Canada’s government has come up with an interesting way to strike back at the Trump administration during the tariff war.
Reuters reported that the country is freezing all rebate payments for Tesla vehicles and has banned the company from future electric vehicle rebate programs, Transport Minister Chrystia Freeland announced on Tuesday.
No rebate payments will be made until each claim is individually investigated and determined to be valid, Freeland said in an emailed statement shared by her office.
Freeland also directed the transport department to revise eligibility requirements for future iZEV programs to ensure that Tesla vehicles are not eligible as long as the "illegitimate and illegal U.S. tariffs are imposed against Canada."
BREAKING: Canada just banned Tesla from their electric vehicle rebate program and has frozen $30 million in pending payments to Tesla, in retaliation against the tariffs.
— George (@BehizyTweets) March 26, 2025
Transport Minister Chrystia Freeland said this is part of her strategy to put "maximum pressure on the White… pic.twitter.com/Ky115IMoYG
This comes after President Donald Trump imposed new tariffs on Canada that will take effect in April. Canada will pay 25 percent duties on most products imported into the United States.
It appears Canada’s government believes that by targeting Tesla, they can exert pressure on Tesla owner Elon Musk, a key ally of the president and the head of the Department of Government Efficiency (DOGE) initiative.
Canada has frozen C$43 million ($30.11 million) of rebate payments for Tesla. The order to stop the payments came before Canadian Prime Minister Mark Carney announced a general election on April 28, according to the Toronto Star, which reported the news earlier.
The Star reported earlier this month that Tesla filed an extraordinary number of EV rebate claims in the final days of the program in January, with a single Tesla dealership in Quebec City claiming nearly C$20 million in public subsidies by documenting more than 4,000 electric vehicle sales over a single weekend.
Toronto stopped providing financial incentives for Tesla vehicles purchased as taxis or ride shares because of trade tensions with the U.S. earlier this month.
The Daily Beast reported back in February that Canadian political leaders were calling on the government to address Musk’s supposed political influence in the country. Some even sought to bar X, Tesla, and Starlink from the country.
Musk reportedly spent $290 million in supporting President Donald Trump’s sweeping election win, as well as funding other GOP candidates. The technocrat has also used his money as a threat to tamp down on political dissension by threatening to fund opposing candidates in primary elections, reported Politico.
“We better have a report coming up on American interference,” said Canada’s former foreign affairs minister Lloyd Axworthy, reported Global News. At a Jan. 27 panel hosted by the Canadian International Council, Axworthy, warned against the influence of billionaires like Musk and urged the country to take preliminary steps to “make sure that they don’t screw the thing up, and make sure that we aren’t denied our rightful place to make our own choices” in elections.
Emmett Macfarlane, a political scientist at the University of Waterloo, insisted that the government “should treat Trump and members of his administration like Elon Musk as akin to Russian oligarchs” and “impose meaningful costs on the U.S. for its economic aggression.”
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