The Harper govern-ment may have scored political points with the introduction of its “green” car rebate in the spring budget. But, critics say, the effect the carrot is having on the environment is minimal, at best.

Starting this fall, people who have bought new cars since March 20 with fuel consumption of 6.5 litres or less per 100 kilometres will receive a rebate of up to $2,000. The incentive also applies to minivans, sport utility vehicles and light trucks with fuel consumption of 8.3 litres or less per 100 km.

On the flip side, the government is penalizing those who buy gas-guzzlers by imposing an environmental levy. The penalty starts at $1,000 for vehicles with fuel consumption ratings of at least 13 litres per 100 km but less than 14 litres over the same distance. The levy increases by $1,000 for each litre per 100 km above the threshold, to a maximum of $4,000.

Ottawa estimates it will spend up to $160 million over the next two years on the incentives, while receiving $215 million back from the levy.

According to Robin Browne, senior communications advisor for Transport Canada in Ottawa, the rebate program is on track and cheques will be issued to qualifying Canadians in the coming weeks. “We’ve certainly had a lot of interest in it. Folks are calling and saying, ‘Hey, when do I get my cheque?’” he says. “It’s all about encouraging Canadians to buy environmentally friendly, fuel-efficient vehicles.”

Yet Phil Edmonston, author of the popular Lemon-Aid auto-buying guides, is critical of the concept. Although such programs encourage consumers to consider purchasing more fuel-efficient cars, he says, they don’t do much to reduce net emissions. The government would have been better off providing incentives for people to improve the fuel efficiency of the vehicles they already own.

“By hitching the rebate wagon to the sale of new vehicles, the government is actually creating additional pollution and dependence upon oil. We have too many vehicles on the road as it is,” Edmonston says. “Attaching rebates to fuel-efficient new cars is like tackling overpopulation by giving grants to families that have small kids.”

The mathematics is pretty simple, Edmonston explains: improving an existing vehicle to burn less fuel is still one vehicle on the road. But if everyone were to go out and buy a new fuel-efficient car, it would double the active vehicle population.

“I don’t care if the new car gets 100 miles to the gallon, it’s still an additional gallon and additional pollution,” he says.

Meanwhile, the Canadian Automobile Dealers Association is in favour of incentives that reward technology and help bring more efficient vehicles to market.

For example, the rebate bridges the gap between the $30,000 price-tag of a hybrid vehicle of a particular model and that of the non-hybrid version, which has a sticker price of $22,000. “Most Canadians will opt for the less expensive model,” says Huw Williams, the CADA’s public and government affairs director in Ottawa. So, in this case, “incentives make sense.”

However, the CADA does not support the incentive being based on fuel economy. “That’s a pretty arbitrary line to draw,” says Williams. “Some vehicles surpass [the 6.5-litre threshold] slightly because of safety requirements. It’s very controversial in the market.”

He says the government should eliminate the GST on new vehicles instead to order to persuade people to move to cleaner automobiles.

Although the final numbers have yet to come in, preliminary figures show sales of SUVs have not fallen off since the March budget, Williams says, adding that the government has to consider that it makes sense for many families to drive a larger vehicle to ferry kids to hockey games and soccer practices.

General Motors Canada echoes that sentiment in a recent report, in which it says there has been no positive environmental impact from the government program. In fact, the report shows that SUVs drawing the maximum federal levy of $4,000 have outsold those without the penalties.

“The Canadian SUV market has continued to grow, unabated by feebate levies,” the report says. “The full range of competitive marketplace incentives nullified or made irrelevant any impact of feebates. It’s like pouring a thimble into a river.”

In addition, thousands of consumers have been frustrated by not being able to access forms to apply for these rebates, the report says.

@page_break@Another problem is that current rebates only apply to 2006 and 2007 model vehicles and don’t include 2008 vehicles, many of which were rolled out by the end of summer, the report adds. IE