What Does the iMHZEV Program Fund? Incentive Amounts by Vehicle Class
The Incentives for Medium- and Heavy-Duty Zero-Emission Vehicles (iMHZEV) Program provides point-of-sale federal incentives to help Canadian organizations purchase or lease eligible new commercial ZEVs. Incentive amounts depend on the vehicle class and lease term, and can reach up to $200,000 per vehicle.
As of January 10, 2025, Canada announced a pause to the light-duty iZEV program; however, the medium- and heavy-duty iMHZEV program continues and is scheduled to run until March 31, 2026, or earlier if funds are exhausted. Applicants should plan timelines accordingly.
Definition in 50 words: iMHZEV is a Transport Canada program offering point-of-sale incentives to Canadian organizations for new medium- and heavy-duty zero‑emission vehicles (Classes 2B–8). Amounts vary by class and lease term, up to $200,000 per vehicle. Federal incentives can be stacked with provincial programs up to 75% of MSRP.
Program Funding Overview
Funding model: Point-of-sale incentive (not a tax credit and not a post-sale rebate to the recipient).
Purpose: Reduce upfront costs for medium- and heavy-duty zero-emission vehicle (ZEV) adoption across commercial fleets and public organizations.
Eligible recipients: Canadian organizations and businesses with a registered office in Canada. Individuals are not eligible.
Eligible vehicles: New battery-electric, hydrogen fuel cell, and qualifying plug-in hybrid electric vehicles (PHEVs) with a gross vehicle weight rating (GVWR) greater than 8,500 lb, listed on the official eligible vehicles list.
Timing: Incentive is applied directly on the bill of sale or lease agreement after eligibility is confirmed by the authorized seller.
End date: Currently runs to March 31, 2026, subject to funding availability.
The incentive appears as a line item at the point of transaction once the dealership or authorized seller has verified eligibility and completed program forms. Taxes and fees are applied before the incentive is calculated on the bill.
Funding Amounts & Rates
iMHZEV incentive amounts depend on vehicle class, technology, and lease duration. The following summarizes maximum incentives for eligible vehicles purchased or leased for at least 12 months.
Class 7/8 coach buses and Class 8 hydrogen fuel cell trucks: up to $200,000 per vehicle.
Class 8 battery-electric (350 kWh and up): up to $150,000 per vehicle.
Class 8 battery-electric (under 350 kWh): up to $100,000 per vehicle.
Class 7: up to $100,000 per vehicle.
Class 6: up to $100,000 per vehicle.
Class 5: up to $75,000 per vehicle.
Class 4: up to $75,000 per vehicle.
Class 3 (commercial configuration meeting program criteria): up to $40,000 per vehicle.
Class 2B (commercial configuration meeting program criteria): up to $10,000 per vehicle.
Medium-Duty Passenger Vehicles (MDPVs) with an MSRP equal to or below $100,000 (applies when Class 2B or 3 vehicles do not meet commercial criteria):
Class 2B MDPV: up to $5,000 per vehicle.
Class 3 MDPV: up to $5,000 per vehicle.
Special technology rules:
Plug-in hybrid electric vehicles (PHEVs): eligible for 50% of the full ZEV incentive for the applicable vehicle class, up to a maximum of $50,000.
Class 2B short-range PHEVs (battery capacity less than 15 kWh): eligible for 25% of the full ZEV incentive for that class.
Class 8 fuel cell electric vehicles: eligible for the maximum $200,000 incentive.
Lease proration:
48 months: 100% of the applicable incentive.
36 months: 75% of the applicable incentive.
24 months: 50% of the applicable incentive.
12 months: 25% of the applicable incentive.
Leases under 12 months are not eligible; leases must be at least 12 months.
Annual recipient cap:
Each eligible organization can receive up to 10 incentives or a combined total of $1,000,000 per calendar year, whichever comes first.
Eligible Expenses
The iMHZEV program funds the vehicle itself through a point-of-sale reduction. It does not reimburse downstream costs; instead, it reduces the invoice total once eligibility is confirmed.
Covered item:
Purchase or lease of an eligible new medium- or heavy-duty ZEV meeting program criteria and listed on the eligible vehicles list.
Coverage specifics:
The incentive appears as a discount line item on the bill of sale or lease agreement.
Taxes and fees are calculated and applied to the transaction before the incentive is applied on the bill.
Demonstrator vehicles are eligible if considered new and the odometer reads less than 10,000 km.
The vehicle must meet all applicable Canadian Motor Vehicle Safety Standards, be intended for on-road use, be available for order/purchase/lease in Canada, and be registered in Canada in the recipient organization’s name (as applicable).
For Class 2B and Class 3, the vehicle must either meet the commercial vehicle criteria (e.g., seating for 9 or more, cargo area of at least 183 cm / 72 in., or truck with container attachment capability) or, if not, qualify as an MDPV at or below the $100,000 MSRP cap.
Because iMHZEV is a point-of-sale incentive, no separate grant agreement for the recipient’s expenses is issued. The dealership or authorized seller implements the incentive and later seeks reimbursement from Transport Canada.
Ineligible Expenses
The program’s scope is narrow and focused on the vehicle purchase or lease. The following costs are not funded by iMHZEV:
Charging infrastructure and installation (EVSE, wiring, panels, transformers).
Electricity, fuel, maintenance, insurance, driver training, telematics subscriptions, or operational costs.
Aftermarket accessories or upfits not part of an eligible OEM configuration (unless included in an approved configuration).
Extended warranties, service plans, and financing interest.
Used vehicles or vehicles previously registered.
Off-road vehicles and recreational vehicles (RVs).
Public transit buses and school buses, which may be excluded from eligibility.
Any vehicle not appearing on the eligible vehicles list for its exact year, make, model, and configuration.
