The 2023 BYD Dolphin is among several cheap electric vehicles made in China.
Finance Minister Chrystia Freeland says Canada is investigating whether to impose a surtax on imports of Chinese-made electric vehicles.
A 30-day consultation on the issue will begin July 2 to counter what Freeland says is a clear effort by Chinese companies to generate a global oversupply.
Canada's move comes weeks after both the United States and the European Commission announced plans to impose higher import tariffs on Chinese EVs this summer.
The consultation will seek input on what is driving China's surging EV exports, including unfair market practices as well as labour and environmental standards.
"We will not stand by while our workers are disadvantaged by non-market practices and a failure to abide by labour and environmental standards," Minister of Export Promotion, International Trade and Economic Development Mary Ng said.
In addition to a surtax, the consultation will consider whether Canada should change which cars are eligible for the federal EV purchase rebate worth up to $5,000 per vehicle.
It will also look at whether to expand investment restrictions in Canada.
The Global Automakers of Canada, which lobbies on behalf of all overseas automakers manufacturing and selling vehicles in Canada, said it supports the government’s announcement.
“Canada’s automotive industry has been a longstanding supporter of fair and rules-based trade policy,” the association said in a statement. “It’s important that the Government of Canada provides a level playing field for the sector and we look forward to participating in the consultation process.”
Brian Kingston of the Canadian Vehicle Manufacturers' Association, had similar thoughts.
"Huge progress has been made attracting investment and securing a role in the EV supply chain. We cannot take this for granted," he said. "Today's announcement is a step in the right direction. Canada must align with the U.S. as we build a North American supply chain."
Ontario Premier Doug Ford, who called for action just days before, also applauded the move.
"I’m glad to see the federal government is listening to our calls and taking quick action to protect Ontario and Canadian jobs from unfairly subsidized Chinese imports, particularly electric vehicles," he said on X, formerly Twitter. "Thousands of good-paying Ontario jobs and more than $43 billion in investments in our electric vehicle sector are at stake.
"Ontario workers expect their governments at all levels to work together to protect those jobs, rather than see them undermined by Chinese imports manufactured with dirty energy and poor labour standards.
"Moving forward, we need to work hand-in-hand with our partners in the U.S., taking a Team North America approach to stop artificially cheap Chinese imports from flooding our markets and protect the millions of American and Canadian workers who depend on our cross-border manufacturing supply chain."
Unifor, the union that represents about 23,000 autoworkers in Canada, called it "an important step in protecting Canada's auto and auto parts sectors."
"We look forward to participating in the consultations," Unifor President Lana Payne said. "We also look forward to playing our part in continuing to rebuild Canada's auto manufacturing capacity so that Canadian autoworkers, and Canadians at large, can benefit from a competitive and sustainable sector.
"Building the affordable clean vehicles of the future means building those vehicles here. The launch of this consultation into unfair Chinese EV imports is welcome and necessary news."
— The Canadian Press and Greg Layson of Automotive News Canada contributed to this report.
