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What B.C. Businesses Need to Know About the EV Transition

British Columbia is leading the way in Canada's shift to zero-emission vehicles (ZEVs). Statistics Canada says that nearly one in five of all new vehicles registered in the province in the first quarter of 2023 was a ZEV, the highest percentage in the country.

There is still a long way to go in the transition to electric vehicles—and businesses need to consider how ZEV sales targets, provincial and federal incentives, B.C.-wide charging infrastructure and new regulations and legislation could affect them.

ZEV Sales Targets

The CleanBC plan was released in 2021 and strengthened the Zero-Emission Vehicles Act to require 26% of light-duty vehicle sales in the province to be ZEV by 2026, 90% by 2030 and 100% by 2035.

Proposed federal regulations were announced in December 2022. They set similar annual sales targets for new light-duty zero-emissions vehicles offered for sale in Canada, also reaching 100% by 2035.

Nationally, ZEVs accounted for 8.6% of all new motor vehicles registered in the first three months of 2023. This is up from 7.7% in the first quarter of 2022, but a decline from 9.6% in Q4 2022.

ZEV Incentives Available to Businesses in B.C.

B.C.-based businesses can get provincial rebates of $3,000 off battery electric and long-range plug-in hybrid vehicles and $1,500 off plug-in hybrid vehicles with an electric range less than 85 km. The maximum manufacturer's suggested retail price for eligible cars is $55,000 and $70,000 for larger vehicles.

The federal Incentives for Zero-Emission Vehicles (iZEV) Program provides up to $5,000 toward the cost of buying a light-duty vehicle and has been broadened to capture larger ZEV models. This is applied in addition to B.C.'s incentive.

There are also federal tax write-offs for all businesses to purchase EVs. Businesses that receive an incentive from the federal iZEV Program cannot use the tax write-off for ZEVs.

There has been a wide range of new federal incentives announced in the past year to support the EV transition in other areas, including the Critical Mineral Exploration Tax Credit, the Clean Technology Manufacturing Tax Credit and the Clean Electricity Investment Tax Credit.

Charging Infrastructure

Meeting British Columbia's ZEV targets will require a significant build-out of its charging infrastructure. BC Hydro is predicting there will be around 350,000 EVs on the province's roads by 2030. Businesses with EV fleets need to be sure the network is keeping up with their vehicle purchases and unique needs.

B.C. has one of the largest public charging networks in Canada, with more than 3,800 charging stations at the end of 2022. New funding for 250 more was announced in April 2023.

The standardization of charging stations is a hot topic in EV adoption. Canada does not currently have federal performance and reliability standards for EV chargers. In the private sector, numerous auto makers are working towards using standardized EV charging networks.

The commercial real estate sector should be thinking about the siting of chargers in both existing and new buildings. In May 2023, the B.C. government passed legislation to enable strata corporations and owners to more easily install EV charging infrastructure.

Canada's Clean Electricity Regulations

The federal government announced its draft Clean Electricity Regulations (CER) on August 10, 2023. Ottawa says that to achieve a net-zero emissions economy by 2050, Canada's electricity supply will need to at least double by then to meet surging demand. B.C. is projected to see the greatest net cost savings by province (by far) under the proposed regulations. About 95% of the electricity produced in B.C. comes from renewable sources.

A 75-day consultation period is now open and businesses can provide feedback on the regulations until November 2, 2023 through the Online Regulatory Consultation System.

Right to Repair

Businesses should be following the significant "right to repair" legislation that is drawing increasingly closer to becoming law in Canada. It is expected to have a big impact on the automotive repair industry and owners of EVs.

An Act to amend the Copyright Act (diagnosis, maintenance and repair) would reduce the ability of original equipment manufacturers (OEMs) to lock access to in-built, and embedded software, where the access is necessary for diagnosis, maintenance and repair of products and equipment.

A Challenge and an Opportunity

The rapid shift to ZEVs offers businesses in greater Vancouver an opportunity to reduce their greenhouse gas emissions intensity, and potentially to reduce costs and modernize operational processes.

Such a major transition is not, however, without its risks. Businesses who have never worked closely together (or even at all) may find themselves integrated on new projects. Complex new, and overlapping, legal relationships are emerging regularly.

Businesses should anticipate how they will manage these kinds of issues to mitigate the risks of a new ZEV normal in Canada.

Duncan McPherson is a partner in Bennett Jones' Vancouver office, who advises on energy and infrastructure transactions.
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