Vehicles ordered or delivered in ways that do not meet Canadian availability, safety, registration, and on-road use requirements.
If a cost category is not tied to the eligible vehicle purchase or lease as described, it is generally outside the funding scope.
Expense Documentation Requirements
Recipient organizations do not submit claims to the program. However, keeping thorough records is essential for compliance and audit readiness.
Typical documents you should maintain:
Final bill of sale or lease agreement showing the incentive line item and the lease term (if applicable).
Vehicle identification details (VIN), year, make, model, and configuration matching the eligible vehicles list.
Proof of Canadian registration in the organization’s name (as applicable).
Organization Consent Form completed as part of eligibility verification.
Incentive Received Form completed at the point-of-sale.
For demonstrators, odometer reading under 10,000 km at sale/lease.
Evidence of taxes and fees applied prior to the incentive on the invoice.
Internal records confirming the vehicle is intended for public-road use and meets safety standards.
Authorized sellers must retain and submit the required program documents to obtain reimbursement. Recipient organizations should retain copies for their files in case of audit.
Examples of Funded Projects
The iMHZEV program supports a wide range of on-road commercial and institutional use cases across Canada. Examples include:
Last-mile delivery fleets adopting Class 4 or 5 electric step vans for urban routes in the Greater Toronto Area, Montréal region, or Lower Mainland.
Food and beverage distributors replacing Class 6 single-axle vans with battery-electric models for regional deliveries in Ontario or Alberta.
Municipal solid waste collection upgrading to Class 8 electric refuse trucks for neighbourhood routes in the National Capital Region.
Construction firms integrating Class 7 electric medium conventional trucks for material transport on public-road corridors in Saskatchewan.
Airport or hotel operators deploying Class 7/8 zero-emission coach or shuttle buses for passenger transfers in British Columbia.
Long-haul pilots with Class 8 fuel cell tractors on interprovincial corridors in Quebec and Manitoba.
Fleets adding commercial Class 2B or 3 ZEV pickups and utility vans for field services, or MDPVs under the $100,000 MSRP cap for light-duty passenger applications.
In each case, the vehicle must be listed as eligible, be new at the time of purchase/lease, and be intended for on-road use. Incentive amounts vary by class and technology, and leases under 48 months are prorated.
Funding Disbursement & Claiming Process
Point-of-sale application: The dealership or authorized seller verifies organizational eligibility, completes the Organization Consent Form, and obtains the Incentive Received Form from the recipient.
Invoice presentation: Taxes and fees are applied first; the incentive then appears as a separate line on the bill of sale or lease.
Reimbursement: The authorized seller submits required documentation to Transport Canada for reimbursement. Recipient organizations do not file reimbursement requests.
No fees or deposits: You should not be charged a fee or required to place a special deposit to receive the incentive. The incentive should not be paid to you later by cheque.
If the incentive was not applied: Contact your authorized seller immediately. In limited circumstances, a post-sale process may be available; timelines and requirements vary and should be confirmed with the seller and program administrators.
Processing timelines can vary based on volume and documentation completeness. Ensure your seller is registered with the program and familiar with the iMHZEV portal and forms.
Stacking Rules
Federal + provincial/territorial stacking: The federal iMHZEV incentive can be combined with eligible provincial or territorial incentives.
Maximum combined assistance: The total of federal and provincial/territorial incentives cannot exceed 75% of the vehicle’s MSRP.
Other public funds: If your project involves additional public funding, confirm the stacking implications, as exceeding the 75% MSRP cap is not permitted.
Internal policy: Some provincial programs may have their own rules. Align purchase planning to comply with all programs simultaneously.
Practical example:
A Class 6 battery-electric truck eligible for up to $100,000 federally can also receive a provincial incentive, provided the combined amount remains at or below 75% of the vehicle’s MSRP.
Real-World Budgeting Tips
Match class to duty cycle: Select the smallest vehicle class that meets your operational needs; incentive amounts scale with class, but so do acquisition and charging costs.
Consider lease term strategically: If cash flow is a priority, a 24- or 36‑month lease may help, but remember incentives are prorated. A 48‑month term unlocks the full amount.
Account for infrastructure separately: Charging hardware and installation are not covered by iMHZEV. Budget for site assessment, electrical upgrades, and demand charges.
Validate MDPV rules early: For Class 2B/3 MDPVs, confirm the MSRP is at or below $100,000 and verify whether your configuration meets commercial criteria; this affects the incentive amount ($5,000 vs. higher commercial rates).
Check PHEV specifics: Short‑range Class 2B PHEVs receive only 25% of the full ZEV incentive for the class. Ensure battery capacity and range align with your duty cycle and budget.
Plan for program limits: Organizations are capped at 10 incentives or $1,000,000 per calendar year. Stage purchases across years if needed.
Monitor funding status: The program runs to March 31, 2026, subject to funds. Align orders, deliveries, and lease start dates to ensure eligibility windows.
Ensure seller readiness: Work with dealers enrolled in iMHZEV who know the forms, invoice order (taxes/fees before incentive), and documentation standards.
Conclusion
iMHZEV funds the purchase or lease of eligible new medium- and heavy-duty zero‑emission vehicles through a point-of-sale incentive applied by authorized sellers. Incentive amounts vary by vehicle class and technology, from $5,000 for qualifying MDPVs up to $200,000 for Class 7/8 coaches and Class 8 fuel cell trucks, with proration for shorter leases. Charging equipment and operational costs are not covered. Organizations can stack federal and provincial incentives up to 75% of MSRP and should plan purchases carefully within annual limits and program timelines. For the most current eligibility and configuration details, confirm with your authorized seller and program administrators before committing to a vehicle order.
