Albertans face new taxes on EVs, vaping products as of Jan. 1

Albertans who drive Teslas and other fully electric vehicles will have to pay an extra $200 when they renew their annual vehicle registrations starting Jan. 1. 

The EV tax is one of two tax increases that take effect on Wednesday. A tax on vaping products also starts that day.

Both measures were announced last February in the province's 2024-25 budget.

Finance Minister Nate Horner justified the EV fee because owners don't pay a fuel tax, which is used to maintain provincial highways. The province also says EVs are harder on pavement than gas-powered vehicles because of their heavy batteries.

William York, Edmonton-based president of the Electric Vehicle Association of Alberta, said the provincial government is using the fee to punish EV owners. He disputes the reasons behind it. 

York said gasoline-powered pickup trucks and SUVs can be heavier and harder on roads than many EVs. He said gasoline vehicles impose a different cost on society by polluting the air and environment. 

"Their pollution isn't taken into account," York said. "We kind of call this in our circles 'the clean air tax' because they're attacking vehicles that actually make the air cleaner."

York said the tax likely won't dissuade potential EV buyers due to the bigger savings from not having to pay for gas and oil changes.

The federal Liberal government wants to ban sales of new vehicles powered by gasoline starting in 2035. 

The provincial vaping tax will be applied starting Wednesday in addition to the current federal taxes.

The rate is $1.12 per 2 millilitres for the first 10 millilitres of a product, then $1.12 per 10 millilitres for any additional amount.

The province is adding the tax to keep young people from buying the products.

Les Hagen, executive director of Action on Smoking and Health, said price increases have been effective in reducing tobacco smoking among youth. 

"We anticipate the same with a vaping tax increase," he said. "There is evidence showing that vaping taxes actually do help to reduce youth vaping."