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‘No room left on my credit card’: 1,300 stranded Canadians apply for emergency loans

Cash-strapped and stranded abroad, hundreds of Canadians are waiting for an emergency loan from the federal government because they need money to pay for hotels or book flights.

The Canadian government has paid out $ 1.8 million in loans to 525 recipients through the COVID-19 Emergency Loan Program for Canadians Abroad. It is currently processing another 800 loan applications, according to Global Affairs Canada.

The repayable loan of up to $ 5,000 is intended to cover flights back to Canada, or basic expenses, such as hotels and food, until citizens can return home. There are currently 391,451 Canadians signed up to the Registration of Canadians Abroad. 

Kimberley Bradley, 50, of Pembroke, Ont., says she needs the emergency loan to cover her hotel bill in Varadero, Cuba. She’s been forced into quarantine with hundreds of other travellers and only has enough cash to cover four more nights, she said.

“People have run out out of money. They’re waiting on emergency loans, begging the hotels to wait,” she said. “I have no room left on my credit card.”

Bradley said she has booked three different commercial flights out of Cuba in the past 10 days, each paid for on her credit card, but they’ve all been cancelled. Each time, she received credit for future travel but no refund.

Travelling on a tight budget

Bradley started the loan application process eight days ago. She received an email from Canada’s emergency response centre today that said, “Due to a high volume of requests, we will not be able to give updates on the status of individual loan applications.” The most recent communication warned the process could take a week.

In a statement released Tuesday, Global Affairs Canada said it is working “around the clock” to ensure it is “providing emergency assistance and consular services to Canadians abroad who need it.”


Bradley says she’s luckier than a lot of travellers because the Cuban government has placed foreigners in a nice all-inclusive hotel where staff are treating them well. (Westjet Vacations)

Bradley, who has an autoimmune disease that is exacerbated by the cold, arrived in Cuba in early January. She rented an apartment in a fishing village for six months, she said.

When COVID-19 concerns escalated in early March, she weighed her options. She says she didn’t have a place to quarantine in Ontario because she lives with her daughter, who is an essential service worker. Bradley also survives on a disability pension and had pre-paid six months’ rent in Cuba.

So, she decided that she would self-isolate in her private apartment in Cuba until the end of June.

That plan fell apart last Tuesday, when Cuban immigration officials decided to force all foreigners into quarantine in hotels to try to control the fast-spreading virus.

“A lot of people missed opportunities to take flights because they thought they were just going to wait things out here,” Bradley said.

Nonetheless, she doesn’t blame Cuban officials for taking steps to contain the virus, she said.

Now, she’s forced to pay $ 50 a night at the Barcelo Solymar hotel, which she said is beautiful, with kind staff, but far beyond her tight budget.


Bradley, seen here in Cuba, where she’s been living since January, was a on tight budget before the COVID-19 pandemic forced her into a Cuban hotel she couldn’t afford, she says. (Submitted by Kimberley Bradley)

There are no commercial flights in or out of Cuba, but Bradley was informed late Wednesday that the Canadian government is chartering a flight out on Sunday. She can’t afford the ticket unless she receives the loan in time, she said.

Loan application denied

Toronto resident Alexandra Acosta helped her 62-year-old father apply for a $ 1,000 emergency loan last week to go toward a plane ticket home from Lima, Peru.

Given the economic uncertainty caused by the COVID-19 pandemic and her own circumstances, Acosta couldn’t afford to loan him money herself, she said.

“I have enough money to last me for my groceries. My husband’s not working. I’m not working. You can only use your credit card so much,” she said.

Her father, Juan Acosta, just received an email from the Canadian Embassy in Lima that he was denied the loan. The rejection email didn’t specify why, but said: “This program is intended to provide assistance to Canadian citizens who plan to return to Canada, have been prevented from doing so because of COVID-19, and have no other source of funds.”

The federal government has arranged three flights to bring Canadians home from Peru this week. 

Acosta said she is devastated.

“If he was here with me, he would be … in this house, so I could make sure he is OK,” she said. “You gotta take care of your parents because they took care of you.” 


Employees of the Pariwana Hostel in Cusco, Peru, inform guests of two confirmed positive COVID-19 results on March 25. (Submitted by William Fafard)

Acosta said she searched for a commercial flight out of Peru for her father last month after the Canadian government warned travellers that they should return home while they still can. She wasn’t successful.

She said her father moved from Canada to Peru two years ago to pursue a business opportunity and care for his elderly father. Acosta concedes that Peru is her father’s primary residence these days, but she says he’s a Canadian citizen and she wants him home.

The eligibility criteria to qualify for an emergency loan from the federal government include:

  • You are eligible if you are a Canadian citizen impacted by COVID-19 who plans to return to Canada and who has no other source of funds.
  • Global Affairs will consider that you plan to return to Canada if you:
    • Had a return flight booked and your flight was cancelled or delayed.
    • Attempted to book a flight, but cannot due to the travel restrictions or exorbitant pricing.
  • You must be a Canadian citizen.
  • You must be a permanent resident travelling with an immediate family member who is a Canadian citizen, or facing a threat to life or other grievous harm.

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CRA moves to slash ‘excessive’ fees charged by disability tax credit companies

The Canada Revenue Agency is proposing to dramatically slash what it calls “excessive” fees some companies charge to help Canadians apply for the disability tax credit, nearly five years after it was told to do so.

The move, which according to the CRA could put millions of dollars back in the hands of disabled people, is being applauded by some advocates, but panned by companies that last year collected up to $ 25 million in fees.

“The government of Canada decided that measures were needed to protect Canadians living with disabilities and their supporting family members from being charged more than what is considered adequate compensation for the services rendered,” according to a CRA analysis released earlier this month.

More than a million Canadians receive the disability tax credit, which can be worth thousands of dollars and is designed to provide help for people who have mental or physical impairments that are “severe and prolonged.”

Up to 40% in contingency fees

Over the years, businesses have sprouted up to help people apply for the tax credit. They charge anywhere from 15 to 40 per cent in contingency fees and last year collected between $ 9.5 million and $ 25.4 million, according to the CRA.

