By virtue of a program put in place by the Quebec government, a subsidy, which can amount to $8,000, is offered where an electric vehicle is purchased or rented. Where the car dealer is a partner in this "Drive Electric Program" and the participant authorizes the government to pay the rebate directly to the dealer, this assistance is actually a deposit paid or to be paid to the dealer on the purchase or lease. What is the incidence of the subsidy on CCA where the pre-tax cost of the vehicle is $25,000, $35,000 or $45,000?
After noting that such assistance did not reduce the cost of the vehicle for purposes of s. 6(2), CRA stated:
[T]he capital cost of an electric vehicle determined after the application of paragraph 13(7)(g) will be reduced by the amount of assistance that the taxpayer received or is entitled to receive… .
[A]n electric vehicle whose cost is $25,000 will be included in Class 10 and an electric vehicle whose cost is $35,000 or $45,000 will be included in Class 10.1.
Furthermore, in the examples, the capital cost of the electric vehicles for CCA purposes will be $17,000, $22,000 or $22,000, respectively. Finally… the capital cost of the electric vehicle will be the same whether the amount of assistance is paid directly to the participant or the participant authorizes the government to pay the amount of the assistance to a partner dealer.