The federal government has signed a deal with Mitsubishi to put the Japanese automaker's all-electric car into a demonstration and testing program – as part of a wide-ranging strategy to test the viability of alternative fuel vehicles on Canadian roads.

Transport Canada will test a pair of zero-emission i MiEVs, which have been described by some auto journalists as a pioneer in the realm of electric vehicles. (The ‘i' stands for innovative, the rest stands for "Mitsubishi In-wheel motor Electric Vehicle.")

Osamu Masako, Mitsubishi's parent Japanese company president, was in Toronto Thursday at the Canadian auto show to announce the deal and present the i-MiEV, among other new vehicles in his company's fleet, to the Canadian public.

The company hopes to widen its presence in Canada, announcing it would offer a compact crossover vehicle this summer, expand its dealer network and open a $4.5-million parts distribution centre in Mississauga, Ont. in 2011.

Transport Canada will test the i MiEV -- one of the world's first fully electric production vehicles -- at government facilities to test its handling, performance and how far it can travel on a charge.

Being a full plug-in, the i MiEV produces zero tailpipe emissions, and the company says it's capable of producing high torque at low speeds, with a range of up to 120 kilometres on a single battery charge. The car also features a regenerative braking system that captures some of the energy that's normally lost as heat during braking.

The federal government's testing of alternative fuel vehicles -- which also include clean diesel cars, hybrids and hydrogen fuel-cell powered vehicles -- is aimed at assessing the potential environmental benefits of these vehicles in Canada.

Mitsubishi also has signed agreements with the City of Vancouver, the B.C. government, BC Hydro, and Hydro Quebec to test the vehicles.

While it's already selling in Japan, at 4.59 million yen (which is over CDN$53,000), cost may be the biggest stumbling block in how ubiquitous i Mievs would be on Canadian roads. While that figure may very well drop, that's nearly twice the cost of a Toyota Prius.

Speaking of the Prius, visitors to the Canadian Auto Show were the first to see its plug-in hybrid incarnation, the Prius PHV. Toyota says the car can travel 20 km on electricity only and deliver zero emissions while cruising around town. On the highway, the gas-electric powertrain kicks in.

Mitsubishi has been developing alternative propulsion systems for cars since the 1970s. The company built several electric cars in the ‘90s, with their FTO EV breaking a distance record for an electric vehicle when it covered 2,142.3 km in 24 hours, on Dec. 19-20, 1999.