The proposed restrictions will significantly reduce that take. Companies will only be permitted to charge $ 100 for an application to determine eligibility, another $ 100 to actually apply, and then $ 100 for each year the credit is retroactive.


One of the biggest disability tax credit companies in Canada is National Benefit Authority. It has advertised in Halifax. (Susan Allen/CBC)

There have long been calls for a crackdown. Legislation introduced by the Harper government in 2014 intended to tighten the rules, but it’s only now that federal officials have released draft regulations.

“I think it’s a great change,” said Eastern Passage, N.S., resident Cathy Publicover.

Publicover has several disabilities and initially sought the help of a Toronto company called National Benefit Authority to apply for the tax credit. But after being told the company would charge her 30 per cent to submit the application, she decided to do it herself. She found it easy and simple to complete.

“At that time it would have taken $ 970 from me,” Publicover said, adding it is money she uses to pay for her medication and other health-related bills.

Those who apply for the disability tax credit are required to fill out a small portion of a form with their personal information, while the remainder is completed by the patient’s doctor or nurse practitioner.


Patrick Curran, national executive director of Independent Living Canada, calls fees in the thousands of dollars “unconscionable.” (Submitted by Patrick Curran)

Companies currently charge as much as $ 4,663 to help an adult, and $ 7,383 for an eligible minor, depending on the amount of the disability tax credit and the number of retroactive years, according to the CRA.

Those kinds of fees are “unconscionable,” said Patrick Curran, the national executive director of Independent Living Canada. The organization advocates for the disabled and has 25 offices across the country that help people fill out the disability tax credit (DTC) forms for free.

“Our position has been that there should not be any charge whatsoever for the filing of an application for a DTC,” Curran said.

He welcomes the proposed changes and said he’s fine with setting the fee at $ 100 an application.


Monique Brooks operates a one-person business helping people apply for the disability tax credit. She said the process can take more than a year and she doesn’t get paid if the tax credit is not approved. (Paul Brooks)

But Monique Brooks, who owns and operates Disability Tax Credit Consultant Services in Harrowsmith, Ont., told CBC she was “horrified” when she learned about the plan to replace contingency fees with a $ 100 flat rate per application.

“Some of these businesses have employees and so therefore it’s going to cause job loss,” she said.

One of the biggest companies is National Benefit Authority. It has not replied to a request to comment on this story.

Brooks, however, is a one-person operation.

She charges 20 per cent for helping people access the disability tax credit, although she said she provides free advice in other areas where people may need help. She said the government makes people in her business sound like “we’re vultures, and it makes it sound like we’re taking advantage of the disabled.”

She said while that may be partly true of some companies, people who are denied the tax credit need help reapplying from those who know “the ins and outs of the system.”

She said 20 per cent is reasonable because “that same Canadian without my support might have a 90 per cent chance of being denied and then they would get zero.”


The Canada Revenue Agency said it is working to simplify the disability tax credit application process. (Sean Kilpatrick/Canadian Press)

She said the application process is not as easy as the government makes it sound, and she’s spent two-and-a-half years helping applicants get approval. She notes she does not get paid until the application is approved and receives nothing if it’s rejected.

The executive director of an organization that represents companies like Brooks’s calls the regulations “an unprecedented move.”

Nicola Moorhouse, with the Association of Canadians Disability Benefit Professionals, said in a news release that taxes are complicated and “dealing with CRA can be a nightmare.”

She said the direct result will be unavailability of services to disabled Canadians, near total job loss within the industry and fewer benefits for those who need them most.

“It should be obvious that the intent and effect of the proposed regulations is to wipe out the service-provider business and reduce the availability of the DTC to disabled Canadians.” Moorhouse said.

CRA ‘balancing act’

A CRA spokesperson calls the regulations “an important balancing act.” On the one hand, it wants to protect persons with disabilities, who can be some of Canada’s most vulnerable people, but it also recognizes that some may need help with their tax credit requests and that companies can play a role.

“While we recognize that reaction from various stakeholders will be varied, the CRA believes it has found the right balance,” Dany Morin said.

He added the CRA is also continuing to work to simplify and clarify the disability tax credit application process and expects to make significant progress on this front in the coming months.

Morin said once the consultation period has ended, the CRA will consider the feedback and may revise the proposal. It will then be up to the minister of national revenue to approve it.

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Trump Wants EVs Tax Credit Gone. GM, Tesla Want It Expanded.

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President Trump wants to end the federal tax credit of up to $ 7,500 on new electric vehicles and plug-in hybrids, to save (the White House says) $ 4.5 billion over the decade. This on a budget that calls for spending $ 4.7 trillion in fiscal 2020, or $ 14,000 per US resident. Nothing much may come of Trump’s proposal.

Most of the auto industry wants to see the tax credits continued. Tesla and General Motors not only want to see the tax credit remain, but they also want it expanded beyond 200,000 vehicles. By the most amazing of coincidences, Tesla and GM are also the only two companies that have run through their allocation of 200,000 $ 7,500 tax credits and are in the one-year wind-down phase that provides partial credits. There’s little question the credits have helped create the comparative handful of EV sales. Last year, EVs and plug-in hybrids were about 2 percent of the market, and traditional hybrids were another 2 percent.

The President’s budget submission is a proposal. Congress is the branch of government responsible for debating and passing a budget. It can take the President’s demands or requests as advisories. When both the House and Senate were in Republican hands 2018-2019, they routinely ignored his requests. Now the House is in Democratic hands.

Even the first-generation Nissan Leaf had a battery big enough (24 kWh) to merit a full $ 7,500 tax credit.

Trump also proposed ending the Advanced Technology Vehicles Manufacturing loan program as well as some other Department of Energy programs he said were “costly, wasteful, or duplicative.” Whether they are or not, they’re scattered across multiple states, meaning the legislators there are fond of the programs: in Illinois, Kentucky, Michigan, Missouri, New York and Ohio for Ford; in Tennessee for Nissan to build advanced batteries and assemble the Leaf EV; and in California for Tesla to develop its Fremont manufacturing plant. In his budget proposal, Trump said, “The private sector is better positioned to provide financing for the deployment of commercially viable projects.”

