Canada’s EV Tariffs: A Policy Protecting Promises, Not Products

In October 2024, Canada imposed a sweeping 100% surtax on Chinese electric vehicles (EVs), aligning with U.S. trade policy and citing the need to protect Canadian jobs and industrial investments.

But as Lark Scientific Researcher Denis Koshelev reveals in his in-depth article, Canada’s EV Tariffs: Protecting a Phantom Industry at a Real Cost, the reality behind these tariffs is far more complex and concerning.

What the EV Tariffs Claim to Protect in Canada

The government’s official justification for the tariffs is to defend Canada’s EV manufacturing sector from China’s state-backed automakers, who benefit from heavy subsidies and lower environmental standards. Since 2020, Canada has announced over $46 billion in EV-related foreign investment commitments.

Tariffs were imposed to:

• Counter “unfair” Chinese trade practices

• Safeguard future jobs in EV battery and vehicle manufacturing

• Support Canada’s climate goals under the ZEV mandate (100% zero-emission vehicle sales by 2035)

  
  

However, most of these investments are still in development, and very few EVs are currently manufactured in Canada.

A Phantom Industry?

Canada’s EV assembly landscape is sparse:

• Only one full-scale EV plant exists (GM’s CAMI facility in Ontario)

• Flagship projects (like Honda’s $15B Ontario initiative) have been postponed

• Most announced jobs are in battery production or future assembly, not putting current employment at risk

  
  

Meanwhile, Chinese EV brands like BYD are offering high-quality, affordable vehicles that could help lower Canadian emissions and prices for consumers.

Policy Contradictions

The tariffs are supposed to protect Canadian industry, but in reality:

• Foreign firms like Volkswagen and Stellantis receive untaxed public subsidies, while Canadian companies like Electrovaya operate without equivalent support

• Canadian consumers lose access to affordable EVs, such as BYD’s Seagull (CAD $14,600 pre-tariff)

• EV sales dropped sharply in 2025 after federal rebates ended, highlighting extreme price sensitivity in the market

  
  

“We’re blocking low-cost EVs while mandating their purchase,” says Lark Scientific’s Executive Director, Axel Doerwald. “That’s not policy — that’s contradiction.”

Collateral Damage and Missed Opportunity

China responded with retaliatory tariffs on Canadian canola, pork, seafood, and peas, real export sectors that generate billions annually. Unlike the largely aspirational EV industry, these industries are tangible and economically vital.

Europe has taken a more measured approach, applying manufacturer-specific tariffs based on investigations. Canada’s blanket 100% tariff lacks that nuance and may do more harm than good.

The Bottom Line

Canada’s EV tariff policy is built more on geopolitics than economic or environmental logic. By shielding an industry that barely exists while making EVs more expensive and risking major export markets, the policy risks undermining the very goals it claims to support.

We are protecting the future at the expense of the present and may lose both in the process.