All federal zero-emission vehicle incentive payouts to Tesla have been put on hold, pending an investigation to determine the validity of “each claim,” according to Canada’s Transport Minister Chrystia Freeland.

The U.S. EV maker filed 8,669 rebate claims worth $43.2 million during the final three days of Ottawa’s Incentives for Zero-Emission Vehicles (iZEV) program in January. The rush of claims helped empty government coffers of funding and left more than 200 franchised dealers — and automakers that stepped in in support — on the hook for more than $10 million in unpaid government rebates.

Tesla’s $43M in Canadian EV rebate claims raise alarm as competitors demand answers

In a statement March 25, Freeland said she ordered department staff to stop all outflows to Tesla when she took over as transport minister March 23.

“No payments will be made until we are confident that the claims are valid.”

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The development was first reported by the Toronto Star.

Transport Canada did not say whether any of Tesla’s claims were cause for concern, and it is not clear how many of the thousands of claims made between Jan. 10 and 12 had already been paid by Ottawa. Once filed with Transport Canada, iZEV claims worth up to $5,000 per vehicle were typically paid within 20 business days of the purchases being validated.

Tesla did not respond to request for comment on its iZEV activities.

Tens of millions in rebate funding disappeared over 72-hour period

The flood of claims that put the iZEV program underwater began Jan. 10, instigated by a warning from Transport Canada that the program would run out of funding prior to its expected end date of March 31.

Tesla was the lead actor in filing claims over the following two days, accounting for 88.7 per cent of all claims from Jan. 10-12, according to data from Transport Canada. But it wasn’t alone. Hundreds of franchised dealers filed more than 1,000 claims during the three-day window, as retailers rushed to finalize government incentive payments for consumers.

Notably, the claims submitted by Tesla and other dealerships in the program’s final days do not necessarily reflect sales or deliveries in that timeframe. The claims captured by Transport Canada’s data, reported monthly, reflect the date the claim enters the government’s system. They may be paid or be in processing.

The government department shut down the submission portal Jan. 12. It informed dealers a day later that the program’s funding pool had been fully exhausted and no further claims would be accepted.

The Canadian Automobile Dealers Association (CADA), which represents thousands of franchised dealers across Canada, has been pressing Transport Canada for weeks over Tesla’s “confounding” number of rebate requests.

“What did Tesla know? When did they know it? How were they able to move forward in such a highly unusual way over the course of a weekend?” Huw Williams, the organization’s director of public affairs, told Automotive News Canada earlier this week.

Transport Canada, it appears, will be seeking those answers from the U.S. EV maker.

Previously, the department would not confirm it was investigating Tesla’s claims. In mid-March, spokesperson Sau Sau Liu said the department “continues to assess the large batch of claims submitted by dealerships” after the program’s pause.

Tesla excluded, if incentive program returns

While the iZEV program has been officially paused since Jan. 13, between an empty funding pool, upcoming federal election and impending U.S. tariffs, it is uncertain if it will return.

In any case, Tesla need not apply. Along with the investigation into the last-minute claims, Freeland said she directed staff to disqualify Tesla vehicles from any future rebate programs “so long as the illegitimate and illegal U.S. tariffs are imposed against Canada.”

The federal move — wholly symbolic unless the rebate program resumes — is the latest in a string of broadsides that the U.S. EV maker has absorbed across Canada in recent weeks.

Earlier this month, the B.C. government cut Tesla products from a set of clean-energy rebate programs, citing company CEO Elon Musk, a close adviser of U.S. President Donald Trump. Nova Scotia, Manitoba and Prince Edward Island have since scrapped Tesla from their EV incentive programs.

Transport Canada did not immediately respond to request for comment about how long its investigation of Tesla’s rebate claims will last.