Mark Carney defends China EV tariff cut as a controlled step to attract investment
Mark Carney says the reduction in tariffs on Chinese electric vehicles is a limited, staged move meant to spur investment and future auto jobs, despite criticism from Doug Ford and Unifor.
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By Torontoer Staff
Mark Carney defended Ottawa’s agreement to sharply reduce tariffs on Chinese electric vehicles, saying the measure is a limited, staged step to help build Canada’s auto sector for the future, not to revive past business models. Speaking in Doha after a trip to China, he framed the deal as a way to attract investment, technology and partnerships that could create jobs in Ontario and across Canada.
Carney reiterated that the change is modest in market terms and tightly controlled, and he pushed back on criticism from Ontario premier Doug Ford and Unifor, the largest union representing Canadian autoworkers.
What the agreement covers
The agreement with China reduced Canada’s tariff on Chinese EVs from roughly 100 per cent to 6.1 per cent, in exchange for tariff relief on Canadian exports such as canola and seafood. Ottawa agreed to allow imports equivalent to the volume Canada imported from China in 2023, set at 49,000 vehicles, and officials said that number could increase over time if Chinese automakers commit to investing in Canadian production.
- Tariff on Chinese EVs cut to 6.1 per cent from about 100 per cent.
- Initial import cap set at 49,000 vehicles, matching 2023 import levels.
- Officials have discussed a possible rise toward 70,000 by year five, but there is no formal escalator clause in the agreement.
- Commitment that half of the permitted Chinese imports will be affordable EVs, priced under $35,000.
- Expectation, not a firm guarantee, that Chinese firms will partner with Canadian companies and invest in domestic production.
- A review of the arrangement is expected after three years.
Carney’s defence and economic argument
Carney said the import level is a small share of the overall Canadian vehicle market, amounting to less than three per cent of roughly 1.8 million passenger vehicles and trucks sold annually. He framed the move as strategic: opening a modest channel for affordable EVs and, in return, securing interest from Chinese automakers to bring investment, expertise and potential manufacturing partnerships to Canada.
We don’t want to be competitive in the market of 2000, 2010. We want to become competitive in the market in the future. That’s what’s going to get great jobs for Ontarians going forward.
Mark Carney
Carney said the agreement has already prompted direct conversations with Chinese companies expressing interest in producing affordable EVs in Canada and partnering with domestic firms. He called the arrangement a trial and an early-stage effort to bring new entrants into the Canadian market in a controlled way.
Responses from Doug Ford and Unifor
The deal drew immediate and strong criticism. Ontario premier Doug Ford called the decision "a terrible, terrible, miscalculated decision" that would harm Ontario’s auto sector and supply chain. He said the agreement was not discussed with premiers and accused the federal government of failing to protect domestic manufacturers from subsidised foreign competition.
This is going to be terrible for not only just all the people of Ontario, but especially the auto manufacturers, the supply chain.
Doug Ford
Unifor National President Lana Payne warned the deal risks Canadian auto jobs and accused China of using state subsidies, overproduction and unfair trade practices to expand market share. Payne said admitting cheaper, heavily subsidised vehicles undermines labour standards and rewards bad actors.
Providing a foothold to cheap Chinese EVs, backed by massive state subsidies, overproduction and designed to expand market share through exports, puts Canadian auto jobs at risk while rewarding labour violations and unfair trade practices.
Lana Payne, Unifor National President
Questions that remain
Several details remain unresolved or conditional. Officials clarified that while officials discussed a potential increase to 70,000 vehicles by year five, there is no formal escalator clause. The promised rise in imports depends on Chinese firms’ actual decisions to invest and partner in Canadian production. The three-year review will be a key moment to assess outcomes and any labour or industry impacts.
Carney maintained the approach is cautious, focused on creating conditions for competitive domestic EV manufacturing and higher-value jobs. Critics remain sceptical that the benefits will materialise quickly enough to offset immediate competitive pressures on assembly plants and suppliers.
Both supporters and opponents say the next months will be crucial, as Ottawa seeks detailed investment commitments and as provinces, unions and automakers weigh the potential effects on production, jobs and the transition to electric vehicles.
The agreement marks a calculated test of trade-offs between securing market access for Canadian exports and managing the pace of EV imports. Ottawa has positioned it as a route to attract investment and technology, while critics say tighter protections or clearer guarantees for domestic production are still needed.
Canadaelectric vehiclestradeauto industryDoug Ford