The tax credit works this way:

  • Hybrids such as the Toyota Prius had their shot at tax credits. That’s long gone, as are the stickers that allowed access to HOV lanes with just the driver aboard. These cars all had (have) batteries too small to qualify under the EV/PHEV program.
  • Current law provides a tax credit of up to $ 7,500 on the purchase of a battery electric vehicle or a plug-in hybrid. The vehicle has to have a rechargeable battery of at least 4-kilowatt hours (kWh), in which case the credit is $ 2,500 plus $ 417 per additional kilowatt hour. Hybrid batteries are about 1 kWh. So it breaks down as follows:

4 kWh, $ 2,500 potential tax credit
5 kWh, $ 2,917 ($ 2,500 plus $ 417)
6 kWh, $ 3,334
7 kWh, $ 3,751
8 kWh, $ 4,168
9 kWh, $ 4,585
10 kWh, $ 5,002
11 kWh, $ 5,419
12 kWh, $ 5,836
13 kWh, $ 6,253
14 kWh, $ 6,670
15 kWh, $ 7,087
16 kWh, $ 7,500

To get the tax credit, the buyer had to pay taxes and earned enough to owe $ 7,500 in federal taxes the year the car was bought (taxes owed for the entire year, not for the balance due come April 15). If you owed $ 4,500, your credit against taxes was … $ 4,500. If you didn’t pay taxes, you could lease the car, the title-holder got the credit, and the $ 7,500 was (should be) passed along as a lower lease rate.

Critics of the tax credits say they want to see companies stand on their own feet. Some of them just don’t like EVs and don’t see EV subsidies today as a hedged bet against climate change issues now and in the future. Some made a more solid point, that Tesla-buyers in the gilded areas of Silicon Valley in California, or the metro-New York area, probably didn’t need a $ 7,500 tax credit tip in favor of buying an EV.

In the US, odds are that if you’re a big business, you’ve gotten tax credits to move to a different state, to stay in your current state, to add jobs, or to install pollution-control equipment without which you get in trouble with the government. Some New Yorkers helped drive Amazon out of New York City, saying the arrival of 25,000 high-paying jobs is bad for the city (those people would drive up real estate and other living costs). Interestingly, the credits offered for the Hudson Yards business and residential complex just west of Pennsylvania Station were twice what Amazon would have gotten, $ 6 billion versus $ 3 billion.

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GM Also Hits 200,000 EV Sales, Buyer Tax Credit Drops to $3,750 April 1

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General Motors has reached 200,00 sales of electric vehicles and plug-in hybrids as of the fourth quarter of 2018, triggering an April 1 reduction of buyer tax credits from $ 7,500 to $ 3,750. Once the cap is reached, buyers get the cap-reached quarter and the next quarter with the full credit. Then (April 1, 2019, for GM), the credit drops to $ 3,750 for two quarters, to $ 1,875 for two more quarters, and then it’s gone as of April 1, 2020.

Tesla was the first automaker to bump up against the 200,000-sales cap, hitting it early in the third quarter of 2018. The Tesla tax credit dropped to $ 3,750 Jan. 1 and expires Jan. 1, 2020. To partly compensate for the drop, Tesla cut the price of all cars by $ 2,000.

The Chevrolet Bolt EV, the current mainstay of GM electrification efforts. Ironically, the Chevrolet Volt plug-in, which is being discontinued, accounted for as many sales as the Bolt EV, 15,000-16,000 each last year.

After Tesla and General Motors, it may be a year or two until the next automaker hits the cap. Based on current sales, Nissan would be the next to hit it, in late 2020 or 2020. Sales of the Nissan Leaf should pick up with the 2019 arrival of a longer range Nissan Leaf. Nissan has argued that most motorists don’t need more than 150 miles of battery range for the kinds of driving you do in an EV and that’s the range of the current Leaf with a 40-kWh battery pack. It is expected to deliver a 60-kWh Leaf this year and probably will keep the existing Leaf as a cheaper option.

Here’s our estimate of cumulative sales of EVs and plug-in hybrids combined. The two are combined for tax credit purposes. The rule is you need at least 16-kWh of battery power onboard to qualify for the maximum US tax credit:

Cumulative EV Sales Through 2018

  1. Tesla, 285,000 sales (hit cap July 2018)
  2. General Motors, 205,000 (hit cap November 2018)
  3. Nissan, 130,000
  4. Ford, 115,000
  5. Toyota, 95,000
  6. BMW Group, 85,000

Interestingly, it’s BMW (including Mini and Rolls-Royce) that has the widest range of EVs and plug-in hybrids. The Ultimate Driving Machine company knows that electric motors are the perfect power complement to the combustion engine because motors reach maximum power (torque) at zero rpm as the traffic light goes green, while combustion engines peak at 2,o00 to 4,000 rpm. BMW has also sold diesels as great performance/economy vehicles, but Dieselgate has tarred even the companies not directly affected.

Critics say plug-ins are too complex to be successful long-term. Whether or not that’s true, they’re one way to provide efficient driving with both economy and performance for the next decade. The Toyota Prius Prime was the best-selling PHEV and second best among electrified vehicles after Tesla Model 3, with about 25,000 sold. The Chevrolet Volt and Honda Clarity PHEV were vying for runner-up in PHEV sales with about 15,000-16,000 sold each.

Cadillac CT6 Plug-In: For GM, all brands count toward the 200,000 sales limit. The CT6 contributed about 225 2018 sales toward the cap.

Big automakers are at a disadvantage because the 200,000 sales cap is for all the automaker’s brands. In GM’s case, the 200,000 is spread over Chevrolet, Buick, Cadillac, and GMC. The same holds for Toyota-Lexus, Nissan-Infiniti, Ford-Lincoln, Hyundai-Kia, and VW Group (12 brands including Audi and Porsche). Or said the other way, the handful it helps are the standalone EV brands that make it through the infant mortality years. Tesla has been around 15 years. Faraday Future dates to 2014, but in the past year has laid off almost 40 percent of its employees. Fisker Automotive was founded in 2007, produced about 2,000 EVs, went bankrupt, and had its assets purchased by Wanxiang Group in 2014.

The two most recent EV startups, able to learn from the miscues of others, are Byton (crossovers and sedans) and Rivian (SUVs and pickup trucks). They, too, will get a shot at taking advantage of the 200,000-vehicle tax credits as they come to market around 2020, both companies say.

