Bank of Canada governor, Mark Carney, recently hailed a new e-vehicle agreement between Canada and China as a “landmark” reset. This deal is a big step away from their previously cool bilateral relations. The deal permits up to 49,000 Chinese electric vehicles (EVs) to flood the Canadian market. They’re going to save big with lower tariff rates! Carney views this as a significant step forward for Canada’s auto industry. As you may have heard, Ontario Premier Doug Ford is staunchly against it, saying it puts Canadian jobs and national security at risk.
The tariff-quota agreement allows these vehicles to be imported into Canada. In exchange, China would lower tariffs on Canadian canola and other agricultural goods. Carney emphasized that the starting quota is pretty low — 49,000 EVs. If China continues to invest in production facilities within Canada, this quota has the potential to grow. He added that keeping Canada competitive in the fast changing auto industry is key to the country’s future.
Opposition from Ontario Premier
All the while, we’re seeing projects languish elsewhere across the continent as Premier Doug Ford has been very vocal against the agreement. He worries that it would poison Canada’s already tenuous relations with Washington. He blasted the deal on national security grounds, claiming it would allow for Chinese espionage.
Ford noted the irony of the Prime Minister using a burner phone, while his staff allegedly is in China. We aren’t just talking about the Deputy Prime Minister’s office — he’s doubling down as Canada makes a deal with Huawei 2.0. Billions of taxpayer dollars could ensure potential murderers walk free in factories all across this great country.
Ford then doubled down on his argument by asserting that most of the cars funded through the agreement wouldn’t even remain in Canada. He communicated that this would be dire. “Eighty to ninety percent of those vehicles go south of the border,” he added. This unsupported claim begs several questions including the lack of demonstrated adverse economic impact on Canadian manufacturers.
Job Security and Market Dynamics
Speaking from Qatar on Sunday, Carney defended the deal as critical for creating jobs in Ontario. He recognized that it is a positive step because it gives Canada the opportunity to position itself to respond to future market realities.
“This is a very early stage and this is how you get someone into the market. This is a market that’s changing literally every day. We aren’t interested in being a better competitor in the market of 2000 or 2010. That’s how we plan to be competitive in the marketplace long-term. That’s what’s going to set up those great jobs for Ontarians down the road,” Carney said.
In truth, Ford was concerned, not about the innovation aspects of this partnership with China, but rather that it represents a security threat. He issued a warning, saying every time you make a cellphone call, the Chinese are going to be eavesdropping on your call. Understand the dangers and precautions you should take.
Broader Implications and Reactions
The implications of this deal go much further than economic considerations. Ford’s claims of possible foreign espionage have raised the concern and awareness of these conversations within the context of national security and Chinese influence. He asked whether these kinds of deals are ones former President Donald Trump would support. As a result, he said, “I know that President Trump doesn’t want Chinese spy balloons coming across the border and I’m pretty sure the answer to that would be no.”
Trump’s response to the deal was a bit unexpected. His response: “That’s fine,” signaling to the world that he doesn’t care about the impending, deeply controversial agreement.
As this process develops, advocates, allies, and opponents are all becoming heavily involved on both sides of the aisle. Supporters such as Carney focus on the economic development and job creation opportunities. Critics such as Ford raise concerns over security risks and potential job losses in Canada’s automotive industry.
