Alberta Premier Danielle Smith says China is exploiting Canadian divisions, retaliating against Ottawa’s electric vehicle tariffs largely intended to protect Eastern-based industry, by slapping tariffs on canola and other Western-produced products.
“I can only interpret that as the Chinese understand the divisions in our country. They understand that if you’re going to retaliate and create maximum pressure, you do it by pitting one region against the other,” Smith said at a press conference on May 16, in response to a question by The Epoch Times about China’s strategy.
The premier said Ottawa’s tariffs on Chinese electric vehicles last year in lockstep with the United States’ have led to a targeted move by Beijing, which is imposing a series of levies on food exports from Western provinces.
“The unfortunate consequence of that is that we now have a 100 percent tariff on vehicles nobody really wants in Canada—because I don’t think there’s a massive amount of demand for Chinese electric vehicles—to protect an electric vehicle industry in Canada that doesn’t yet exist because those investments haven’t been made,” she said.
“And the consequence of that is the Chinese retaliation has been against the products everybody does want, which is pork and canola.”
China’s retaliatory tariffs, which took effect on March 20, included 100 percent duties on Canadian canola oil, oil cakes, and pea imports, and 25 percent levies on Canadian seafood and pork.
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Canada imposed 100 percent tariffs on Chinese EVs and 25 percent tariffs on Chinese steel and aluminum products starting in October 2024.
Smith said the impact of Chinese tariffs on Canada’s agricultural communities is “massive,” adding that she and the premiers of Saskatchewan and Manitoba have been calling on Ottawa to work with them to develop a viable response.
The federal government had called China’s levies “unjustified,” and had vowed to “stand shoulder-to-shoulder” with the farmers and fishers affected by the measures—while at the same time maintaining that tariffs on Chinese electric vehicles would stay.
“We would never be a back door to cheap Chinese vehicle[s] which are overly subsidized and where they don’t respect labour law and environmental laws,” then-Industry Minister François-Philippe Champagne said in March, following Beijing’s retaliation.
Demand for electric vehicles in Canada has been declining. According to Statistics Canada’s recent data, EV sales in March dropped 44 percent compared to the same month last year.
A drop in sales has also led to some auto manufacturers slowing down their EV investments. On May 13, Honda Canada announced it would delay a $15 billion investment project for electric vehicle production in Ontario. In April, GM Canada paused production at an EV plant in Ingersoll, Ont., due to low demand for its EV offerings. The company laid off around 500 employees.
EV and EV battery plants in Canada are primarily based in Ontario and Quebec.
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Smith noted Canada’s relationship with China has not returned to the state it was in before the arbitrary detention of Canadian citizens Michael Kovrig and Michael Spavor by Beijing, which spanned from 2018 to 2021.
The two men were detained on espionage charges just days after Canada arrested Huawei executive Meng Wanzhou over a U.S. extradition warrant for fraud. Both spent nearly three years in Chinese prisons before being released in a deal that saw Meng allowed to return to China.
Appearing on CTV News’ Power Play on May 15, Kovrig said China is “not a friendly country,” and that any attempt to reset the relationship with Beijing is not only “not feasible,” but will also invite “a cold shower.”
Kovrig also warned that Beijing is seeking to dominate global supply chains by controlling critical minerals and advanced technology, including artificial intelligence (AI).
In the May 16 press conference, Smith said the United States is “very worried about China winning the AI data race.” She added that Canada can play a role in supplying the electricity its southern neighbour needs to achieve dominance in that domain.
“[The Americans] understand that if China gets the dominance over North America, it’s going to really change the way the world operates,” she said.
The premier suggested that besides the “AI battle,” the “economic battle” the United States is engaging in with China currently will influence how Ottawa shapes its relationships with Washington and Beijing in the future.
“I think that the Americans, as part of a condition to getting access to their market, are increasingly going to be asking for restrictions on how much trade we do with China,” she said, citing the steel and aluminum sector and the auto industry as examples.
Smith said her government is seeking to better understand the evolving dynamics of Canada-U.S. relations through her province’s New North America Initiative research program, launched on May 16.
“This is a different kind of conversation than we might have had a year ago, but it’s a very important one for us to have to understand how do we maintain the preferential relationship with the United States, still find new markets, but … find the balance so that we don’t have to sacrifice one over the other.”
Carolina Avendano and Olivia Gomm contributed to this report.