If you’re looking at taking advantage of the federal tax credit, know this: It is a tax credit of up to $ 7,500, meaning you get back up to $ 7,500 in federal taxes for the year you bought your EV or PHEV. The only electrified vehicles that don’t qualify are hybrids with small batteries and motors that propel you 1-2 miles. You need to have owed $ 7,500 or more in taxes in that year to get the credit. It can’t be taken over multiple years. It is good for either an outright purchase, a loan purchase, or most leases. Lessees don’t get the credit directly, but the leasing company should credit the amount against your lease payments. Ask to see the paperwork. The credit goes only to the original purchaser; there is no EV credit for used cars.

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Lisa Vanderpump Reveals Why She Doesn't Have a Credit Card

Lisa Vanderpump is not a fan of credit cards.

The Real Housewives of Beverly Hills star revealed in an interview with InStyle published on Friday, that she likes to know where she stands when it comes to her money.

“You’re not gonna believe it, I don’t even have a credit card. I have a debit card, and it comes out of my account,” Vanderpump, 58, shares. “Because if I had a credit card, I would never pay the bills. I just wouldn’t remember.”

“[My daughter] Pandora says, ‘With the amount of money you spend, you should have a credit card so you can get points,’” she adds. “But I like to know where I stand.”

The Vanderpump Rules leading lady, however, has always worked hard for her money, and likes to treat herself.

“My parents never lavished gifts and money on us. God, I hope they don’t read this. They were a bit stingy,” she said. “I would get nice Christmas and birthday presents, but they were frugal. So I worked every school holiday.”

Now as a mother of two, she makes sure that her children are also smart with their money.

“I’ve always kept some money and invested in property, and I encourage my kids to do the same,” she explains. “I helped Pandora [and her husband] out with the deposit, they have their own mortgage, and already they’re moving up in the property market. Same with Max. It’s very difficult now for young people to get started in a place like Los Angeles. That was something I could help them with, but they have the responsibility of their bills and their mortgage, and I think that’s an important part of growing up.”

For Vanderpump, it’s also importance to be financially independent. “Money is freedom. It gives you the power as a woman to say that you come and go when you want to,” she says. “And, you know, ‘Let me pick up this dinner bill.’”

“I have total autonomy over my own money,” she adds. “If [my husband] Ken [Todd] saw, he’d be saying, ‘What’s this? What’s that?’ But actually, I’m more conservative than he is.”

Meanwhile, ET spoke with Vanderpump last month and addressed rumors that she had left RHOBH. 

“I haven’t said anything for two months. Now, everybody’s been talking about this. I’ve just been going about my business and doing my things,” Vanderpump said, before answering the question on everyone’s minds.

Hear what she said in the video below.

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Why Some Congressmen Would Scuttle the $7,500 EV Credit

Republicans in the House of Representatives want an end to the tax credit of up to $ 7,500 on electric vehicles. Critics of the credit say it’s a giveaway that disproportionately benefits the wealthy (sort of true), because that’s who’s buying EVs relative to their numbers in the US population. Backers of the tax credit say it supports a fledgling technology in the US that could also cover long-haul trucks, electricity storage for big power plants with lots of off-peak capacity, and backup power for homes and businesses. Kill the credit and other countries will move ahead on EVs and lithium-ion battery technology.

Meanwhile, the tax credit is already sunsetting on Tesla. The company has sold 200,000 vehicles. Yesterday (Monday, Oct. 15) was the last day to order a Tesla and be guaranteed delivery by Dec. 31. That’s the last day of the pre-phase-out period where a Tesla is still eligible for the full, $ 7,500 federal tax credit.

Hyundai’s just-released Kona EV: up to 258 miles on electricity.

Why Some Pols Want the Credit Discredited

The current US law allows buyers of electric vehicles to get a tax credit against the money you pay in taxes — a way better deal than a tax deduction — up to $ 7,500. You do have to pay taxes and owe at least $ 7,500 in taxes this year to get a $ 7,500 credit this year. The credit is to offset the higher price of an EV mostly owing to the massive lithium-ion battery packs.

Liberals are up in arms because the person who introduced the bill is US Rep. John Barrasso, a Wyoming Republican who’s a friend of traditional-fuel vehicles. There was an attempt to end the tax credit in 2017, which was piggybacked onto other legislation, then scrapped. The 2018 legislative proposal by Barrasso is a standalone bill.  The summary calls it:

A bill to amend the Internal Revenue Code of 1986 to terminate the credit for new qualified plug-in electric drive motor vehicles and to provide for a Federal Highway user fee on alternative fuel vehicles.

Several sources note Wyoming is a fracking-friendly state and Congressman Barrasso is well financed by oil interests. OpenSecrets.org says Barrasso in the 2017-2018 election cycle has taken in $ 498,000 from oil and gas, 60 percent of it from political action committees. That’s more than a dollar per person of voting age in the Equality State, and the biggest bucket of contributions.

More broadly, critics of EVs and/or the tax credit say the electric vehicle industry should stand or fall on its merits, without subsidies.

It should be noted that buyers of EVs are clustered heavily in California and the West Coast, followed by about 10 Northeastern states. Basically, these are the largest of the 20 states that Hillary Clinton won in 2016. They also contain most of the states with HOV (high occupancy vehicle) lines, which allow EVs to use them as well as cars with either two- or three-plus occupants.

Jaguar i-Pace EV: credible high-end challenger to Tesla with the ability to hot-lap a racetrack.

With Tesla Heading Out, Credit Remains for Mainstream EVs

Tesla is the maker of the priciest EVs currently. A Tesla Model S sedan or Model X crossover easily passes the $ 100,000 mark. So critics are right that the Tesla tax credit benefits those making big bucks. But those Tesla credits are on the way out. From January through June, the credit drops to $ 3,500 tops, then in the following two quarters, it’s $ 1,875. That’s for actual deliveries, not for orders, and not for price paid in full for a vehicle that’s still en route.

