Canada freezes rebate payments to Tesla, bans it from future rebate programs due to tariffs

March 25 (Reuters) - Canada has frozen all rebate payments for Tesla and banned the electric-vehicle maker from future EV rebate programs, Transport Minister Chrystia Freeland said on Tuesday.

No rebate payments will be made until each claim is individually investigated and determined to be valid, Freeland said in an emailed statement shared by her office.

Freeland also directed the transport department to revise eligibility requirements for future iZEV programs to ensure that Tesla vehicles are not eligible as long as the "illegitimate and illegal U.S. tariffs are imposed against Canada."

Tesla did not immediately respond to a Reuters request for comment.

U.S. President Donald Trump has imposed a slew of new tariffs, with the bulk due in early April, in the form of steep 25% taxes on most goods from Canada and Mexico.

Trump on Monday said automobile tariffs are coming soon, although not all of his threatened levies would be enforced on April 2.

Canada has frozen C$43 million ($30.11 million) of rebate payments for Tesla. The order to stop the payments came before Canadian Prime Minister Mark Carney announced a general election on April 28, according to the Toronto Star, which reported the news earlier.

The Star reported earlier this month that Tesla filed an extraordinary number of EV rebate claims in the final days of the program in January, with a single Tesla dealership in Quebec City claiming nearly C$20 million in public subsidies by documenting more than 4,000 electric vehicle sales over a single weekend.

Toronto stopped providing financial incentives for Tesla vehicles purchased as taxis or ride shares because of trade tensions with the U.S. earlier this month.

Tesla CEO Elon Musk, a close ally of Trump, has been leading the White House effort to shrink the federal government and budget as the head of the so-called Department of Government Efficiency.

($1 = 1.4279 Canadian dollars) (Reporting by Juby Babu in Mexico City and Ismail Shakil in Ottawa; Editing by Alan Barona)