Ottawa proposes higher luxury-tax threshold for zero-emission vehicles

The federal government is proposing to raise the taxable-value threshold for zero-emission vehicles under Canada’s luxury tax from $100,000 to $150,000.

The Department of Finance says the change would apply to qualifying zero-emission vehicles acquired on or after November 13, 2026, subject to parliamentary approval. The $100,000 threshold would remain in place for other passenger vehicles covered by the tax.

The proposal changes the point at which the federal luxury-tax rules begin to apply; it is not a general purchase rebate. Whether a particular transaction qualifies depends on the legislation and the vehicle’s taxable value, so purchasers and dealers should rely on the final law and Canada Revenue Agency guidance rather than the announcement alone.

The government said the adjustment is intended to reflect the higher cost of some zero-emission models while supporting adoption of lower-emission transportation.

Sources

• Department of Finance Canada announcement, published November 12, 2026.

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