According to InsideEVs.com, this is where automakers stand as of the beginning of September 2018:

  1. Tesla, 244,000-plus EV sales
  2. General Motors, 193,000
  3. Nissan, 125,000
  4. Ford, 110,000
  5. Toyota 89,000 (hybrids were in a different tax credit category)
  6. BMW Group, 76,000

Every automaker under an umbrella brand counts toward the 200,000 unit total. It is for EVs and for plug-in hybrids with large batteries. GM’s 200,000 includes Chevrolet, Cadillac, Buick, and GMC. A separate, smaller tax credit exists for hybrids that go just a mile or two on battery power.

Tesla was smart in managing its deliveries so it hit the cap early in July. The way the phase-down kicks in is this: Once you hit 200,000 deliveries, every vehicle delivered in that quarter gets the full credit, along with every vehicle delivered in the following quarter. So an automaker can get credits for anywhere from one quarter plus one business day, up to two quarters minus one day. GM is likely to hit 200,000 sales in this quarter (October to December), perhaps this month, so it, too, may benefit from pacing deliveries.

Other automakers are starting to deliver EVs: Kia and Hyundai; and Volkswagen and Audi. Most of those are sub-$ 50,000 vehicles.

Nissan Leaf: With state and federal tax credits, plus Nissan incentives, a $ 30K Leaf might sell for little more than $ 15K. In California.

California Wants to Boost Its State Credit

Wyoming has clean air. California has cleaner air than 25 years ago, but it’s challenged by a population of 40 million and regional basins that trap polluted air (Los Angeles). The federal government long ago gave California the right to set stricter standards to control air pollution and it allowed other states to use the California standard, which many Northeast states have done. An ongoing tug of war is testing whether the feds can take away what it granted.

California is pondering whether the state needs to raise its own subsidy from $ 2,500 to $ 4,500. That’s to not just continue but increase public demand for EVs and PHEVs. Last month, Mary Nichols, chair of the California Air Resources Board (CARB), said she was hoping Congress will increase the number of cars that qualify for the federal credit. Failing that, she told the Los Angeles Times, “We would be having to look at another way to make up for that.” The Obama administration, late in its tenure, proposed raising the EV credit from $ 7,500 to $ 10,000, but Congress didn’t act on it. A $ 10K credit would drop the price on an entry EV to as little as $ 20,000 – $ 25,000.

The current 150-mile Nissan Leaf S in California, base price $ 30,000, with federal and state credits, plus up to $ 3,500 in Nissan incentives (mid-October 2018), would go out the door as a $ 15,000 car.

Automakers, in general, want to see the US tax credit remain in place, or set to a higher limit. GM called EV credits “an important customer benefit.” Nissan said the tax credit led the company to make “significant investments” in EV technology. The Alliance of Automobile Manufacturers (GM, Toyota, BMW Group, Fiat Chrysler, Ford, Jaguar Land Rover, Mazda, Mercedes-Benz, Mitsubishi Porsche, Toyota, Volkswagen, Volvo), representing more than three-quarters of US vehicle sales, said dropping the credit will hurt the development of newer, more efficient EVs. Tesla did not have a comment and no automaker said killing the federal credit was a good idea.

Several European countries are pushing toward an EV-only future by 2050. Whether they’re serious or just bluffing the auto industry to see what they can accomplish, it’s going to spur more EV research, and if the US tax credit fades away, it may mean R&D dollars leave the US.

Now read: Tesla Hits 200,000 Sales: Countdown Starts for Lower Tax Credits, Then None2019 Jaguar I-Pace Review: Tesla-Killer EV Is 2018’s Best Car, and 2018 Nissan Leaf EV First Drive: 150 Miles, Pro Pilot Assist Highway Driving

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Soon You Won’t Get a Tax Credit for Buying a Tesla or GM EV Anymore

Tesla and General Motors are likely to hit the 200,000-vehicle sales mark for EVs and PHEVs this summer, triggering the beginning of the end of $ 7,500 tax credits. Once that happens, buyers have an additional 15 months to get at least a partial credit. Nissan and Ford are further back and won’t hit the cap until 2019 at the earliest.

Once the cap is reached, the full credit is available in the next quarter, followed by two quarters at half credit and two quarters at partial credit. At that point, Tesla and GM will be at a price disadvantage. The $ 7,500 rebate on the Chevrolet Bolt EV amounts to a 20 percent discount.

EVs and plug-in hybrids are selling at the low end of industry predictions, just over 1% market share and 200,000 sales in 2017. Industry analyst IHS Markit says they won’t reach 10% until 2025. Chart shows combined sales of EVs, PHEVs, not hybrids.

Tesla, Nissan Close to the Limit

Tesla and Nissan are likely to hit the 200,000 sales mark this year. Tesla is near 200,000 or may even be past it. (Tesla did not respond to a request for comment on which side of 200,000 it’s currently on.) Here are industry estimates of sales by the top four automakers as of March 31 (the of 2018 Q1), compiled and interpolated from sales reports by the automakers, InsideEVs.com, and Automotive News data.

Automakes (Cumulative Through March 2018)

Tesla, 193,000

General Motors, 181,000

Nissan, 120,000

Ford, 108,000

Individual Models (YTD Through May 2018)

Tesla Model 3 (EV), 18,000

Toyota Prius Prime (PHEV), 12,000

Tesla Model S (EV), 8,000

Tesla Model X (EV), 7,000

Chevrolet Bolt EV (EV), 7,000

Chevrolet Volt (PHEV), 6,000

Nissan Leaf (EV), 5,000

Honda Clarity (PHEV), 5000

Ford Fusion Energi (PHEV), 4,000

BMW i3 (EV + REx (range-extender gas engine), 3,000

Total sales in the US for the first five months of 2018 were about 100,000 units among the 45 EVs and plug-in hybrids on the market.

Tesla Model 3s filling up in Napa Valley.

What the Tax Credit Means, How Long It Lasts

Here is the Internal Revenue Service’s explanation for battery-electric vehicles (BEVs or EVs) and plug-in hybrid electric vehicles (PHEVs), and our English-to-English translation.

The qualified plug-in electric drive motor vehicle credit phases out for a manufacturer’s vehicles over the one-year period beginning with the second calendar quarter after the calendar quarter in which at least 200,000 qualifying vehicles manufactured by that manufacturer have been sold for use in the United States (determined on a cumulative basis for sales after December 31, 2009) (“phase-out period”).

