Federal investigation clears carmaker of wrongdoing after anger over subsidies
This article was written by Marco Chown Oved and was published in the Toronto Star on September 19, 2025.
Federal investigation clears carmaker of wrongdoing after anger over subsidies
Tesla used an automated system to make a run on the bank of Canada’s dwindling EV subsidies, outmanoeuvring Canadian dealerships that filed claims manually and were left short millions of dollars, the Star has learned.
In January, when Ottawa announced that funds were running low in its electric vehicle rebate program, it sparked an “unprecedented surge” as the American EV giant filed more than 8,600 rebate claims over the next 72 hours, a rate of more than two per minute, around the clock.
When the Star broke the story in March, it sparked outrage at the idea that Tesla could have sold so many cars over a single weekend and prompted then minister of transport Chrystia Freeland to freeze payouts pending an audit of each claim.
The resulting investigation into Tesla’s conduct, obtained by the Star, cleared the company of wrongdoing and found the cars weren’t actually sold during that last weekend.
Instead, the investigation found the company employed a robot to file a batch of back claims for cars sold months and even years beforehand.
“Since early in the iZEV Program, Tesla Motors Canada has used a tool that allows for (an) accelerate(d) submission of claims, and correspondingly, they have submitted
claims at a faster rate than other dealerships,” states a memo to the deputy minister of transport summarizing the results of the investigation, obtained via accesstoinformation legislation.
“Tesla is the only authorized seller who submits claims in bulk.”
The Transport Canada investigation found Tesla’s claims covered EVs delivered to customers as far back as Oct. 14, 2022, and as late as Jan. 30, 2025, nearly three weeks after the iZEV program shuttered.
In all, Tesla claimed $43.1 million in rebates over the threeday period, “significantly contributing to the surge,” the memo states.
Tesla accounted for 89 per cent of all funds claimed during the final weekend.
“The number of claims submitted by Tesla over two days just before the program pause has generated public and industry criticism. The public may not understand how Tesla Motors Canada could claim such a high volume of incentives between the pause announcement and the pause itself,” states the memo.
“It’s important to clarify that, while mediareported figures are accurate … the data has been misinterpreted. The term `submitted’ does not indicate that the vehicles were sold on that specific day. Rather, `submitted’ refers to the date on which the requests were entered into the iZEV portal, which may not align with the actual date of the delivery of the vehicles.”
The confusion was compounded by program rules on Transport Canada’s website that stated dealerships “must” file claims before delivery to the customer. In practice, this rule was not enforced and backfiling for EVs that had already been shipped out was common practice across the industry.
Tesla’s claims for EVs sold nearly twoandahalf years prior were approved because “the vehicles were delivered during the eligible period of the iZEV Program (before the program paused)” on Jan. 12, the memo states. The Teslas delivered after that date were deemed eligible because “those vehicles were preapproved before Jan. 12, 2025, but delivered afterwards.”
Tesla and Transport Canada did not respond to emailed questions for this story.
The Monday morning following the program’s pause, when hundreds of independently owned Canadian car dealerships attempted to file for reimbursement of rebates they had given customers, they found the online portal had been deactivated weeks ahead of schedule, leaving them out of pocket an estimated $10 million.
They were outraged that the federal government had cut them off while tens of millions of taxpayer dollars flowed to Tesla, which is run by CEO Elon Musk, who was a key figure in U.S. President Donald Trump’s White House as it waged a trade war against Canada.
In July, Ottawa reopened the iZEV claims portal and pledged that dealerships would be made whole. At the time, those dealers were told they could not submit claims for EVs delivered after the program ended on Jan. 12.
News that Tesla received reimbursement for rebates on cars delivered after the program ended will not be well received by EV buyers, many of whom didn’t receive their expected rebates because their vehicles weren’t delivered on time.
“They’re protecting the dealerships but not the people who were supposed to benefit from the EV program,” said Sherine Young, who didn’t get the rebate after ordering an EV in 2024 and receiving it in April this year.
“They should be honouring when you actually purchased the vehicle because that was within the program’s time frame,” she told the Star this summer.
As the only electric vehicle dealer to employ a “bulk submission” sys
Canadian car dealers were outraged that the federal government had cut them off while tens of millions of taxpayer dollars flowed to Tesla, which is run by CEO Elon Musk, a key figure in U.S. President Donald Trump’s White House as it waged a trade war against Canada
tem, Tesla had overwhelmed the EV rebate system in the past and had been warned by the federal bureaucrats to knock it off.
“Because Tesla didn’t provide upfront notification for their bulk submission, it has been difficult for the iZEV program,” states the memo. “The iZEV team met several times with Tesla Motors Canada to request that they submit on a more regular basis and, as a result, reduce the number of claims submitted in bulk.”
Nevertheless, the surge in claims was anticipated by federal bureaucrats, who warned their superiors before the program was wound down that this was likely to occur.
“It is likely that when a program pause announcement is made, the manufacturers and dealerships will create a surge of requests … to ensure they receive the reimbursement for the incentives they already provided. This may speed up the depletion of funds,” states a December 2024 memo to then transport minister Anita Anand.
“Many manufacturers/dealerships do not proceed with the required eligibility assessment prior to the delivery of the vehicles (they perform this step after the delivery, even if instructed to submit before) … As a result, there are many vehicles already delivered for which the funds have not yet been reserved.”
My Climate Change Website 