Paying $2 a litre at the gas pump? Here's how Canadians can decide if switching to an EV is worth it right now

For many Canadian households, that’s more than an inconvenience — it’s a budget shock.

And it’s prompting renewed interest in electric vehicles. Searches for EV models on the Rates.ca insurance platform climbed 40% in March 2026 compared to the same period last year (3). EV sales on the used-car platform Clutch have spiked 112% since early January due to ongoing gas hikes (4). Canadians are now rethinking their numbers and reconsidering their options in a volatile economic climate.

Why gas prices keep rising

The spike at the pump is tied directly to the war in Iran.

The Middle East produces about 31% of the world’s total oil, led by Saudi Arabia and Iran (5). About one-fifth of the world’s oil and liquefied natural gas (LNG) moves through the Strait of Hormuz (6) — and Iran has effectively closed the passageway to commercial shipping since hostilities escalated, thereby squeezing supply and driving up prices.

Israel bombed Iran’s South Pars natural gas field on March 18 (7) and struck again on April 6, targeting petrochemical facilities within the complex (8). According to Reuters, Iran retaliated by bombing energy hubs and LNG refineries across the Gulf Arab states (9).

QatarEnergy’s chief executive officer, Saad al-Kaabi, told the news outlet that Iranian attacks have destroyed 17% of Qatar’s LNG export capacity and could set the region back 10 to 20 years.

The longer-term damage could be significant, however. “A week ago or certainly two weeks ago, I would have said: If the war stopped that day, the long-term implications would be pretty small,” Christopher Knittel, an energy economist at the Massachusetts Institute of Technology, told The Associated Press (10). “But what we’re seeing is infrastructure actually being destroyed, which means the ramifications of this war are going to be long-lived.”

For Canadian drivers, that means elevated prices at the pump could persist — not just for weeks, but for years potentially.

The EV incentive in Canada

For a long time, the federal government’s Incentives for Zero-Emission Vehicles (iZEV) program helped offset the higher upfront cost of going electric — offering up to $5,000 off the purchase or lease of qualifying vehicles. The program was paused in January 2025 after its funding was fully committed, and EV sales fell sharply in the months that followed (12).

But federal EV incentives are back. The new Electric Vehicle Affordability Program (EVAP) launched February 16, 2026, offering up to $5,000 for battery-electric vehicles (BEVs) and fuel cell vehicles, and up to $2,500 for plug-in hybrid vehicles (PHEVs) — for models with a final transaction value of $50,000 or less. Notably, Canadian-made EVs have no cap on their purchase price to qualify for rebates (13). The program received $2.275 billion in funding over five years.

Some provinces also have their own incentive programs, though availability varies widely. Québec offers up to $2,000 in 2026 through its Roulez Vert program (winding down through December 2026). Manitoba’s provincial rebate program ran until March 31, 2026. The Yukon, Northwest Territories and Prince Edward Island continue to offer rebates and incentives. British Columbia’s passenger-vehicle rebate program ended in November 2025. Ontario and Alberta currently have no provincial EV rebate for individual buyers in 2026 (14).

How much money could you save driving an EV?

So, how much financial sense does it make to switch to an EV right now?

The upfront price is still a hurdle. The average new EV in Canada costs between $50,000 and $70,000, while entry-level models start around $35,000 (15). The average new vehicle (of any type) was priced at about $63,665 as of late 2025 (16). Used EVs average around $45,841 — compared to $36,816 for all used vehicles (17).

The EVAP rebate helps close that gap for eligible buyers, and cheaper models are on the way. Additionally, a Canada-China trade deal announced in January 2026 is expected to allow up to 49,000 Chinese-made EVs — some potentially priced in the high-$30,000 range — into the country (17).

Over the long term, owning an EV tends to cost less to operate. Clean Energy Canada estimates that the average EV owner saves roughly $15,000 over eight years compared to a gas-powered vehicle — or about $1,875 annually (18).

To put that in concrete terms, consider a popular compact SUV with a 60-litre tank. Priced at $1.80 a litre, a full tank costs about $108 and can take you roughly 600 kilometres. With an EV, charging 60 kWh at the national average residential rate of about 17 cents per kWh costs roughly $10 and can take you approximately 350 to 400 kilometres (19).

Based on the NRCan Vehicle Survey, the average Canadian drives about 15,200 kilometres each year (20). At that mileage, a gas-powered driver filling up roughly every 600 km would need about 25 fill-ups annually — adding up to around $2,700 in fuel. An EV driver charging at home would spend roughly $650 on electricity for the same distance. Over five years, that’s a difference of nearly $10,250.

Of course, real savings depend on where you live. Québec drivers benefit from some of the cheapest electricity in North America — just 7.8 cents per kWh — making EVs a particularly strong financial case (20). At the other end, Alberta’s average residential electricity rate is about 25.8 cents per kWh, which reduces — but doesn’t eliminate — the fuel-cost advantage. And B.C. drivers, who are already paying among the highest gas prices in the country, may find an EV’s potential savings a sweet deal right now.