Qualifying vehicles manufactured by that manufacturer are eligible for 50 percent of the credit if acquired in the first two quarters of the phase-out period and 25 percent of the credit if acquired in the third or fourth quarter of the phase-out period. Vehicles manufactured by that manufacturer are not eligible for a credit if acquired after the phase-out period.

Each automaker can sell 200,000 vehicles after Jan. 1, 2010 that qualify for the fullest tax credit. An automaker is the parent company; for instance, General Motors gets 200,000 vehicles total, not 200K each for Chevrolet, Buick, Cadillac, and GMC. Any EVs sold before 2010 don’t count toward the total.

We’ll use the third quarter of 2018, July to September, for the example of when at automaker hits 200K sales. That will be when Tesla becomes the first automaker to sell 200,000 EVs sometime early in July (if it didn’t get there in late June).

1. 2018 Q3. Tesla sells its 200,000th EV. This triggers the countdown timer. But first, every vehicle sold in this quarter gets the full tax credit, up to $ 7,500. So it was to the automaker’s advantage to hit 200,000 early in the third quarter, not late in the second quarter.

2. 2018 Q4. Every vehicle sold this quarter also gets the full tax credit. Total elapsed time that additional vehicles get a tax credit: nine months (plus part of the previous quarter, anywhere from one day to 89 days).

3. 2019 Q1 and Q2. Every vehicle sold these two quarters gets half the maximum credit, or up to $ 3,750. Total elapsed time additional vehicles get a tax credit: nine months.

4. 2019 Q3 and Q4. Every vehicle sold these two quarters gets one-quarter of the maximum credit, or up to $ 1,875. Total elapsed time additional vehicles get a tax credit: 15 months.

5. January 2020. No more tax credits for this automaker’s buyers.

Nissan and the Leaf EV are will be able to offer credits long after the Chevrolet Bolt EV caps out.

Common Questions

Here are some of the questions potential buyers may have. Basically, this is a credit (or refund) up to the amount you paid in the tax year you bought the car. If you don’t pay taxes, you’d don’t get the credit. If you lease, it should (should) be figured into the value of the new car, because the dealer or bank gets the credit. EVs and plug-ins get a $ 7,500 credit, and some plug-ins with small batteries get smaller credits.

Q. Is this a rebate?

A. No, it’s not a rebate or tax deduction, but a tax credit, which is more valuable. You get back, dollar for dollar, the amount of the credit. If you deducted $ 7,500, you’d only get somewhere between $ 750 and $ 2,970 back, depending on your tax bracket. In the most-common 15 percent bracket, the savings would be $ 1,125.

Q. My taxes will only be about $ 5,000 this year. Do I get $ 7,500 back? Can I get $ 5,000 this year and $ 2,500 next year?

A. Your rebate maxes out at the taxes you owe the year you take delivery of the vehicle. You’ll get $ 5,000 back.

Q. I bought an almost-new dealer demo. Do I get the credit?

A. The first person or company to title the car gets the credit. If it’s a dealer demo or an executive car (sales rep’s car), it’s been titled. Dicker with the dealer. Effectively the dealer’s cost was $ 7,500 less than otherwise.

Q. I’m leasing. Do I get the credit?

A. The automaker or leasing company gets the money. They should factor that in when calculating the lease. Ask to see the paperwork where they do the calculations.

Q. If I qualify for the credit, do I always get a $ 7,500 credit?

A. The credit depends on the size of the battery. All EVs qualify for the $ 7,500 credit. PHEVs with big batteries qualify as well. That includes the BMW i3 with range extender, the Chevrolet Volt, and the Honda Clarity. Most PHEVs qualify for about $ 4,000. The full list is at fueleconomy.com.

Q. Does the credit amount depend on the on the fuel efficiency of the vehicle?

A. Only on the size of the battery.

Q. Do “regular” hybrids such as the Toyota Prius, Chrysler Pacifica Hybrid, or Honda Insight qualify?

A. Hybrids had their own plan in the previous decade; it expired at the end of 2010. The current pot of money is for vehicles that can be recharged externally and have batteries with capacity of 4 kWh or more, both of which exclude hybrids.

Q. Can I buy an EV, take the credit, and resell the car?

A. No, not legally at least. The feds would have to catch you, but you’d leave a pretty clear paper trail.

Q. If I sign the contract at the end of the quarter, but the car isn’t delivered until the first day of the next quarter, when the quarter where the credit is halved, how much tax credit do I get?

A. You get the credit in effect when you take delivery.

Q. Does a fuel cell vehicle qualify?

A. No.

Q. Will the plan be extended?

A. Probably not. The tax credit plan has less traction with the current (Trump) administration than with the previous (Obama) administration. If the Congress tried to limit the plan to US-flagged automakers building vehicles in the US — Tesla, the Chevrolet Bolt EV, and the Chevrolet Volt would qualify — there would be screaming from, say, Indiana’s legislators, where the Honda Insight is made by American workers, and unhappiness at Ford since the Ford Fusion Energi is made in Hermosillo, Mexico. The plan might be resurrected if there was a big energy shortage and high fuel prices (more than $ 4 a gallon), but currently the US has plenty of oil drilled or fracked in the US. US energy policy is currently about finding more oil than reducing consumption of what we’ve got.

The purpose of the tax credits was to get Americans interested in EVs and PHEVs and share costs (read: using the money of other taxpaying individuals and corporations). The credits for hybrids are now eight years in the rearview mirror and the price delta versus a similar gasoline car is around $ 1,000-$ 2,000. At this point it’s unlikely the plan will be ended before all the automakers reach 200,000 EV/PHEV sales.

Q. As Tesla’s and GM’s credits give out, does this give competitors an unfair advantage?

A. It’s a future advantage; whether it’s unfair is less clear. Everybody gets to sell 200,000 cars that get tax credits. The highly regarded Jaguar I-PACE EV will have the credit available long after Tesla’s runs out circa 2020. Look to see Tesla and Chevy mutter about the unfairness of that scenario. The other unfairness some see is whether expensive cars (such as Tesla Model S) deserved the tax credit at all. Conversely, Tesla could argue the credit benefits cheap cars more, since $ 7,500 off a $ 35,000 Bolt is more of a inducement than on a $ 100K Model S or X. That will keep auto industry lobbyists gainfully employed well into the next decade.

