Why Are We Trading Our Breadbasket for a Battery Pack?

In protecting a shaky electric vehicle dream, Ottawa is putting a $43-billion canola reality at risk — sacrificing a cornerstone of our agricultural economy for a battery pack that may never deliver.

China’s announcement this week of a 75.8% tariff on Canadian canola seed, effective August 14, is not an isolated policy shift—it’s the latest escalation in a trade conflict that Ottawa itself helped set in motion. Earlier this year, on March 20, Beijing imposed 100% tariffs on Canadian canola oil, canola meal, and peas, along with an additional 25% on lobster and pork. These measures were already weighing on our agri-food exports.

The catalyst for this latest blow came in September 2024, when Ottawa moved to impose 100% duties on Chinese electric vehicles (EVs), aligning itself with Washington’s protectionist stance to safeguard the North American EV market. Days later, China launched an anti-dumping investigation into Canadian canola, culminating in this preliminary 75.8% duty—collected as a deposit—while a final ruling is still pending.

Let’s be clear: there is no dumping of Canadian canola into China. Dumping implies selling at prices below production costs or below those in the home or other export markets, typically to capture market share unfairly. Canada’s canola market is highly transparent and globally competitive; these allegations are without merit. What China is doing is strategic—they know canola’s economic and symbolic weight in Canada.

The very name “canola” comes from “Canada Oil”, a 1970s innovation that transformed rapeseed into a high-value, versatile oilseed crop. It is both an economic powerhouse—worth $43 billion annually—and an emblem of Canadian agricultural ingenuity. By targeting canola, Beijing isn’t just disrupting trade; it’s striking at the heart of Canada’s agri-food brand.

The timing is no accident. With harvest just weeks away, farmers have little capacity to pivot to alternative buyers. Australia may pick up some of China’s demand, but it cannot replace Canada’s supply capacity. This means the immediate economic pain—falling prices, reduced revenues, and likely losses—will be felt disproportionately by Canadian farmers. What might have been a break-even year is now a probable deficit for many producers.

The backdrop to all of this is Ottawa’s high-stakes bet on the EV sector. Despite nearly $50 billion in combined federal and provincial investments, Canada’s EV industry is faltering. Sales are dropping, mandates are clashing with market realities, and major projects are delayed or shelved. Without a significant acceleration in charging infrastructure, policy recalibration, and restored investor confidence, the sector risks collapse.

Ottawa’s trade stance is effectively protecting a fragile EV industry at the expense of a robust and profitable canola sector. One is speculative and policy-driven; the other is market-proven and globally competitive. The policy choice here should be obvious: Canada must either adjust its EV tariff position toward China or carve out exemptions to protect agricultural exports. Beijing has made its expectations clear.

This latest dispute is part of a broader pattern of trade isolation. In the past year alone, three major economies—China, India, and the United States—have imposed or escalated measures against Canada’s agri-food sector. India has maintained tariffs on lentils and other pulses since mid-2024, the U.S. continues to levy higher duties on softwood lumber, steel, aluminum, and certain agricultural products, and CUSMA disputes are adding non-tariff friction.

The lesson is simple: Canada is more geopolitically isolated today than at any point in recent memory. Our agri-food sector is being used as collateral in unrelated industrial policy fights. Unless Ottawa recalibrates its trade strategy, Canadian farmers will keep paying the price for political decisions made far from their fields.