China DOMINATES Canada on electric vehicles, says budget watchdog
The Trudeau government implemented a 100% tariff on Chinese-made electric vehicles, followed by a 25% tariff on Chinese steel and aluminum.
Protectionist measures against Chinese auto imports will boost government revenues by hundreds of millions of dollars, the budget watchdog says.
In June, Finance Minister Chrystia Freeland blamed China for flooding Canada with inexpensive electric vehicles (EVs), as part of an “intentional, state-directed policy.” She promised “clear, strong, decisive action” to counter “unfair competition.”
Imports of Chinese-made EVs surged nearly 1,900% this year, reaching $2.3 billion, says the Parliamentary Budget Officer (PBO).
PM Trudeau announces Canada will put a 100% tariff on Chinese electric vehicles and a 25% tariff on Chinese steel and aluminum.
— Rebel News (@RebelNewsOnline) August 26, 2024
"Actors like China have chosen to give themselves an unfair advantage in the global marketplace," he says.https://t.co/PHR7jF0lJM pic.twitter.com/cG8UHlSJom
After consulting the public for 30 days, Canada hesitated on using retaliatory tariffs against China, prompting Opposition backlash.
“The Americans didn’t hesitate to protect jobs and industries. Canadians right now are waiting three months to hear whether we will mirror the tariffs put on those industries,” said Conservative MP Ryan Williams, who tabled a prior motion calling for tariffs.
On August 1, the United States increased tariffs to 100% on Chinese-made EVs. They imposed additional tariffs on Chinese steel and aluminum, semiconductors, solar cells, batteries, and critical minerals on May 14.
The Trudeau government implemented a similar tariff October 1, followed by a 25% tariff on Chinese steel and aluminum. Ottawa said the measures would protect Canadian workers from “unfair” practices and oversupply.
A December 5 PBO report estimates tariffs on Chinese-made electric vehicles, steel and aluminum will generate $473 million in revenue through fiscal year 2028/2029.
More than $600 million in pension dues have been invested in China’s electric vehicle sector, according to disclosures from the Canada Pension Plan Investment Board.
— Rebel News Canada (@RebelNews_CA) July 3, 2024
MORE: https://t.co/ReUthvPF9O pic.twitter.com/vzr6Vbdbct
Though investments in the domestic EV sector total more than $150 billion, China continues to dominate the global market, leaving Canadian industries with few alternatives, reported the Epoch Times. Tesla’s Shanghai plant further compounds the problem.
The Asiatic superpower constitutes 80% of the lithium-ion battery supply, as well as battery components, globally.
“The stakes really could not be higher for Canada’s economic future,” said MP Williams in August.
Billions more were invested in Chinese battery manufacturers, including $604 million in pensioner dues for shares in Chinese-made EVs. Minister Freeland made no prior mention of pensioner investments in the Chinese auto-electric sector.
“We are living in a world right now where China is taking advantage of the global economic system,” she told reporters. “We know we need to defend our national interest and we will.”
WATCH: Is there a future for Ford's Oakville assembly plant? Sources say things look bleak…
— Rebel News Canada (@RebelNews_CA) November 18, 2024
Disturbingly, the Canadian and Ontario governments continue to invest tens of billions of taxpayer dollars into EV plants to produce cars that few can afford!https://t.co/48qRCPwEDI
On October 18, the federal government allowed local businesses to request remission from these tariffs for fear domestic struggles would persist.
“For the other tariff items impacted by the surcharge, imports from China account for a negligible share. As a result, importers are likely to source goods from countries not subject to the 100 per cent surtax,” the PBO report said.
In 2023, Chinese steel accounted for 8.1% of Canada’s total steel imports, while Chinese aluminum made up 21.8% of Canada’s total aluminum imports.
The report indicates an excess supply of Tesla EVs produced outside China, of which some could be diverted to Canada, thereby avoiding the tariff. That accounts for demand from countries with greater purchasing power.
Deputy PM Freeland is asked about Trump's past criticism of her and why she's best to lead negotiations with a new Trump admin.
— Rebel News (@RebelNewsOnline) November 8, 2024
Freeland points to the Liberals negotiating the USMCA trade deal and putting tariffs on Chinese EVs, steel and aluminum. pic.twitter.com/huYWqzgfCj
Meanwhile, PBO analysts suggest the EV tariff would force consumers to opt for alternative transportation. Of 25.7 million vehicles registered nationwide only 327,732 are battery-powered electrics, according to Statistics Canada.
The only Chinese-made EVs currently sold in Canada are produced by Tesla, which reported a 9% drop in earnings due to sagging demand.
A federal mandate insists on rendering fossil-fuel vehicles obsolete by 2035, though EV demand faces a “significant slowdown.” Statistics Canada says purchases plateaued in the third quarter of 2023.
“We need to make sure we have adoption,” testified François-Philippe Champagne, the Minister of Industry, before the Commons industry committee last month. “We’ve seen what is going on in the United States. We are working with provinces … to make sure we have greater adoption.”
Canada represents the fifth-largest market for Tesla vehicles, according to analysts.
Alex Dhaliwal
Calgary Based Journalist
Alex Dhaliwal is a Political Science graduate from the University of Calgary. He has actively written on relevant Canadian issues with several prominent interviews under his belt.
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