$5000 for a single electric vehicle is what, 10% or less of purchase price?
$500 for a single electric bike would be 10-50% the purchase price of an electric bike (with $5000 being a high end cargobike).
That's 10x the number of Canadians that can use the funds.
That lowers the floor for Canadians to access the rebate.
That means taking vehicles off the road and reducing road and health liabilities for Canadian cities and provinces.
It is much easier for a bicycle manufacturer to pop up than an entire electric car chain. (Some of the struggling ones might hope the border to become Canadian made).
Yes, this differs replacing gas cars in more rural areas. But it can take the majority of car trips and eliminate then; rather than just electrify them.
It can also position Canada to be a leader in electric bikes, rather than a subsidiary of foreign car companies.
I think the pool can be quite large. The main issue is that it is almost always more convenient to drive than bike right now.
That isn't because cars are inherently more convenient, its because we've been making them more convenient for a decade. Some examples of this.
Parking: look at the massive land use that we dedicate to storing vehicles, and then give away for free. Obviously it's not free to whoever builds and maintains them, so that cost is just passed on to everyone to increase the convince of cars.
Traffic lights: cars and trains are the only vehicles that require lighted signals. Everyone else at an intersection gets slowed down so that cars can drive faster in between them. In my city of Kingston, pretty much every major road is 60kph+, but my average driving travel speed is always <35kph. Lights even inconvenience drivers, they're just trained to accept it as normal, and are rewarded with faster travel between lights.
Lanes: cars get a travel lane everywhere. Pedestrians usually get one. Bikes get fucked.
You can see this in action where cities that increase bicycle infrastructure and make it more convenient, get an increase in mode share.