The smallest Honda Canada Inc. car now fits in the federal government feebate scheme for the 2008 model year, a development that re-energizes the debate over Ottawa's green auto program.
The manual transmission version of Honda's subcompact Fit has been modified to use one-10th of a litre less of gasoline per 100 kilometres than the 2007 model. That makes it the second gasoline-powered subcompact eligible for a $1,000 rebate under the federal program.
The thresholds for rebates in 2008 will be the same as those set in the 2007 model year, which was first introduced in the controversial ecoAUTO Rebate program in the March federal budget and so angered the industry that all auto makers but one urged the government to scrap the program.
For the Canadian units of the Detroit Three and the Canadian Auto Workers union, which also blasted the program, there could be renewed fury because another car assembled offshore qualifies for taxpayer assistance.
Cars that consume 6.5 litres to go 100 kilometres, light trucks that use 8.3 litres of gas and vehicles consuming 13 litres of E-85 ethanol will be eligible for rebates, Transport Minister Lawrence Cannon said in a letter to the Canadian Vehicle Manufacturers Association and the Association of International Automobile Manufacturers of Canada.
The feebate system rewards buyers of hybrids and other fuel-efficient or alternative-fuel vehicles and puts a penalty on gas guzzlers.
Vehicle companies told Ottawa that the program was messing up the market and favoured Toyota Canada Inc. because the highest-selling vehicle eligible for a rebate is the subcompact Toyota Yaris, which travels 100 kilometres on 6.4 litres of gas.
Competing subcompact cars that were just above the 6.5-litre limit did not qualify.
Honda Canada, whose 2007 model year Fit used 6.6 litres to travel 100 kilometres, was closest to the line. So Honda began offering $1,000 rebates of it own to keep the car competitive with the Yaris.
Auto makers also criticized the government for taking several months to notify them of the fuel consumption guidelines for 2008 models.
Dealers and others have also taken Ottawa to task for taking almost six months to start accepting applications for rebates for 2007 model year vehicles. The application for rebates was posted on Transport Canada's website on Oct. 1, although rebates are available to any Canadians who bought qualifying vehicles after the budget was introduced on March 19.
Auto makers wouldn't identify vehicles, but an examination of fuel consumption figures on some of their websites shows that some vehicles that did not qualify for rebates in the 2007 model year are eligible in 2008.
That examination reveals that rebates for some vehicles increase, there are some new vehicles for 2008 that qualify and the fees levied on several gas guzzlers will fall because they have new, more efficient engines or because auto makers have slimmed them down.
Chrysler Canada Inc., for example, has told its dealers that removing the roof rack and adjusting the axle ratio has improved the fuel consumption of the V6 four-by-four version Jeep Commander sport utility vehicle so that it's no longer subject to a $1,000 gas-guzzler levy.
The Dodge Durango SUV has a new 4.7-litre V8 engine that reduces its fuel consumption and cuts the penalty to $1,000 from $2,000.
The Saturn Vue hybrid from General Motors of Canada Ltd. should now qualify for a $2,000 rebate, compared with $1,500 in 2007.
The fuel economy rating for the new Rogue SUV from Nissan Canada Inc. will sit at 8.2 litres, which means it will qualify for a $1,000 rebate.
Nissan appears to have tweaked the six-cylinder version of its Pathfinder SUV because its fuel consumption has been reduced to 12.94 litres from 13.1 litres, so it's no longer subject to a $1,000 levy.
© The Globe and Mail
