Ottawa eyes $3,500 'cash-for-clunkers' program

Renata D'Aliesio, Canwest News ServiceJuly 5, 2009

Environment Minister Jim Prentice said Saturday he's reviewing whether Canada should follow the United States and several European countries in offering consumers a substantial financial incentive to scrap their clunkers and buy new vehicles. Prentice said he's met with a number of auto manufacturers over the past few months to discuss the prospect of giving Canadians $3,500 to trade in their older, polluting vehicles. Makers and sellers of cars have been aggressively lobbying Ottawa to adopt the measure, contending it will significantly boost sales in the sagging auto sector while reducing greenhouse gas emissions. Pressure has mounted since U. S. President Barack Obama signed a "cash-for-clunkers" program worth up to$4,500 US into law last month. However, Prentice said before making a decision on whether the federal government would adopt a similar incentive, he wants to evaluate the effectiveness of an existing program, which offers modest rewards that vary across the country.

In Alberta, drivers who scrap vehicles made in 1995 or earlier can get up to $490 for a bicycle, up to a year's worth of monthly transit passes, or $300 cash. "We have a limited program that's in place now that was frankly put in place before the recession began. It was directed at getting clunkers off the road. It wasn't really designed as an economic-stimulus package," said Prentice, who was in Calgary for the annual Calgary Stampede festival.Prentice suggested a decision on whether to offer clunker-driving Canadians more lucrative rewards to buy new cars will be made within 60 days.