Ottawa, Ontario - Department of Finance Canada
Auto manufacturing directly supports over 125,000 good-paying Canadian jobs, many of which are unionized. Canada's electric vehicle (EV) supply chain potential is ranked first in the world-and the federal government is seizing the growth opportunities of EVs to ensure Canadian auto workers can succeed well into the future.
Canadian auto workers and the auto sector, however, currently face unfair competition from China's intentional, state-directed policy of overcapacity and lack of rigorous labour and environmental standards. Chinese producers are generating a global oversupply that will erode the profit incentives of EV producers around the world, including in Canada.
As first announced on June 24, 2024, Canada is today launching a 30-day consultation, from July 2, 2024, to August 1, 2024 on potential policy responses to protect Canada's auto workers and its growing EV industry from unfair trade practices, and prevent trade diversion resulting from recent action taken by Canadian trading partners.
The consultations seek views on potential policy responses, including a surtax under section 53 of the Customs Tariff, and possible additional measures such as adjustments to the federal Incentives for Zero-Emission Vehicles (iZEV) program and investment restrictions. The consultations also seek comments on cyber and data security related to protecting Canadians' privacy and Canada's national security interests. The government is also considering perspectives on policies driving China's overcapacity and surging exports of EVs, including labour and environmental standards, and unfair and non-market practices.
Action is necessary to level the playing field for Canadian auto workers and for Canada's EV industry to compete in domestic, North American, and global markets. Action will also guard against unfair competition from a potential surge of Chinese imports resulting from the diversion of Chinese EVs from markets that have recently announced increased trade protections on Chinese EVs, including the United States and the European Union.
