Key Takeaways:
- The federal government has struck a deal with China to reduce tariffs on canola from 84% to 15% and eliminate tariffs on canola meal, peas, and some seafood products.
- In exchange, Canada will allow nearly 50,000 Chinese-made electric vehicles into the country at a low tariff rate.
- Saskatchewan Premier Scott Moe believes the deal is a "good deal for Canada" and will benefit the entire country in the long term.
- Ontario Premier Doug Ford has criticized the deal, saying it will hurt his province’s auto industry.
- The deal is part of a larger trade mission to reset the Canada-China relationship and reduce Canada’s reliance on the US for trade.
Introduction to the Trade Deal
The recent agreement between the Canadian government and China to reduce tariffs on canola and other agricultural products has been met with both praise and criticism. Saskatchewan Premier Scott Moe has hailed the deal as a "good deal for Canada," while Ontario Premier Doug Ford has expressed concerns that it will hurt his province’s auto industry. The deal, which was announced as part of Prime Minister Mark Carney’s trade mission to Beijing, slashes China’s tariffs on canola from a combined 84% to 15% and eliminates tariffs on canola meal, peas, and some seafood products until at least the end of the year.
The Terms of the Deal
In exchange for the reduced tariffs, Canada will allow nearly 50,000 Chinese-made electric vehicles into the country at a low tariff rate. This has been a point of contention for Premier Ford, who believes that the influx of cheap Chinese vehicles will undermine Ontario’s auto industry. However, Premier Moe has argued that the deal is not a matter of federal favouritism and will benefit the entire country in the long term. The deal is seen as a crucial step in rebuilding the structural foundations of China and Canada’s trade, with memorandums of understanding signed on energy and food safety.
The Benefits of the Deal
Premier Moe believes that the deal will set the stage for many more agreements that will diversify trade from an increasingly unreliable southern neighbour. He points out that the deal will benefit not just Saskatchewan’s $6.7-billion canola industry, but also other provinces such as Manitoba, which is a major grower of canola. The deal will also help farmers across the country, particularly in the Atlantic provinces, where seafood products such as lobster and crab are essential. In 2023, China accounted for $1.4-billion in trade of fish and seafood, second only to the US.
The Long-Term Value of the Trade Mission
The long-term value of the trade mission lies in rebuilding the structural foundations of China and Canada’s trade. Premier Moe points to the memorandums of understanding signed on energy and food safety as evidence of this. The Canadian Food Inspection Agency has also signed an MOU with the Chinese customs agency to enhance long-term co-operation and co-ordination on food-safety and animal and plant health matters. This marks a significant pivot for two countries whose political battles often manifest in agricultural trade disputes. With these MOUs in place, Premier Moe sees potential for more Canadian exports to China in conventional energy products, such as oil and gas, alongside Chinese investment in liquefied natural gas plants and the Alberta oil sands.
Addressing Concerns and Criticisms
Premier Ford has doubted the deal will yield any long-term benefits for his province and questioned the likelihood of China investing further in the Canadian economy. However, Premier Moe has acknowledged the toll global trade tensions have taken on Ontario’s auto manufacturing sector and emphasizes the need for Canadian leaders to stay focused on the real threat facing the national economy. He believes that the deal will increase jobs in the sector and set a framework for Canada and China’s auto trade. A new policy to be released in February will reserve preferential access to the Canadian domestic auto market for foreign manufacturers who build vehicles in this country.
Conclusion and Future Outlook
In conclusion, the deal between Canada and China on canola tariffs is a significant step forward in rebuilding the trade relationship between the two countries. While there may be concerns and criticisms, Premier Moe believes that the deal is a "good deal for Canada" and will benefit the entire country in the long term. As Canada continues to navigate the complexities of global trade, it is essential to stay focused on the real threats facing the national economy and work towards diversifying trade and reducing reliance on the US. With the right approach and agreements in place, Canada can capitalize on the opportunities presented by the deal and create a more prosperous and secure future for all Canadians.
