Half of Canada’s EV market risks being swallowed up by China

Prime Minister Mark Carney’s promise to lift major tariff restrictions on Chinese electric vehicles is poised to give China a major share of Canada’s EV market, according to federal data.

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Prime Minister Mark Carney’s promise to lift major tariff restrictions on Chinese electric vehicles is poised to give China a major share of Canada’s EV market, according to federal data.

Statistics Canada data show that annual sales of new battery electric vehicles in Canada have averaged about 108,000 units since 2020.

Blacklock’s Reporter revealed that Carney’s decision to reduce Canada’s tariff on Chinese EVs to 6.1 per cent — with an initial quota of 49,000 vehicles — would effectively open up roughly half of the market to Chinese manufacturers.

Carney announced the decision Friday in Beijing during remarks to the Canada-China Business Council, acknowledging China’s “formidable” capabilities in electric vehicles.

“China’s strengths, for example, in electric vehicles, are formidable,” Carney said. “They are undeniable. These are the most affordable and energy efficient and innovative vehicles in the world.”

“We need to learn from, partner with and access and build supply chains with China,” he added.

The move marks a sharp reversal from Ottawa’s previous position. In 2024, the federal government imposed a 100 per cent tariff on Chinese EVs and warned of what it described as predatory and unfair competition.

“Workers and the auto sector currently face unfair competition from China,” former finance minister Chrystia Freeland said at the time, according to Blacklock’s.

“The reality is China has an intentional, state-directed policy of over-capacity and over-supply designed to cripple our own industry,” Freeland said. “We simply will not allow that to happen to our electric vehicle sector which is showing such promise and in which we have invested.”

Labour leaders and industry groups renewed those concerns following Carney’s Beijing announcement.

“Lifting the surtax risks turning Canada into a dumping ground for China-owned companies at the expense of our domestic auto industry,” Unifor national president Lana Payne said, arguing the federal government is “providing a foothold to cheap Chinese electric vehicles backed by massive state subsidies”.

Carney linked the EV tariff change to broader trade talks with Beijing, including relief for Canadian agricultural exports.

China agreed to temporarily reduce tariffs on Canadian canola — duties that Blacklock’s reported have significantly hurt exports — and the Canola Council of Canada said it was “pleased with this significant progress.”

Carney acknowledged the canola relief is not permanent, saying Ottawa expects China to reduce combined canola seed tariffs to about 15 per cent by March 1, down from roughly 84 per cent. Canola meal, lobster, crab, and peas would be exempted from related tariffs from March through at least the end of the year.

The deal is expected to face scrutiny in Parliament once the House returns on January 26.