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Alberta announces fuel tax for electric cars to promote ‘tax fairness’


The Alberta government unveiled a $200 annual tax to electric vehicles (EV) in line with the annual fuel tax paid by drivers of gas vehicles.

The tax, which enters into effect next January, tries to address concerns about fairness as fuel tax revenue declines.

“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 Alberta government said in a press release.

During a Thursday news conference, Alberta Finance Minister Nate Horner said the tax rate is in line with the estimated fuel tax paid by a typical driver of gas vehicles. “I’m interested in fixing the roads,” he said. “We need everyone to help.”

When drivers renew their registration next year, a $200 surcharge will be added to their tab. The tax will not apply to hybrid vehicles, reported True North.

According to revenue projections in Budget 2024, the EV tax will generate $1 million in revenue for the province in fiscal year 2024/25, rising to $5 and $8 million in subsequent years.

“Are you expecting that much growth in electric cars?” asked a reporter from The National Post. “This was brought up to me in the early days when we were discussing the fuel tax,” replied Horner. 

“I can tell you; I’ve had a lot of letters to my office, clearly saying that this is a fairness issue, and everyone contributes to the maintenance of the roads,” he added.

Horner said his government “had no issues bringing in” the EV tax and considers it to be “extremely defensible.”

“If Trudeau says they’re not going to sell gas-powered vehicles by 2035, I guess we better get on with it.”

More details are expected when Alberta tables legislation this fall.

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