The federal government is partially rolling back its steep tariffs on Chinese-made electric vehicles under a new trade agreement with China, a move that has drawn sharp criticism from Ontario Premier Doug Ford and Canada’s auto workers.
The agreement, announced Friday following Prime Minister Mark Carney’s recent meetings with Chinese leaders including President Xi Jinping, will allow up to 49,000 electric vehicles manufactured in China to enter Canada at a reduced most-favoured-nation tariff rate of 6.1 per cent. Outside that quota, Chinese EVs will continue to face a combined tariff of 106.1 per cent.
Ottawa said the 49,000-vehicle cap mirrors the number of Chinese EVs imported in the year before Canada imposed 100 per cent tariffs in late 2024, alongside similar measures by the United States. The quota represents less than three per cent of total vehicle sales in Canada.
In exchange, China is expected to sharply reduce tariffs on Canadian agricultural exports. Duties on Canadian canola seed are set to fall to about 15 per cent from roughly 85 per cent by March 1, while anti-discrimination tariffs on canola meal, lobster, crab and peas are expected to be lifted through at least the end of the year.
The federal government estimates the agricultural concessions could unlock nearly $3 billion in export orders and says more affordable EV options will benefit consumers, with more than half of imported Chinese EVs expected to be priced below $35,000 within five years.
Ontario Premier Doug Ford warned the move could hurt Canada’s economy and cost jobs in the province’s auto sector. He said lowering tariffs on Chinese EVs risks undermining domestic automakers and could jeopardize access to the U.S. market, Canada’s largest auto export destination.
Unifor, which represents autoworkers at major Canadian auto plants, also criticized the decision. National president Lana Payne called the deal a serious risk to Canadian auto jobs, arguing it gives an advantage to heavily subsidized Chinese manufacturers while complicating ongoing trade tensions with the United States.
The federal government says the agreement is part of a broader effort to reset Canada–China relations and boost exports, with a goal of increasing Canadian exports to China by 50 per cent by 2030.