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'I am absolutely furious,' says mother trying to renew disability tax credit

More Canadians are speaking out about difficulty dealing with the Canada Revenue Agency as they apply for the disability tax credit.

“I am absolutely furious,” said Bonnie Bosak about her attempts to renew the disability tax credit for her 16-year-old son.

Bosak, who lives in Niagara, Ont., said she first applied for her son after he was diagnosed with ADHD when he was six. He was subsequently also diagnosed with a severe learning disability.

“He basically needs help with anything related to reading, writing, deciphering. So even though he is in high school, he is on an IEP which is a specialized learning program,” she said, adding his reading level is that of a Grade 2 or 3 student.

“He’s looking for a part-time job and he’s hoping to get on as a part-time baker at Tim Hortons, but he can’t even fill out a job application for himself,” she said.

Bonnie Bosak said she first applied for the tax credit for her son when he was six, and had no problem with the renewal five years after that. (CBC)

Bosak had no problem when she was required to renew the application five years later.

However, last fall when she applied to the CRA for another renewal, the agency requested additional information, which Bosak provided. She has since been told her son is no longer eligible, and no one will tell her why.

“Nobody will give me a clear reason so that I can understand why he is no longer classified as disabled,” she said. “They’ve just randomly decided he has been cured of everything that ails him and so we’re no longer entitled.”

32 surgeries and still rejected

Yellowknife resident Ben Brown has also not been given a reason why he was rejected, other than that his health issue does not affect 90 per cent of his life. He disputes that, saying it impacts every aspect of his life and always has.

Ben Brown’s disability tax credit application has been rejected. He has undergone 32 operations for a congenital hearing defect that has worsened over the years.(Submitted by Ben Brown)

The 36-year-old was born with a congenital hearing defect that has worsened as he has aged. He says he’s unable to wear hearing aids because of the damage to his ears. He’s undergone 32 surgeries and says he struggles with his disability every day.

“When I asked why I didn’t qualify, I was told, “If we told you what was wrong with your application, you would just fix it and reapply,”‘ Brown said.

He has 90 days to appeal the ruling.

CRA lost application

Haley Thomas of Bridgewater, N.S., has a different complaint. The 22-year-old said the CRA lost her application.

She said she originally applied in March 2017 on the advice of her doctor. She is severely overweight and needs help with daily care. She has been placed on a seven-year wait-list for gastric bypass surgery and hoped the disability tax credit could help with additional weight loss supports. However, CRA said it had no record of her application, so she reapplied in December.

Bridgewater resident Haley Thomas says the Canada Revenue Agency lost her disability tax credit application.(Submitted by Haley Thomas)

She said she was told all the documents had been received and were being reviewed, with a decision expected March 20. On that date, she was told the decision had been delayed until March 29.

“Then, within eight hours, I received a phone call from a representative stating that all of my personal information has been lost and that they have no record of me in their system. So my social insurance number, banking information, personal health records, photocopied prescriptions, personal letters about my health problems, everything was gone,” she said.

She said she is so stressed by the situation that she is losing sleep, wondering and worrying where her information has gone. She has contacted her Member of Parliament for help and is waiting to hear back.

Effects of impairment determine eligibility

In an email to the CBC, the CRA said to be eligible for the disability tax credit, a person must have a severe and prolonged impairment in physical or mental functions as defined by the Income Tax Act and certified by a medical practitioner.

Spokesperson Etienne Biram said eligibility is not based on the diagnosis, but “rather on the effects of the impairment on the basic activities of daily living as defined under the act.”

Biram said there have been no changes made to the eligibility criteria and the CRA does not have a target rate for approvals or denials of the credit.

He said each application is reviewed on a case-by-case basis and some people who applied were approved for two to 10 years, but must submit a new application when previous approval has expired.

There are the equivalent of 108 full-time employees who are processing applications for the disability tax credit, Biram said, and if applicants do not agree with the CRA’s ruling, they can provide additional medical information and ask for a review or formally object.

He pointed out the agency has taken steps to make the credit available to all eligible Canadians, including increasing outreach activities.

Biram said the CRA has also reinstated the disability advisory committee to ensure that tax benefits for disabled people are administered fairly and transparently.​

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The Restored $7,500 Tax Credit Helps the US, Not Just EV Buyers

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The $ 7,500 tax credit for buyers of electric vehicles is more than an expensive handout to rich Tesla buyers. It benefits mainstream EV buyers by making the cost of an EV closer to a comparable combustion engine car. Just as important, the tax credit incentivizes automakers and battery researchers in the US to keep working on newer, better, and cheaper electric vehicles.

The US is a comparative laggard in adopting EVs. Other countries have bigger, more polluted cities and desperately need zero-emissions cars in urban areas. In the US, a vocal segment of the population has doubts about climate change and global warming, as do their representatives in Congress. So there was real doubt the tax credit would survive 2017.

Where the Tax Credit Stands

To spur the sale of hybrid cars and EVs, the Congress in 2005 passed legislation providing tax credits of up to $ 3,400 for hybrids, scaling down after 60,000 were sold per automaker. In 2010, the Congress authorized tax credits of up to $ 7,500 for EVs and plug-in-hybrid electric vehicles (PHEVs). Once an automaker reaches 200,000 sales, the credits face out this way: They continue through the end of the quarter where sales reach 200,000, plus two additional quarters. For the next two quarters after that, they’re reduced to 50 percent, then two quarters at 25 percent, and then they’re gone.

The rebate in on federal taxes you’ve paid (either on April 15 or through payroll withholding), which has more value than getting a rebate check.

Credit Gone. Then Back, In a Week.

In November, there were persistent reports the Republican-controlled Congress would eliminate the tax cut in mid- to late-fall. It was indeed taken out of the budget. Then 22 US mayors said fewer EVs would reduce air quality in their cities. The auto industry complained. California said it couldn’t meet its own air pollution rules. Prospective buyers complained. The credit then reappeared Monday, a week before Christmas, and appears to be back for good.

