Electric Vehicles and Insurance Premiums: What the 2025 Girard Budget Proposes

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Vue de devant l'assemblée nationale du Québec

The 2025–2026 Québec budget proposes measures to ensure the long-term financing of transportation infrastructure and services for electric vehicle (EV) owners in Québec. As the transition to the electrification of transportation gathers pace, some of the tax measures announced are designed to help finance public services. To achieve this, new fees are suggested, and these concern many environmentally conscious motorists.

In concrete terms, how might the anticipated measures affect electric vehicle owners? Here’s what you need to know. 

 

Why impose these measures? 

Due to the electrification of transportation, the Québec government anticipates that revenues from the fuel tax, which is used to pay for road maintenance and public transit, will decrease. This means a shortfall for the government. However, the number of green vehicles on our roads is growing. According to the Ministère des Finances du Québec, nearly one-third of new vehicles registered in Québec in the third quarter of 2024 were electric or plug-in hybrids. This shift, however beneficial it may be to the environment, calls for inevitable long-term adjustments to diversify funding sources and ensure a fair and equitable contribution from all road users. 

 

$125 increase in the electric vehicle registration fee 

The 2025–2026 Québec budget proposes to impose a $125 increase in the annual registration fee for electric vehicle owners, starting January 1, 2027, to make funding for road maintenance and transportation services sustainable. For drivers of plug-in hybrid vehicles, the Québec government proposes a $62.50 increase in the annual registration fee. 

 

The end of certain freebies 

In addition to this new annual contribution, the Québec government announced its intention not to extend, as of April 1, 2027, certain privileges granted to owners of road vehicles with green licence plates. This includes free access to the Société des traversiers du Québec ferries and the province’s toll bridges. 

These incentives, introduced on January 1, 2016, were intended to be “temporary” to encourage the electrification of Québec’s vehicle fleet. According to the Ministère des Finances du Québec, the rapid growth in the number of electric and plug-in hybrid vehicles on Québec roads shows that these incentives are no longer necessary.

 

An increase of almost 1% in the tax on insurance premiums 

The 2025–2026 Québec budget also proposes an increase of almost 1% in the rate of tax on insurance premiums, which will rise from 9% to 9.975% to harmonize with the QST. A bill recently tabled by the Minister of Finance recommends that this increase take effect on January 1, 2027, and apply to car (regardless of the type of vehicle) and home insurance premiums, among others. For example, the upcoming budget states that a household with taxable insurance premiums of $4,000 will have to pay an extra $39 a year because of this increase. 

 

1% registration fee on all “luxury” vehicles over $62,500

Since 1998, gasoline-powered vehicles seven years old or less with a value greater than $40,000 have been subject to an additional 1% registration fee, applied only on the portion exceeding this amount. Starting in 2027, the Québec government is calling for the threshold to be raised to $62,500, to better reflect the reality of today’s automotive market. In practical terms, this means that the owner of a vehicle worth $70,000 will pay an additional $75 instead of $300. 

However, the Québec government is proposing to end the exemption for owners of EVs and plug-in hybrid vehicles from this additional registration fee on “luxury” vehicles valued at less than $75,000. As a result, the new threshold will apply uniformly to all vehicle owners, regardless of engine type. In short, some owners of high-value EVs or plug-in hybrids will be deprived of the exemption they previously enjoyed. 

 

Return of Roulez vert program rebates

Good news for new owners of electric and plug-in hybrid vehicles: Roulez vert program rebates have been back since April 1, 2025. For example, buyers of new EVs registered after April 1, 2025, can take advantage of a $4,000 purchase rebate and $600 in financial assistance to purchase and install a home charging station. However, this assistance will be cut in half in January 2026, before disappearing in 2027. So, if you’re thinking about buying a new electric car, act quickly to register it before December 31, 2026, and benefit from these subsidies! 

 

The shortage of charging stations: an issue that weighs in the balance 

Those who already drive electric know that access to a public charging station can sometimes be a headache, especially in rural areas. Wait times are getting longer, infrastructure isn’t always keeping up with demand, and investment in the network isn’t yet keeping pace with consumer enthusiasm. 

Could these accessibility challenges, combined with the measures announced in the 2025–2026 Québec budget, make some motorists reluctant to buy an EV? It’s hard to say, but there’s every reason to believe that the installation of new rapid charging stations throughout Québec over the next few years will enable the government to achieve its transportation electrification objectives.

 

Is it still worthwhile to drive in an electric vehicle?

The short answer is yes. Despite the new measures announced, owning an electric vehicle is generally more economical in the long term.

  • Despite the proposed new annual contribution of $125, registration fees will remain lower than those for gasoline-powered vehicles.
  • You save substantially on the cost of fuel, especially if you charge at home.
  • Maintenance costs are usually lower since an EV has fewer mechanical parts.
  • Some insurers—such as Promutuel Insurance—even offer a discount on car insurance premiums for drivers of 100% electric vehicles. 

Last but not least, let’s not forget the positive environmental benefits: driving electric means actively contributing to reducing greenhouse gas emissions.

 

We’re THERE to help you save!*

At Promutuel Insurance, we understand that every dollar counts, especially when it comes to responsible transportation. That’s why we offer several ways to reduce your car insurance premium, even in today’s context: 

  • 100% electric vehicle discount: Insure your 100% electric car with us and get 15% off your car insurance premium!
  • Multiple vehicle discount: You can pay up to 10% less by insuring all your vehicles with us.
  • Combined insurance discount: You can save up to 10% on your premiums by combining your home and car insurance.
  • Claim-free discount: We’ll give you up to 20% off if you don’t have any recent claims!
  • Appi program: Our telematics app rewards you for your good driving. It pays to drive safely!
  • Insurance at the right price: We adjust your coverage to your real needs, no more, no less.

 

And of course, our dedicated team is there to answer your questions, guide you in your choices, and help you find the coverage that’s right for you. To learn more about our car insurance offers, visit our website, request a quick online quote, or contact one of our damage insurance representatives.

*Some restrictions apply. Discounts are subject to eligibility requirements and may change without notice.