Murky view on EV tariffs from canola fields

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This article was published 14/09/2024 (567 days ago), so information in it may no longer be current.

My brother and I both live in rural Manitoba, where owning a vehicle is pretty much a necessity.

He drives an electric vehicle. I drive a decade-old North American SUV that consumes about eight litres of gas per 100 kilometres (if I’m going downhill with the wind behind me).

He often offers to drive when we go out together and I offer to chip in on the gas. (Note: after the first couple of times, that line gets a bit old.)

His decision to stop burning fossil fuel in his travels undoubtedly benefits the environment. With the amount of driving he does, the money he saves on gas softens the sticker shock of buying one of these vehicles.

In my defence, however, even though I drive a gas guzzler by comparison, I don’t drive very much and I don’t go far when I do. I work from a home office, which also saves on gas.

It’s virtually impossible for me to pencil out a case for spending what it costs to buy a new EV in Canada these days when my vehicle sits in the garage most of the time. I’m not saying it will never happen, but at the current price points, it’s not in this household’s budget anytime soon. I suspect I’m not alone.

Which is why Canada’s decision to link arms with the U.S. and European Union to impose prohibitive tariffs on Chinese-made EVs is puzzling to say the least for those of us who bought in to the premise climate change is not only real but a phenomenon that requires urgent action.

It also flies in the face of all rhetoric about free trade and how global competition drives innovation and efficiency.

The same government that wants us all to be driving electric cars by 2035 is artificially keeping domestic costs for those cars prohibitively high by blocking lower-priced competition. Some Chinese-made EVs can be purchased for around $14,000 versus a Canadian-built EV that costs 2.5 to four times that amount.

Granted, there are national and geopolitical factors in play that can’t be discounted.

China is a cut-throat competitor that doesn’t always play by the rules or adhere to the same human rights and environmental standards. But if that’s our stance, why aren’t we applying it to everything stamped “Made in China” in our lives?

Canada’s decision to mimic U.S. tariffs to avoid becoming a backdoor to the American market may be part of a ploy to stay below the radar during the hotly contested U.S. presidential election. Canada wasn’t mentioned once in the televised debate between the two candidates this week, which is arguably a good thing.

There is also the reality the federal government wants to protect its investments in growing the Canadian EV sector, as well as supporting the unionized workers in that industry. We don’t want to be throwing them under the proverbial EV bus by flooding the market with cheap competition, and not just because they have powerful lobbyists and they vote.

The same could be said for the petroleum sector, which brings us to the impact of this decision on my canola-farming neighbours.

Predictably, China has retaliated by launching a year-long anti-dumping probe into Canadian canola exports. There’s no evidence to suggest the sector is offside but, as we well know, that doesn’t necessarily mean it won’t get smacked.

Counterbalancing that, however, is canola growers also have a stake in slow playing the adoption of electric vehicles in Canada, perhaps one even bigger than the potential hurt caused by Chinese retaliation.

While China remains an important buyer, Canada’s domestic canola crushing capacity has grown substantially in recent years and much of that growth has been tied to biofuel production. An influx of cheap EV competition could disrupt that market.

The point of this first-person rambling is there are a lot of us out here thinking about how we can be part of the climate change solution or at least a smaller part of a big problem. But, ultimately, economics will drive the change — and the signals around that right now are mighty murky.

Laura Rance is executive editor, production content lead for Glacier FarmMedia. She can be reached at lrance@farmmedia.com