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February 27, 2008

No More Rebates for Green Cars

The Conservative government is eliminating a rebate program for fuel-efficient cars after less than two years. So if you want to get a fuel-efficient car for less you had better do so before the end of 2008.

The federal government announced yesterday that it will no longer offer rebates ranging from $1,000 to $2,000 on eligible 2006, 2007 and 2008 models under the ecoAuto program after the end of 2008. It was first announced in March 2007.

"The program will not be available beyond the 2008 model year," said a one-line statement in the government's budget papers.

However, the government added it will keep its gas-guzzler tax or "Green Levy" of up to $4,000 on a few big sport-utility vehicles.

Part of the problem was that consumers had to wait several months before the program started sending cheques to motorists who qualified. Automakers also had to wait months before knowing which vehicles would qualify.

The Conservatives are now favouring a gas tax idea, but this idea will not effect wealthy SUV drivers who can easily afford higher gas prices. Instead such a gas tax would harm poor drivers the most and drive up inflation on food.

Some industry analysts and several manufacturers opposed the rebate program because they said it also gave a few automakers an unfair competitive advantage.

Honda Canada responded by offering $1,000 incentives on two of its popular fuel-efficient models that didn't qualify for the rebate last year. Honda argued that the program penalized fuel-efficient vehicles that don't compromise on safety.

Another solution would be to up the levy on gas guzzlers by an extra $1000 for ever year, or to immediately double the levy. The money would go towards developing more hydrogen fuel cell technology and build a distribution network across Canada.

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