Alberta announced during the unveiling of its 2024 budget on Thursday afternoon that electric vehicle drivers in the province will soon have to pay an annual tax of $200 on their cars.

The provincial government said that although the number of electric vehicles (EVs) in Alberta is currently low, electric vehicles are being purchased in steadily increasing numbers, and while electric vehicles tend to be heavier than comparable internal combustion vehicles and cause more wear on provincial roads, their owners do not pay any fuel tax.

The government added that although fuel tax revenues are not allocated for the construction and maintenance of provincial roads, there are concerns related to fairness with other vehicle drivers and long-term challenges associated with declining fuel tax revenues."

To compensate for this, the province imposes an annual tax of $200 on electric vehicles, which will come into effect on January 1, 2025.

The province also indicated that the tax rate aligns with the estimated annual fuel tax.

More details on the tax are expected to be released when legislation is introduced in the fall.

Revenue from the tax is estimated at $1 million in the 2024-2025 period, and is expected to grow with the accelerating adoption of electric vehicles, reaching $5 million in 2025-2026 and $8 million in 2027-2028.

Alberta will join neighboring Saskatchewan in this tax, as the latter imposed road usage fees on electric vehicles in October 2021.