You might have seen those bright yellow fields reaching toward the horizon under a clear blue sky 鈥 fields of canola spread across Alberta, Saskatchewan and Manitoba, bringing in billions of dollars each year for farmers and their families.
Now the annual harvest is in danger: one of Canada鈥檚 biggest customers, China, has slapped a 76 per cent tariff on canola seed, as well as a 100 per cent tariff on canola oil and meal. Why has it done this? In retaliation for the 100 per cent tariff Canada applied to Chinese electric vehicles starting last October. We were copying the United States at the time, back when relations between our two countries were more cordial, to protect the American and Canadian auto industries. But the Canadian sector, which operates mostly in Ontario, has yet to produce a single EV.
It may seem odd to compare revenue from Canada鈥檚 favourite cooking oil with revenue from its auto sector, but that鈥檚 what it鈥檚 come down to. Thousands of canola farmers 鈥 there are about 40,000 in Canada 鈥 and workers who process and transport the seed and oil depend on that crop to earn a good income. The U.S. is our biggest customer, having imported $7.7 billion last year, while China ranks second at $4.9 billion. .
No doubt this presents a conundrum for Prime Minister Mark Carney: Does he focus on saving the auto industry or the canola industry? He could lift the 100 per cent tariff on Chinese EVs, which might make the canola tariffs disappear. But would those EVs threaten Canada鈥檚 own auto industry? It鈥檚 a situation that pits West against East 鈥 with Carney acting as referee.
Alberta Premier Danielle Smith has called for the tariff on electric vehicles to be lifted, stating that 鈥渋t makes no sense to have a punitive tax to protect an industry that doesn鈥檛 yet exist in Canada, which is the EV industry, at the same time as we鈥檙e getting punished鈥 by China on canola exports.
She must have choked on that one, as Smith has throttled renewable-energy development in Alberta and to discourage anyone who might be thinking about reducing their oil and gas consumption.
Manitoba Premier Wab Kinew, meanwhile, noting that Carney recently decided to remove retaliatory tariffs on U.S. goods coming into Canada, said he鈥檇 also like to see the prime minister remove tariffs on Chinese electric cars, trucks and buses in exchange for China dropping its .
That would certainly please drivers who want less expensive EVs. Clean Energy Canada, a think-tank at Simon Fraser University focused on the renewable-energy transition, , to be released in September; it shows that four in five Canadians oppose the 100 per cent tariff on Chinese EVs and would prefer either a lower tariff or no tariff at all. In the wider world, .
Canada鈥檚 biggest canola producer is Saskatchewan, and Premier Scott Moe is to sweet-talk government officials under President Xi Jinping. Still, he鈥檚 admitted that only Carney can seal the deal with Xi.
So will the prime minister offer to reduce or lift the EV tariff in exchange for China reducing or lifting its tariffs on canola? Would doing so imperil our own auto sector? We鈥檒l have to wait and see, but the answer could well indicate whether Carney might consider sacrificing canola farmers to save one of Ontario鈥檚 key industries.
Of course, in an ideal world, we鈥檇 rather have a thriving canola industry and a thriving auto sector. It seems we can鈥檛 have both, however 鈥 at least not now.
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