Tesla is closest to hitting the 200,000 soft cap, with more than 127,000 Model S and Model X EVs, plus a relative handful of Model 3s sold, according to IHS Markit. GM and Nissan are also past 100,000.

States also have rebates or tax credits that can take total savings above $ 10,000. And some states, notably California, grant single-occupant access to HOV lines if they’re driving an EV.

Why the US Needs the Credit

Some Americans are gung ho on alternative energy: solar roof panels, wind turbines, EVs, and PHEVs. US-based automakers are developing alternative energy vehicles. But they don’t have the groundswell of public and government support that pushes them to double-down on R&D. In comparison, 42 percent of Norway’s November sales were EVs. In Norway, EVs are exempt from the 25 percent value-added tax (VAT) on new vehicles and from some tolls.

Dozens of Chinese automakers are developing electric vehicles, especially for use in their dirtiest megacities. Of the 40-plus world megacities with populations greater than 10 million, 15 are in the PRC. Volkswagen is diverting billions of euros from combustion engine technology (gas, diesels) to electric vehicles. US automakers don’t have quite the impetus to roll on alternative energy without some home-turf stimulation. One exception may be Buick, which sells five times as many cars in China as in the US.

Consider the Chevrolet Bolt EV: You can buy the base model Bolt LT for $ 38,000. It’s a subcompact hatchback that’s 164 inches long. Its combustion-engine equivalent is the Chevrolet Sonic hatchback and that goes for $ 20,000, decently equipped — a huge price difference. In California, the Bolt qualifies for a $ 7,500 US tax credit and a $ 2,500 state rebate, making the price delta $ 8,000, not $ 18,000. Plus, you can drive in HOV lanes.

The price of lithium-ion batteries is decreasing each year, but it’s not on the Moore’s Law track, where price/performance effectively doubles every year and a half. (Even Moore’s Law isn’t quite on the Moore’s Law track any more.)

Every automaker who sells EVs and PHEVs in the US benefits from the continued EV tax credit. If the credit goes away, US automakers may decide to export their EV R&D people to Europe or Asia to be closer to the action. The same might hold for all the Asian and European companies who have EV research projects going on in the US. Ditto for companies researching battery chemistry.

President Obama had proposed raising the federal tax credit to $ 10,000. Today, it’s worth thinking about raising the ceiling on EV credits from 200,000 to 250,000, or maybe even 400,000. It’s a reasonable investment in a better USA. Unless you believe climate change and pollution are fake news.

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CRA to review disability tax credit applications after backlash from diabetics

After months of criticism and accusations it lied to disability advocates, the Canada Revenue Agency is reverting to a previous interpretation of a tax credit used by diabetics and will review applications denied since May 2017.

Since the spring, people with Type 1 diabetes have complained that they have been turned down for the disability tax credit — even if they had been approved in previous years.

To qualify for the credit, the CRA requires adults with Type 1 diabetes to spend at least 14 hours a week on activities, specified by the agency, related to administering insulin.

A patient’s physician must confirm those hours to the CRA.

Diabetes Canada and the Juvenile Diabetes Research Foundation obtained an internal CRA memo, dated May 2, 2017, that says: “Unless there are exceptional circumstances, adults with diabetes can generally manage their daily insulin therapy without taking 14 hours per week.”

In a briefing with reporters Friday morning, officials said the CRA will return to using the pre-May 2017 clarification letter for disability tax applications, but reiterated that “no change has been made to the eligibility criteria.”

It will also proactively review denied applications where the CRA relied on that revised clarification letter to determine determine eligibility. 

The CRA says individuals do not need to submit new or additional information unless they are contacted by the agency.

In the meantime, a new disability committee will come up with recommendations going forward.

Advisory committee will advise CRA

Kimberley Hanson of Diabetes Canada said her group started asking questions and the CRA denied there were any substantial changes.

“I consider that the CRA lied to us in not admitting they sent this email May 2nd and pretending that they were shocked that there had been a change and that it was impacting so many people,” she said.

National Revenue Minister Diane Lebouthillier has faced questions recently in the House of Commons about the increase in denied applications. At the time, she said there has been no change in the criteria used to assess people with Type 1 diabetes

The opposition asked the minister about the advocacy groups’ memo in question period earlier this week and accused her of misleading the House when she said nothing has changed.

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Canada Revenue Minister Diane Lebouthillier has said in the House of Commons that the criteria have not changed for people with type 1 diabetes to get the disability tax credit. (Chris Wattie/Reuters)

In response, Lebouthillier reiterated her argument that the criteria haven’t changed and that, in fact, approvals for the disability tax credit have increased 20 per cent between 2014 and 2016.

However, those numbers do not take into account the changes since May 2, 2017. Diabetes Canada says in 2017 so far, denials of the disability tax credit for the life-sustaining therapy category under which Type 1 diabetics fall, has spiked 70 per cent.

The government also fleshed out more details about its plans to set up a disability advisory committee. The panel will consult with stakeholders and advise the department on policies like the disability tax credit,

The committee, co-chaired by CRA assistant commissioner Frank Vermaeten and Dr. Karen Cohen, chief executive of the Canadian Psychological Association, will make recommendations, but it will be up to the minister and her team to decide to implement them or not.

It will meet three times and year and will publish routine public reports, said officials.

The other 12 voluntary members include:

  • Sherri Torjman, former vice-president, Caledon Institute of Social Policy, from Ontario.
  • Laurier Beachell, Baker Law, from Manitoba.
  • Gary Birch, Neil Squire Foundation, from British Columbia.
  • Dr. Jeff Blackmer, Canadian Medical Association, from Ontario.
  • Lembi Buchanan, Coalition for Disability Tax Credit Reform, from British Columbia.
  • Michael Edgson, RBC Financial, from British Columbia.
  • Roberta Heale, Nurses Practitioner Association of Canada, from Ontario.
  • James Hicks, Council of Canadians with Disabilities, from Manitoba.
  • Emily Johnson, Diabetes Canada, from Manitoba.
  • Wendall Nicholas, Wabanaki Council on Disability, from New Brunswick.
  • Véronique Vézina, COPHAN, from Quebec.
  • Karen Wiwchar, H&R Block Canada, from Alberta.

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