June 4, 2008

Protecting and preserving our environment is a priority for Canadians and this Government.  Canada's new National Vehicle Scrappage Program will create incentives for Canadians to trade in their old, higher-polluting vehicles and promote environmentally friendly transportation choices. By replacing older, higher-polluting vehicles with newer, cleaner alternatives means cleaner air and a healthier environment for Canadians.

Older Vehicles and Air Pollution

Of the 18 million personal vehicles in use in Canada, an estimated five million are 1995 or older models. These older vehicles were not manufactured according to today's more stringent emissions standards, and produce 19 times more smog forming air pollution than newer vehicles. Although they make up less than one-third of vehicles on the road, older cars generate as much as two-thirds of the smog-forming pollutants caused by personal vehicle use. 

The Government of Canada is committed to cleaning up the air Canadians breathe and that's why we are launching a new national vehicle scrappage program with $92 million in funding that offers Canadians rewards for voluntarily retiring their old, high-polluting vehicles. In addition to reducing air pollution, the program will reduce greenhouse gas emissions by promoting environmentally-friendly transportation alternatives. It will also ensure that vehicles are recycled responsibly, thereby further preventing the release of harmful substances into the environment.

The new national program will be delivered by the Clean Air Foundation, who will develop partnerships and a local delivery network to offer a range of new rewards that will be available in all provinces beginning in January 2009. In the meantime, the Government of Canada will provide substantial funding to existing local vehicle scrappage programs for expanded program delivery and incentives. These local organizations will have an opportunity to become part of the Clean Air Foundation's national network of partners who will help deliver the national program in 2009.

Building on Success

The first Canadian vehicle scrappage program aimed at retiring old, "live" (licensed, insured, and in running condition) vehicles was the Scrap-It program, launched in lower mainland British Columbia in 1996. Since then, other initiatives run by not-for-profit organizations have been introduced across Canada.

The Government of Canada will provide $3.4 million to fund the not-for-profit organizations for delivery of local scrappage initiatives until December 31, 2008.

These local scrappage initiatives include:

• BC Scrap-It program (Vancouver, British Columbia)
• Cash for Klunkers (Kelowna, British Columbia)
• Car Heaven Alberta (Calgary, Edmonton, Lethbridge, Alberta)
• Bye Bye Beaters (Winnipeg, Brandon, Manitoba
• Faites de l'air!, Québec (Quebec areas served by public transit)
• New Brunswick Vehicle Scrappage (Fredericton, Moncton, Saint John, New Brunswick)
• Nova Scotia Steer Clean (Halifax, Nova Scotia)

The Clean Air Foundation, which has proven its ability to successfully manage a national scrappage program, will deliver the new program with a network of national and local partners, including not-for-profit organizations that currently deliver local scrappage initiatives.

Of the $92 million in this national program, the Clean Air Foundation will be receiving up to $61 million to manage the new vehicle scrappage program and provide rewards to Canadians.  The foundation will be eligible to receive an additional $14 million for rewards to Canadians, starting April 2009, based on performance and delivery of the program. 

The remaining part of the $92 million (approximately $12 million) allocated for this program will be used by Environment Canada for program administration, research, tracking and evaluation, the development of a national code of practice for vehicle recyclers, audits of recyclers, and program promotion.

Rewards

The rewards will include options to encourage the use of environmentally-friendly transportation, like a public transit pass or a membership in a car-sharing program, or $300 cash. Although rewards could also include a rebate on the purchase of a newer vehicle, no federal funding will be used for the vehicle rebates. Instead, manufacturers and dealers will be encouraged to become partners in the new program.

Vehicle Eligibility

Canadians who own personal vehicles (i.e. cars, pick-up trucks, minivans, or sport-utility vehicles) made in 1995 or earlier can trade their old vehicle for an incentive if it is in running condition and has been registered and insured with the current owner for at least the past six months.  

Owners of vehicles that are not eligible for a reward could receive a tax receipt for the value of the scrap metal. The Clean Air Foundation and local scrappage initiatives will collaborate with car donation programs run by various charities.

Responsible Vehicle Recycling 

If not handled properly, scrapped vehicles can damage the environment by releasing harmful substances such as oil, antifreeze, and mercury. Environment Canada has been working with the Automotive Recyclers of Canada to develop a national code of practice for vehicle recycling to ensure high environmental standards and consistent practices for vehicles retired under the program. Participating recyclers will be required to follow this code, which is expected to be finalized later this year.

Other Initiatives to Reduce Transportation Emissions

The Government of Canada's comprehensive environmental agenda includes initiatives such as the ecoMOBILITY program to help increase transit ridership and alternative transportation; the ecoENERGY for Personal Vehicles program to encourage Canadians to make better purchasing, driving and vehicle maintenance decisions; a Pollution Prevention Notice for automotive manufacturers and steel mills to address the uncontrolled release of mercury from the processing of scrap vehicles that contain mercury switches; and action on renewable fuels.

For more information on the new national vehicle scrappage program, or existing local programs, please visit: www.ec.gc.ca/VehicleScrappage.