CD Howe Institute recomends changes to Canada's ecoAuto program

The C.D. Howe Institute is a Canadian think-tank that has taken a look at the ecoAuto program introduced by the government there earlier this year. The controversial program created a sliding scale of rebates and taxes based on new vehicles fuel consumption. Buyers of more efficient vehicles got rebates from the government while those who opted for gas-guzzlers had to pay extra taxes.
The C.D. Howe study supported the premise of using market incentives to get people to move to more efficient vehicles. The problem is the way the government implemented the program. There was little consultation with automakers and no phase in period for the program. However, the biggest issue with the program is the arbitrary nature of the thresholds. Cars that get mileage better than the threshold qualify for a rebate while those that fall below get nothing. A car like the Honda Fit that just missed the threshold may get real world mileage similar to a Toyota Yaris that did qualify but got no rebate. The rebates should be proportional to the mileage ratings to make it more fair. The full report is available as a PDF at the read link.

[Source: C.D. Howe Institute]

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