgrade the provincial electricity system and nearly $175 million to underwrite an electricity rebate for SaskPower customers. However, owners of electric passenger vehicles will be charged a new $150 annual levy, beginning in October, to cover a share of road upkeep costs that other drivers fund through fuel tax.

SaskPower’s capital injection for the coming year will go toward generation and transmission projects, including rebuilding power transmission lines, improvements at the EB Campbell hydroelectric station on the Saskatchewan River and construction of the new 350-megawatt natural gas-fired Great Plains Power Station in Moose Jaw. The latter is a multi-year project, with construction expected to begin this year aimed at a 2026 service date.

The $175 million budget allocation for the so-called economic recovery rebate — a 10 per cent discount on monthly SaskPower electricity charges — comes as little surprise since residential and business customers have received it since December 2020. The 12-month program, which was promised in the 2020 provincial election campaign, will cost the Saskatchewan government an estimated $260 million, with $85 million of that drawn from 2020-21 expenditures.

Saskatchewan Government Insurance is the appointed agent to collect the new tax on electric vehicles, which is labelled as a measure for “improving tax fairness” in the budget document. “These vehicles contribute to wear and tear on provincial roadways, but because they do not consume traditional fuels, they are not contributing to highway maintenance through the provincial fuel tax,” it states.

Other drivers aren’t shouldering the full burden either since the budget document also cites a $162 million shortfall between road-use fuel tax revenues and road maintenance expenditures during the 2019-2020 fiscal year. At $150 annually, electric passenger vehicle owners will mostly make a symbolic dent in that deficit, but other vehicle operators may be joining them in the future.

“While this tax will only apply to passenger vehicles, the Government will continue to examine the future potential for expanding the tax to commercial vehicles and interjurisdictional trucking. The Government will also consider options to apply a tax at charging stations,” the budget document states.

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