Western Canadians paying to protect auto jobs

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This article was published 01/04/2025 (247 days ago), so information in it may no longer be current.

Canadians living in other regions of the nation often struggle to understand the sense of alienation that exists in parts of Western Canada. The situation that is currently unfolding on the Prairies should resolve that confusion.

U.S. president Donald Trump has threatened a 25 per cent tariff on all Canadian goods, commodities and services, with a rate of 10 per cent for energy commodities. Unless there is another “pause” in the implementation of those charges, they will take effect tomorrow.

If that happens, they will follow China’s imposition last month of additional 100 per cent tariffs on Canadian canola oil, oil cakes and peas imported into that nation, along with additional 25 per cent tariffs on pork and aquatic products.

Chinese tariffs are already hurting Western Canada’s agricultural sector. If the threatened U.S. tariffs are implemented, whether it be tomorrow or sometime in the future, the situation will further worsen for farmers across the Prairies.

They will suddenly be burdened with higher costs, while facing the prospect of lower prices for their commodities. That will threaten not just the viability of their respective operations but, more generally, Canada’s food security and economy.

That’s no exaggeration. Canada’s agriculture and agri-food sector employs more than 2.3 million individuals, and contributes more than $150 billion annually to the national gross domestic product — more than seven per cent of GDP.

The canola industry alone adds approximately $44 billion annually to the economy, but the new Chinese tariffs and proposed U.S. tariffs jeopardize that contribution by effectively closing access to our two largest foreign markets, making it virtually impossible for most canola farmers to turn a profit.

Beyond that, billions of dollars in planned new investments related to the canola industry are now on hold because of the trade instability we are experiencing. That’s costing jobs in multiple sectors of the prairies economy, and is depriving governments of millions of dollars in tax revenue.

It’s a tough situation, but many of Canada’s 40,000 canola farmers argue it was avoidable.

China’s new tariffs were imposed in retaliation for Canada’s earlier decision to impose 100 per cent tariffs on Chinese-made electric vehicles, along with a 25 per cent tax on aluminum and steel products. It was part of a broader North American strategy to encourage the development of an electric vehicle manufacturing industry on this continent.

That strategy has included billions of dollars in subsidies for foreign auto manufacturers to build factories in central Canada.

Given that reality, canola farmers feel they are paying a heavy price for decisions made in Ottawa to protect and/or create jobs in central Canada — and this isn’t the first time they have been penalized for federal government’s decisions. In 2019, they were hammered with similar tariffs from China in retaliation for Canada’s detention of Chinese telecom executive Meng Wanzhou, at the request of the U.S. government.

To make matters worse, farmers point to the fact the federal government recently committed $2-billion to protect Canada’s auto industry from Trump’s tariffs, but has simply announced the doubling of the payment cap for the Agristability program, which the majority of canola farmers are not even enrolled in.

They argue that the government’s anti-China tariffs to protect and grow the Canadian auto industry may now be pointless, given the 25 per cent tariffs imposed by the Trump administration last week on non-American-made cars and parts.

They have also noted that the political parties’ leaders have so far devoted much of their election attention to eastern and central Canada, and have been virtually silent on issues facing the Western Canadian ag industry.

Western Canadians are often derided by the rest of Canada when they complain of inequality and unfairness, but they have a valid point in the context of the canola crisis they are now experiencing. The federal government has placed a higher priority on protecting and creating auto sector jobs in Quebec and southern Ontario than on protecting the millions of Prairie jobs that depend on ag industry.

They knew the new tariffs on China would provoke a hostile reaction by that nation, and Western Canada is paying a costly penalty for that decision. Perhaps it is time to reconsider — and maybe rescind — the tariffs that provoked that reaction.

Deveryn Ross is a political commentator living in Brandon.

deverynrossletters@gmail.com

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