Juno News - Chinese car plants coming to Canada？

00:00:00.000 For all the talk about fresh starts in relations between Canada and China, so far there is still

00:00:11.500 no deal to drop the tariffs between the two countries. They have agreed to hold more talks

00:00:17.220 on increasing Canadian exports of oil, gas, and uranium to China, but with one day left

00:00:23.820 in which the Canadian delegation will meet with President Xi, Chinese tariffs on Canadian

00:00:29.700 agricultural products remain in place, as do Canada's levies on Chinese EVs. This headline

00:00:36.580 in the National Post. No tariff relief yet as Carney re-ups old agreements with Chinese

00:00:43.580 government on energy and lumber. Now here is Natural Resources Minister Tim Hodgson. Let's

00:00:51.640 listen.

00:00:52.640 We signed eight agreements, as you all saw. I signed an MOU with Administrator Wang of

00:01:00.520 the NEA, and tomorrow I'll be over talking with him about how we take that to the next level.

00:01:06.640 Today I also signed an MOU with Minister Ni around the use of more Canadian wood in Chinese

00:01:13.520 construction.

00:01:14.520 Another thing up for discussion is the possibility of having China manufacture electric vehicles

00:01:21.400 in Canada. Here's Industry Minister Melanie Jolie.

00:01:25.400 Is Canada considering lowering its tariff on Chinese EVs, or welcoming more production

00:01:31.280 in Ontario of Chinese EVs to try and get China to lower its tariffs?

00:01:35.280 My team and I have been working on a new auto strategy, because our goal is to make sure

00:01:40.900 that we favour auto production in Canada. And so these are ongoing conversations, and that's

00:01:49.280 why we'll have more to say tomorrow. Minister, what was the purpose of your meeting with CATL today?

00:01:53.280 Do you want to see them more involved in the EV supply chain in Canada, or what was your

00:01:56.920 discussion with that company today?

00:01:59.160 These are exploratory discussions, but we are willing to see what is feasible. So we're

00:02:07.340 open for business when it comes to batteries.

00:02:09.160 So it's more about that side of CATL's business, the plant storage, as opposed to the EV battery

00:02:15.320 making storage.

00:02:16.320 We can look at both.

00:02:19.040 What could possibly go wrong? Plenty, according to a London-based global think tank. China

00:02:24.160 has a long history of human rights abuses, including operating slave labour camps. Margaret

00:02:29.840 McQuaig Johnston is with the China Strategic Risks Institute. She told CTV News China will

00:02:35.720 use its manufacturing muscle to drive a wedge between Canada and the United States.

00:02:41.040 So this would be an even bigger prize than dropping the tariff on EVs. And the reason is, China's 0.95

00:02:48.720 been looking for a foothold in North America for their manufacturing, and it would have the

00:02:54.640 added benefit for China of putting a wedge in between Canada and the US. They put, they 0.94

00:03:01.920 were able to persuade Brazil to have manufacturing there so that they could have a foothold in South

00:03:09.840 America. But what happened was they brought in forced labour from China and kept them in appalling 0.97

00:03:16.320 conditions, so that the government of Brazil had to stop the development of the factory there. And

00:03:26.160 they sued BYD, the company, for their very poor labour practices for $10 million, and they won that in

00:03:35.360 court. In addition, the EU has had to put minimum prices on EVs that are imported into the EU because

00:03:47.040 the prices are too low and are displacing not just local EVs, German and other EVs, but also conventional

00:03:56.800 vehicles. Is that what we're bringing into Canada? And not only is Canada opening the door to Chinese 1.00

00:04:03.840 auto manufacturing, it's also open to Chinese investment in the energy sector, including the

00:04:08.480 oil sands. And as far as China's long history of human rights abuses, Melanie Jolie says she's under

00:04:15.120 no illusions. Let's listen. Listen, we've been clear eyed. We're eyes wide open. We know this.

00:04:21.600 When we engage with China and we engage with businesses like Tim and I have been doing,

00:04:27.360 we put everything on the table to address these risks. Our guest today is Brian Kingston. He is

00:04:32.880 president and CEO of the Canadian Vehicle Manufacturers Association. Welcome, Brian.

