The Canadian government has announced measures aimed at safeguarding Canadian workers and key economic sectors, including the electric vehicle (EV), steel, and aluminum industries, from what it described as unfair trade practices by China.
First, Canada will be implementing a 100-percent surtax on all Chinese-made EVs starting on Oct. 1, said a news release from the Department of Finance Canada. This surtax will apply to electric and certain hybrid passenger vehicles, trucks, buses, and delivery vans.
The federal government said that it would be imposing this surtax on top of the existing 6.1 percent Most-Favoured Nation import tariff presently applicable to EVs imported from China.
Chrystia Freeland, deputy prime minister and minister of finance, stressed in the news release that Canada’s “EV supply chain potential is ranked first in the world.” Freeland highlighted the importance of Canada’s auto manufacturing industry, which supports over 125,000 jobs, as well as the country’s steel and aluminum sectors, which employ over 130,000 workers.
Second, beginning Oct. 15, the federal government will also be implementing a 25 percent surtax on imports of steel and aluminum products from China.
“The measures announced today are an important step towards ensuring Canadian workers and businesses can compete fairly,” said Mary Ng, minister of export promotion, international trade and economic development, in the news release. “Global trade rules are not always adequate to protect against the type of non-market behaviour we have witnessed from China in this sector.”
The federal government is also planning to conduct a 30-day consultation to consider further protective measures for other sectors deemed critical to Canada’s future prosperity – specifically batteries and battery parts, semiconductors, solar products, and critical minerals.
Lastly, Canada intends to limit eligibility for its zero-emission vehicle incentive programs to products manufactured in countries with which Canada has free trade agreements. This change will affect the Incentives for Zero-Emission Vehicles, the Incentives for Medium and Heavy Duty Zero Emission Vehicles, and the Zero Emission Vehicle Infrastructure Program.
“We applaud the consensus reached by government and opposition parties—these measures will ensure long-term manufacturing growth, protect highly-skilled labour, and support Canadian communities,” said Matthew Holmes, senior vice president of policy and government relations of the Canadian Chamber of Commerce, in a statement. “These policies are important from a wider economic security perspective, including cybersecurity risks.”
Canada will be reviewing these newly announced measures within a year of their implementation, according to the finance department’s news release.