Canada has suspended all rebate payments for Tesla and barred the company from future electric vehicle incentive programs, Transport Minister Chrystia Freeland announced on Tuesday.
The decision comes amid escalating trade tensions with the United States, following a wave of new tariffs imposed by President Donald Trump.
Freeland stated that all rebate claims would undergo individual investigations before any payments are approved. Additionally, she directed the transport department to revise eligibility rules for future incentive programs to exclude Tesla for as long as U.S. tariffs against Canada remain in place.
The freeze affects C$43 million ($30.11 million) in rebate payments to Tesla, with the decision coming just ahead of Prime Minister Mark Carney’s announcement of a general election on April 28. The Toronto Star previously reported that Tesla dealerships had submitted an unusually high number of rebate claims before the program ended in January, including a Quebec City dealership that documented over 4,000 sales in a single weekend, amounting to nearly C$20 million in subsidies.
Earlier this month, Toronto halted financial incentives for Tesla vehicles used as taxis or ride-share vehicles due to ongoing trade disputes. Tesla CEO Elon Musk, a key Trump ally, has also been leading efforts within the White House to streamline federal government operations as head of the Department of Government Efficiency.
