Canada freezes Tesla rebates worth $43 million to check each one is valid
Andrew Harnik/Getty Images
- Canada froze rebate payments for Tesla in response to US tariffs and concerns about program abuse.
- Its transport minister said Tesla would remain ineligible as long as US tariffs are in place.
- President Donald Trump imposed 25% tariffs on goods from Canada, with plans for more on April 2.
Canada has frozen a $43 million rebate payment to Tesla and barred Elon Musk's company from similar national schemes.
Transport Minister Chrystia Freeland directed Canada's Transport Department to halt all Tesla rebate payments while it examined each claim individually.
"No payments will be made until we are confident that the claims are valid," she told the Toronto Star on Tuesday.
The move follows a surge in Tesla rebate claims, which spiked from 300 to about 5,800 a day before the scheme ended in January, raising concerns about potential abuse.
Freeland also ordered her department to amend the eligibility criteria to ensure Tesla remains ineligible for rebates as long as "illegitimate and illegal US tariffs are imposed against Canada."
The provinces of British Columbia, Nova Scotia, Prince Edward Island, and Manitoba also removed Tesla from their own EV rebate programs this month.
The rebate freeze comes amid escalating trade tensions between Canada and the US. President Donald Trump has imposed 25% tariffs on goods traded between Canada and Mexico, with limited exceptions for goods traded under the United States-Mexico-Canada Agreement.
Trump has also placed 25% tariffs on all steel and aluminum imports and plans to roll out additional tariffs on April 2. On Monday, he said he "may give a lot of countries breaks" without giving further details.
Canada announced 25% retaliatory tariffs on about $30 billion worth of US goods on March 13, with plans to expand them if Trump's tariffs remain in place.
Tesla's sales in Canada dropped by about 70% in January compared with December 2024, largely due to a pause in federal and regional rebates, according to Shop4Tesla.com.
The automaker also saw a 42% decline sales in Europe in January and February, as well as an 11% drop in new US registrations in January, amid a backlash over Musk's aggressive cost-cutting efforts at DOGE and his courting of far-right political parties in Europe. His actions have sparked protests against his EV maker, instances of vandalism, and boycott calls.
Canadian Prime Minister Mark Carney, who launched his election campaign on Sunday, said on Monday he was open to discussions with Trump "on our terms as a sovereign country."