Competitive car prices coming to Canada from China

Prime Minister Mark Carney just made a trade deal with China, but there is unnecessary worry coming from Ontario. On January 16, Carney and Chinese President Xi Jinping struck a preliminary deal for removing tariffs and bringing trade back between the two countries. Before this, in 2024, Ottawa set a 100 per cent tariff on Chinese electric vehicles (EVs). China responded by putting tariffs on Canadian canola and seafood products. Removing those barriers is now finally happening. But not everyone’s happy.

The preliminary trade agreement between Canada and China is Carney’s attempt at fighting against United States President Donald Trump’s tariffs. The plan is to allow up to 49,000 Chinese EVs with a tariff of just 6.1 per cent. In return, China will allow canola products and seafood products with a 15 per cent tariff. While this agreement is still in the preliminary stages, it has massive upside potential if implemented. The prairies would presumably see a great uptick in sales, as well as the East Coast. Foreign vehicles in Canada, though, are a big concern in Ontario’s automotive industry.

The most prominent voice in this discussion is Ontario Premier Doug Ford, who argues that foreign vehicles could significantly disrupt Canada’s automotive industry. Alongside Ford, Flavio Volpe, the president of Automotive Parts Manufacturers’ Association (AMPA), was also concerned. But Volpe was less concerned about the economy and more worried about the safety features. While Ford is overreacting to the situation, Western Canada is tentatively excited about it. 

With the farmers across Saskatchewan, Alberta, and Manitoba being able to sell more product, this seems like a great swing in the right direction. Saskatchewan Premier Scott Moe believes the deal could be a step in the right direction too. Even Alberta Premier Danielle Smith was glad to see Chinese tariffs cut. So should Ontario be concerned? Not even a little bit.

Ford is attempting to be a fearmonger towards Chinese goods. In an interview, Ford referred to the EVs coming to Canada as “Chinese subsidized spy cars.” But 49,000 vehicles are nothing in the grand scheme of things. It will barely make a dent. 

In 2024, 1.3 million vehicles were produced in Canada according to the Canadian Vehicle Manufacturers’ Association (CVMA). Among all the vehicles produced, most come from Ontario. This helps contribute $16 billion CAD to Canadian Gross Domestic Product (GDP). So in no way could 49,000 EVs disrupt Ontario’s automotive industry. If anything, it would likely bring more competitive prices to vehicles in Canada, making things more affordable.

Between Alberta, Saskatchewan, and Manitoba, this deal with China will bring a lot of good to the economy. Even though Ford feels that 49,000 EVs can collapse Ontario’s automotive industry, it just isn’t true. Opening up trade with China is an inherently good thing that can hopefully offset the always-changing trading landscape.