Regina, Saskatchewan — The Saskatchewan government will implement a $150 annual tax for passenger electric vehicles, effective Oct. 1, 2021.
The announcement was made Tuesday alongside the province’s 2021-22 budget. Government officials said the reason for the tax is that electric vehicles do not contribute to highway maintenance through the provincial fuel tax.
Throughout the government’s 2019-20 fiscal year, road-use fuel tax revenues totalled close to $454 million, but road maintenance endeavours totalled a cost of nearly $616 million.
“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,” said the province in the press release.
EV sales remain low in Saskatchewan, with approximately 400 on the roads–but industry organizations worry the new tax could hamper sales further as zero-emissions vehicles gain popularity.
“It is a disincentive when so many other places are offering big incentives for people to drive electric,” said the president of the Saskatchewan Electric Vehicle Association, Matthew Pointer.
“The 400 electric vehicles that we have here in Saskatchewan are only going to raise $60,000. By some people’s estimates, the cost of administrating that fee is actually going to outweigh the benefit of the road tax,” Pointer said.
