2018-05-09 12:00:33Going GreenEnglishLearn about Ontario's Commercial Vehicle Program's incentives for transportation companies that buy alternative fuel vehicles and...https://quickbooks.intuit.com/ca/resources/ca_qrc/uploads/2018/04/Driver-Enjoying-Green-Vehicle-Program.jpghttps://quickbooks.intuit.com/ca/resources/going-green/green-commercial-vehicle-grants-program/Ontario's Green Commercial Vehicle Program Grants Benefit Small Business Truckers

Ontario’s Green Commercial Vehicle Program Grants Benefit Small Business Truckers

4 min read

When you own a commercial trucking business, green vehicles and fuel saving devices can help you save money in the long run, but investing in those items can be expensive upfront. To help offset your costs, the Ontario Transportation Ministry offers cash-back incentives. Sound interesting? Here are the details of the Green Commercial Vehicle Program.

Are You Eligible?

The program is open to businesses, municipalities, nonprofit corporations, and Aboriginal businesses, communities, and organizations involved in commercial trucking or transportation. In addition to falling into one of those categories, you must be located in Ontario and have the following elements in place:

  • A business number from the Canada Revenue Agency
  • A Commercial Vehicle Operators Registration safety rating of "satisfactorily un-audited" or higher
  • A qualifying purchase

Which Green Purchases Qualify?

To qualify for incentives through this program, your business or organization can purchase a vehicle that uses alternative fuel. That includes vehicles that run on electricity or natural gas as well as diesel-natural gas dual vehicles. Additionally, the vehicles must weigh at least 4,536 kg or more, fall into class three to eight, and be primarily operated in Ontario. Of course, the vehicles must also be insured, plated, and roadworthy, and they can’t be used for passenger transportation.

On top of that, there are incentives for buying aerodynamic devices, anti-idling devices, and electric refrigeration units. Each of those categories includes a number of different products. For instance, side skirts that minimize drag under your trailer and boat tails that make the back of your trailer more aerodynamic both fall under the aerodynamic category.

To be on the safe side, you may want to check the program’s list of qualifying items before you make your purchase.

How Much Is the Incentive?

The exact amount of the incentive varies, but as of 2018, it can be worth up to half of the item’s purchase price including tax. For fuel-saving devices, the incentive is worth 30 to 50% of the purchase price and the installation cost. To explain, imagine you purchase an electric auxiliary power unit for $1,700 and you pay $1,000 for installation. The total cost is $2,700, and you qualify for a 50% incentive which is worth $1,350. Note that incentives for this particular item cap at $6,000, and all the other items in the program have similar caps.

For alternative fuel vehicles, the incentives work a bit differently. Rather than being based on the purchase price of the vehicle, these incentives apply to the difference in price compared to a conventional vehicle. For instance, imagine that you buy a new natural gas class six commercial truck. It costs $100,000, which is $20,000 more than the same size truck that uses traditional fuel. In this case, your incentive is based on the $20,000, and as the rate is 30%, that puts $6,000 back in your pocket. Note that these are just sample numbers and that this incentive caps at $30,000. However, the cap is per vehicle, so if you make multiple green investments into your company, you can claim multiple incentives.

What’s the Early Adopter Incentive?

When the transportation ministry initially rolled out this program, it sweetened the deal with an early adopter incentive. Available prior to March 31, 2018, the early adopter program increased the incentive by about 10% in each of the various categories, and you could claim the incentive for up to 10 purchases.

But, even if you missed that window of opportunity, the incentives are still generous, so you may want to take the time to apply.

How Do You Apply?

You can apply for the program through the Grants Ontario website. To use that portal, you need to enroll in the one-key transfer payment common registry, but once that’s done, you can fill out the entire application online. You have to show proof of purchase, and you must share details about your bank account, because the incentive is sent to your account via electronic funds transfer.

If you apply before you receive the vehicle and the manufacturer takes more than six months to deliver it, you can request an extension.

What Data Do You Need to Share?

To participate in this program, you may need to share some data. With your application, you must share information related to the vehicle and how you plan to use it. Then, the only additional requirement is that you have to own the vehicle for at least 36 months. If you sell the vehicle or transfer ownership before that time, you may need to return the incentive.

Finally, you must also agree to participate in a data collection initiative. The program’s reps can request your participation at any time in the 36-month period, and the data collection efforts last for 12 months.

If you’re selected, the ministry uses a telemetrics device to collect operational data about your vehicle. If you don’t have a telemetrics device, the ministry installs one for you.

Alternative fuel vehicles and fuel-saving devices promise to reduce how much your business spends at the fuel pumps, but unfortunately, investing in those devices can be expensive. To lower the cost of your investment, you may want to check out this program or explore other grants or rebates for commercial drivers in Ontario.

Information may be abridged and therefore incomplete. This document/information does not constitute, and should not be considered a substitute for, legal or financial advice. Each financial situation is different, the advice provided is intended to be general. Please contact your financial or legal advisors for information specific to your situation.

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