Ottawa Reviews Tariffs Amid EV Market Struggles
Ottawa is considering scrapping tariffs on Chinese electric vehicles as Canada’s EV market slows and farmers push for trade relief. A Nanos Research survey for CTV News found 62% of Canadians support or somewhat support removing the 100% tax on Chinese-made EVs. Many believe lifting tariffs could encourage China to ease restrictions on Canadian crops like canola.
Balancing Farmers and Industry Interests
Agriculture Minister Heath MacDonald confirmed Tuesday the government is reviewing the tariffs. He emphasized support for Canadian farmers remains the top priority, but added that the decision must also weigh impacts on other industries. “We are in a fragile position, but we are here to support the farmer first and foremost,” MacDonald said.
EV Sales Face Steep Decline
Canada imposed tariffs in October 2024 to protect local automakers from what it described as China’s unfair trade practices. However, since then, EV sales have struggled. New data from Statistics Canada shows fully electric vehicle sales fell 39.2%, while plug-in hybrid sales dipped 2.2%. By contrast, hybrid electric vehicle registrations surged 60.7%. Analysts link the decline in zero-emission vehicles to the expiration of incentive programs across several provinces.
Shifting Federal EV Targets
Adding to the uncertainty, Prime Minister Mark Carney announced last week a pause on the federal EV sales target. The goal had been 20% of all new light-duty vehicles sold by 2026 to be zero-emission.
Simon Fraser University professor Jonn Axsen says the long-term direction remains clear: Canada is still moving toward electric mobility. He believes that stronger incentives, stricter mandates, and a more open market will be key to boosting sales.
Calls for More Competition and Lower Prices
Axsen argues that opening Canada’s EV market would give buyers more choices. He believes fair competition would encourage Canadian automakers to innovate, potentially positioning them as global leaders. Importantly, he notes that wider access could make EVs more affordable. For example, Chinese automaker BYD sells the Seagull for around $13,800 before tariffs and import costs, while most Canadian EV models start at $45,000.
Concerns Over Industry Impact
Not everyone supports lifting the tariffs. Flavio Volpe, president of the Automotive Parts Manufacturers’ Association, warned that allowing low-cost Chinese EVs could undermine Canada’s auto industry. “Giving away part of the market because enthusiasts want Chinese vehicles, well, we should also remember that these enthusiasts don’t employ anyone,” Volpe cautioned.
What Comes Next
The government’s review underscores the tension between protecting Canadian jobs and responding to consumer demand for cheaper EVs. With global automakers racing ahead, Ottawa’s decision could reshape the future of Canada’s electric mobility market.
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