A Q&A with Jose Luis Gutierrez, Sustainable Partnerships at Plunk EV
We hear this one a lot from property hosts and their tenants: “EV drivers don’t pay fuel tax, so they’re freeloading on the roads.” Jose Luis, what do you say to that?
The short answer is: it’s a myth. The longer answer is that the whole premise rests on a misunderstanding of how roads are actually funded in Canada. People assume there’s a direct pipeline from the gas pump to the pothole crew. There isn’t.
Walk us through it. Where does road funding actually come from?
It comes from three main places, and fuel tax is a surprisingly small piece of the picture.
First, municipal roads, which are the roads most Canadians drive on every day, are overwhelmingly funded through property taxes, development charges, and municipal reserves. EV drivers pay property taxes exactly like everyone else.
Second, the federal government transfers money to municipalities through the Canada Community-Building Fund, which used to be called the Gas Tax Fund. The name change is telling: it was renamed specifically because it has nothing to do with gas tax. It’s a per-capita transfer, currently delivering over $2.5 billion a year to more than 3,600 communities across the country. It doesn’t matter whether you drive a Tesla or a pickup truck; your municipality gets funding based on population, not litres of gasoline burned.
Third, provincial fuel taxes do contribute to provincial highway budgets in some provinces. But this is where the math gets interesting.
How so?
The federal excise tax on gasoline is 10 cents per litre. It goes straight into the Consolidated Revenue Fund, which is general federal revenue. It’s not earmarked for roads. The federal government collects roughly $5 billion a year from fuel excise taxes. Of that, about $2 billion flows to the Canada Community-Building Fund for municipal infrastructure. But that transfer is fixed by legislation. It would be exactly the same amount if every car in Canada switched to electric tomorrow.
And as of April 20, 2026, the federal government has temporarily suspended the fuel excise tax entirely on gasoline and diesel until September, so right now ICE drivers aren’t paying it either.
What about provincial fuel taxes?
Provincial fuel taxes vary, but they do partially fund provincial highway budgets. This is the one area where there is a small gap. But several provinces have already moved to close it by introducing EV-specific registration surcharges. Alberta charges EV owners $200 per year on top of standard registration. Saskatchewan doubled its EV road-use charge to $300 per year in 2025. Quebec is introducing a $125 annual fee for BEV owners starting in 2027. So the idea that EV drivers pay nothing is already outdated in those provinces.
How big is the “gap” if you look at the fuel tax revenue EVs aren’t generating?
Tiny. As of early 2025, there were roughly 900,000 plug-in electric vehicles registered in Canada, representing about 3.4% of the light-duty vehicle fleet. Even if you assumed every one of those vehicles would otherwise generate $500 a year in provincial and federal fuel tax, and that’s a generous assumption, you’re looking at maybe $450 million. Annual infrastructure spending across all levels of government in Canada runs well north of $30 billion for transportation alone. Ontario’s 10-year infrastructure plan alone is $190 billion. The foregone EV fuel tax revenue is a rounding error.
Some people argue that EVs are heavier, so they cause more road damage. Is that fair?
It’s technically true that many EVs are heavier than comparable ICE vehicles, usually by a few hundred kilograms because of the battery pack. But this argument collapses the moment you look at who actually damages roads.
Road damage follows what engineers call the AASHTO Fourth Power Law, which came out of a landmark study in the late 1950s. Pavement damage is proportional to axle weight raised to the fourth power. That means a vehicle with twice the axle weight doesn’t do twice the damage; it does sixteen times the damage.
A typical passenger car, whether EV or ICE, has about 1 tonne per axle. A fully loaded five-axle tractor-trailer has about 10 tonnes per axle. The fourth power law means that single truck does roughly 9,600 times the pavement damage of a single passenger car. Some more recent research puts the range at 285 to 343 times, depending on methodology, but the point is the same: the difference between a 1,800 kg Nissan Leaf and a 2,100 kg ICE SUV is noise. The difference between either of those and a loaded semi-trailer is everything.
If someone is genuinely worried about road maintenance costs, they should be looking at heavy truck traffic, not the EV in the parking lot.
So where does that leave the conversation with property hosts?
I’d say three things. One: EV drivers already pay for roads through property taxes, registration fees, and in a growing number of provinces, dedicated EV surcharges. Two: the federal infrastructure funding that flows to their municipality has nothing to do with fuel tax. Three: the EV charger sitting on their property is generating carbon credit revenue under the Clean Fuel Regulations while causing essentially zero incremental road wear. It’s a net positive, not a free ride.
Any final thoughts?
Just that this whole debate tends to frame EVs as a problem to be solved. But EVs are 3.4% of the fleet. The real infrastructure funding challenge in Canada is that we have an estimated $270 billion infrastructure deficit and we’re still trying to fund 21st-century roads with 20th-century revenue tools. That conversation is worth having, but singling out EV drivers isn’t the answer.
To learn more: Electric Autonomy Canada’s Saskatchewan Opens EV Road-Use Tax Debate in Canada provides essential context on how Canada’s first provincial EV road-use charge came about and why advocates argue premature taxation risks stalling adoption while raising negligible revenue. For a U.S. perspective on the same issue, the Electrification Coalition’s February 2026 report, EV Taxes: Road Funding’s Red Herring, shows that EV-specific fees generate well under 1-3% of total state transportation revenues and that in 36 states, EV drivers already pay more in annual fees and taxes than gasoline vehicle drivers.
Jose Luis Gutierrez is a member of the Host Partnerships team at Plunk EV Inc. Plunk deploys Level 2 EV chargers at zero cost to property hosts and drivers across Canada.
April 2026
