Canada Proposes Raising Luxury Tax Threshold for Zero-Emission Vehicles to $150,000
The Government of Canada announced a proposal to increase the luxury tax price threshold for fully electric and hydrogen-powered vehicles from $100,000 to $150,000. The measure, effective November 13, 2026, subject to parliamentary approval, accompanies Budget 2026 commitments to fund more than 55,000 new EV chargers.
On November 12, 2026, the Government of Canada proposed increasing the luxury tax price threshold for fully electric and hydrogen-powered vehicles from $100,000 to $150,000. 
The Honourable François-Philippe Champagne, Minister of Finance and National Revenue, announced the change, which is effective as of November 13, 2026, subject to subsequent parliamentary approval.
All other vehicles remain subject to the existing $100,000 price threshold for the luxury tax. The government stated that the adjustment recognizes the higher upfront costs of zero-emission vehicles, supports the transition to a cleaner, more competitive economy, and aligns with broader emissions targets.
The announcement coincides with infrastructure commitments outlined in Budget 2026. The budget commits $587 million over five years, starting in 2027-28, to install more than 55,000 EV chargers through the Zero Emission Vehicle Infrastructure Program. It also includes a $45 million commitment for research and development on charging infrastructure. To date, Canada has supported more than 50,000 EV chargers.
Expanding the electricity system is intended to unlock investment in clean technologies and make it easier for Canadians to drive electric vehicles, particularly in rural communities. Electricity demand in Canada is expected to double by 2050, while the country's grid is currently 80% clean. Globally, electric vehicles are projected to account for 40% of car sales within five years.