Saskatchewan to Double Annual Tax on Electric Vehicles
Saskatchewan is set to significantly increase its annual tax on electric vehicles (EVs), a move that has already sparked debate. As part of its 2025-2026 Budget, the province announced on Friday that it will double the Road Use Charge for registered electric vehicles.
Starting June 1, 2025, the annual charge will rise from $150 to $300. This tax, introduced on October 1, 2021, was met with criticism from EV advocates upon its initial announcement. The government has framed it as a way to recoup fuel tax revenue that it misses out on from EV drivers, who do not pay fuel taxes.
The number of electric vehicles registered in Saskatchewan has increased substantially in recent years. Statistics Canada data indicates a rise from approximately 400 EVs four years ago to nearly 1,400 by the end of 2024.
In a statement, the government explained that while EVs contribute to wear and tear on provincial roadways, they do not pay into highway maintenance through fuel taxes. All revenue generated by the Road Use Charge is allocated to provincial highway maintenance. The government believes that increasing the tax to $300 better reflects the costs of road maintenance and will help to ensure EV owners contribute an amount comparable to owners of gasoline-powered vehicles.
Saskatchewan follows Alberta’s lead, which also has an annual EV tax, which went into effect January 1, 2025. This situation contrasts with some other Canadian provinces that offer incentives to encourage EV purchases. In Alberta, EV owners must pay $200 annually to legally drive on provincial roads.
The government believes that increasing the tax to $300 better reflects the costs of road maintenance and will help to ensure EV owners contribute an amount comparable to owners of gasoline-powered vehicles.
It’s also worth noting that the Canadian government’s Incentives for Zero-Emission Vehicles (iZEV) program was abruptly halted on January 13 due to a lack of funds. The program’s future is uncertain and its return will depend on the outcome of the upcoming federal election, expected this spring.
