Article from the Government of 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.

On June 24, in Vaughan, the Honourable Chrystia Freeland, Deputy Prime Minister and Minister of Finance, and the Honourable Mary Ng, Minister of Export Promotion, International Trade and Economic Development, announced that on July 2, 2024, Canada will launch a 30-day consultation 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.

“[This] announcement underscores Canada’s unwavering commitment to safeguarding our auto sector, securing jobs, protecting rules-based trade, and promoting a competitive electric vehicle sector alongside a robust integrated supply chain. Canada is committed to protecting and promoting fair trade to ensure there is a level playing field for Canadian industries and workers,” said the Honourable Mary Ng. “Collaborating with partners to respect our international trade commitments, we will not stand by while our workers are disadvantaged by non-market practices and a failure to abide by labour and environmental standards.”

The CTMA’s executive director, Robert Cattle, and president, Louis Jahn, have been meeting with Exco officials and Flavio Volpe, and are preparing a submission to the 30-day consultation process that begins on July 2. “This is a big concern for our members and our plan is to deliver our points in-person in Ottawa this month,” said Cattle.

The consultations will 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 will seek comments on cyber and data security related to protecting Canadians’ privacy and Canada’s national security interests. The government will also consider perspectives on policies driving China’s overcapacity and surging exports of EVs, including labour and environmental standards, and unfair and non-market practices.

“Canada is home to the talented workers, raw materials, clean electricity, and specialized production capabilities needed to build electric vehicles, and that has meant our EV supply chain potential is ranked first in the world,” said the Honourable Chrystia Freeland. “However, Canadian workers and the auto sector are facing an intentional, state-directed policy of overcapacity, undermining the Canadian EV sector’s ability to compete in domestic and global markets. This consultation will consider what action we can take to protect our workers, level the playing field, and prevent transshipment or oversupply from China’s anti-competitive 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.

Check out CTMA’s article “Competing with China: The future of Canadian manufacturing is being decided now” in the latest issue of the CTMA View.