Canada’s largest private sector union is calling on Ottawa to keep its 100 per cent surtax on electric vehicles imported from China, warning that removing it would threaten auto jobs across the country.
Unifor submitted its position to the federal government’s Section 53 review of the tariff, saying Chinese automakers enjoy unfair advantages through state subsidies, weak labour standards and carbon-intensive production.
“Lifting tariffs on China will make a bad situation far worse, if Canada becomes a dumping ground for cheap, unfairly subsidized imports,” said Unifor national president Lana Payne. “It would be nothing short of a self-inflicted wound at a time when one-third of our members at Detroit Three facilities in Canada are on layoff, with three automobile assembly plants sitting idle.”
The union said lifting the surtax now would risk undoing recent investments in vehicle assembly, battery production and critical minerals. It is asking Ottawa to extend the surtax for at least 24 months, broaden it to include EV and battery components, and reinstate federal EV rebates restricted to Canadian and North American-built vehicles. The union also wants stronger enforcement against goods made with forced labour.
Unifor said Canada should align its approach with the United States and Mexico. The U.S. has combined tariffs of 127.5 per cent on Chinese EVs and plans to restrict connected car technology by 2027, while Mexico raised its EV import tariffs to 50 per cent this year after Chinese vehicles surged to 70 per cent of its market.
Highly competitive markets approach perfect competition which means firms can’t make significant profit over their costs. That means low prices and no economic rent which leaves more capital for expanding the economy elsewhere. Firms want to profit-maximize and and perfect competition prevents them from increasing their profits. Most of the profits above cost are collected by the exec layer and major shareholders. Hence what’s bad for a firm’s exec in a highly competitive market - low profit - is good for the rest of the economy - low prices. No energy to explain further, feel free to disagree.
Why should I? I already said the solution for is is to get factories in Canada. That eliminates the assembly labour concern. As for the supply chains, that problem exists across all domestic automakers since they use the same supply chains. It’s not going away anytime soon. If we manage to build some local supply chains as we’ve planned it would be reduced but unlikely eliminated. The only way to reduce the PRC supply chain usage in the near term is to reduce driving and vehicle sales. And that’s not happening for many reasons. Car-dependency and strong auto industry among them. So there’s no point talking about something that isn’t changing. I’m focusing on what can change and how to avoid Canadian fascism. Maybe you make different value judgements but I’ve been Canadian for a very long time and I intend to spend the rest of my life here, so that’s mine.
PS: Moral arguments are generally weaker than material self-interest arguments. A lot more people would respond positively to an argument about independence and self-sufficiency than one about the labour conditions in a foreign country. Temu’s really popular in Canada.
No. This is not true. They don’t use the same supply chains. This is outright misinformation that is unfortunately very widespread. Chinese EV makers’ supply chains like BYD’s are fully vertically integrated, meaning local -or any- suppliers can’t sell to BYD and other Chinese rivals. The Chinese companies import everything.
In addition, they fill their factories with Chinese migrant workers, meaning there are no jobs for locals either. And, again, the slave-like conditions are evident across the globe, just look at BYD’s Brazilian plant that was shut down last year for exactly this reason. In Hungary, BYD is being filling hundreds of jobs with Chinese immigrants (according to Hungarian media close to the Orban-government, these people are housed in container-like shielded-off from the local population, a move that is typical for Chinese investments abroad).
I said this:
I mean that domestic auto manufacturers like Ford, GM and Stellantis use the same supply chains. For example Ford uses CATL LFP batteries. They all use Chinese magnets. The components of the electronics are Chinese. We saw the impact of that during the COVID-induced chip shortage where domestic auto manufacturing ground to a halt when China locked down. We were able to make the mechanical parts of the vehicle with no electronics in it. These supply chains do not exist in North America. I know for a fact that using Chinese EV skateboards (whole subassembly that includes the base chassis, batt and EV drivetrain) is being discussed. Heck some even import whole vehicles made by their Chinese subsidiaries (all of them have PRC subsidiaries) - like the Lincoln Nautilus.
As for BYD’s vertical integration, for a BYD factory in Canada, that’s subject to our import restrictions and local parts production. If we make a local battery supply chain and sufficiently increase BYD’s battery import duties, they’ll source locally. If we have spare capacity in our mechanical auto parts supply chains, we can increase the import duties on any BYD mechanical imports. Once the factory is here, we have control over all that. There’s no magic here, it’s just FDI. China built their auto supply chains to supply American and European automakers that built assembly factories in China. We’ll do the same if Chinese automakers build factories here. As I said previously, we’ve done this before with the Japanese manufacturers. It started with imports from Japan. Now they build here using a mix of local and foreign supply chains.
As far as I’m aware the migrant workers have been construction labour for building the factories, not permanent labour for assembling vehicles. The distinction is important because of the lifetime of the jobs and the availability of labour for each. For example Canada has a massive shortage of construction labour and there’s a lot of temporary migrants doing it. The kind of labour used and the labour conditions for either is subject to the domestic government’s policy. No one can import foreign labour unless the domestic government agrees to it. I’m aware of the issues in Brazil. Brazil took action and BYD cooperated. This reflects the labour situation in those countries and it shows that domestic control works. The labour conditions of a BYD factory in Canada would be different than the ones in Brazil. Just like the labour conditions are different between a Ford factory in Canada and one in Mexico. All of these companies abuse their workers to the fullest possible extent unless a union and/or government stands in their way. We have strong auto unions. GM just announced major cuts in one of their three plants in Canada so there’s gonna be close to a thousand trained people looking for work.