00:04:37.840 Thanks. Well, I got to get your take on what's going on and what's coming out of both China and

00:04:44.240 Ontario, with the Premier of Ontario saying that if China wants to sell EVs in Canada without those

00:04:52.640 100% tariffs, that they should build those cars in Ontario. And then you have the industry minister,

00:04:57.920 Melanie Jolie, basically saying that she's in discussions with the Chinese to do basically

00:05:02.800 that. What's your reaction? It won't work and we shouldn't be entertaining this. There's a couple

00:05:08.800 of reasons. First of all, we're at a very sensitive juncture in our discussions with the Americans

00:05:13.840 towards the renewal of our trilateral trade agreement, KUSMA. We cannot risk our most important trade

00:05:21.040 relationship by any overture to improve relationships with the Chinese. Canada took the action it did on EVs 0.54

00:05:29.280 because we were working and aligning with the Americans, because there are clear challenges with

00:05:34.560 China. They have subsidized their industry to levels that are unheard of, $230 billion in government

00:05:42.400 subsidization. And now they're dumping these vehicles around the world. So we can't let them bring these

00:05:47.040 vehicles into market. The idea that they would invest here and build is also just wrong. Frankly,

00:05:53.120 the Chinese business model is based on low labour costs and weak environmental regulations. Neither

00:05:59.440 of those are going to fly in Canada. We operate unionized auto facilities that pay high wages with

00:06:05.600 pensions and benefits and companies have to live up to extremely strange environmental standards.

00:06:11.200 So this isn't going to happen. I don't think we should be even entertaining the discussion of

00:06:15.920 having the Chinese invest here. But, you know, time will tell if this is serious or not.

00:06:22.000 Well, it was certainly a big wake up call in Brazil when they did it. They basically invited the 1.00

00:06:28.080 Chinese over. They're part of the same economic group, the BRICS organization. And China did set up

00:06:35.520 there. And wow, it was terrible for the Brazilians. They got a close up view of how they treat workers,

00:06:43.040 bringing in workers from China. Of course, there is a long history of human rights abuses by China. They

00:06:50.000 have forced labour camps, even slave labour camps involving the Uyghurs and others.

00:06:55.760 This is a country with a very shady history of these types of operations. So the fact,

00:07:03.120 I'm with you in terms of the fact that what they want to even entertain, our government wants to

00:07:06.560 entertain this, not only our federal government, but our provincial government. I think that's

00:07:10.560 something that Canadians should really look long and hard before they do any such thing.

00:07:16.160 I completely agree. And, you know, I understand that in the current context with the U.S. doing

00:07:22.320 what it's doing on trade policy and putting tariffs on Canada, I understand that we need to

00:07:28.160 really try harder to diversify. That makes sense. But you cannot diversify with a partner country that

00:07:36.960 has a track record in history of being unreliable. It's not as though China lives up to its international

00:07:43.920 trade commitments and agreements. And we have example after example where China has used trade policy,

00:07:50.960 or worse, imprisoning Canadians to leverage countries that it disagrees with and to secure

00:07:56.880 outcomes. So, yes, it's a challenging time with the Americans. But to think that we're going to find

00:08:01.760 more stability by engaging with China, I think is a pretty dangerous road to go down. So, you know, 0.88

00:08:10.240 warming of relations, fine, but we got to be really careful here about how we engage. And, you know,

00:08:15.840 let's not forget that Chinese EVs, one of the key reasons for keeping them out wasn't just about the

00:08:20.560 economic environment and labor considerations. There is a cybersecurity risk. The U.S. has deemed these

00:08:26.880 vehicles be a national security risk because the information gathered could be going back to China.

00:08:32.480 So if the U.S. has that concern, I'm pretty confident that our federal government security

00:08:38.160 services would have the same concern as well. So the list goes on as to why we should not let this

00:08:43.600 happen. And again, I'm worried that we're even having to have this discussion.

00:08:47.920 And yet we are having it. And it's interesting because, of course, to your point earlier about the

00:08:52.560 economic business case for these vehicles, I mean, they produce them as cheaply as possible

00:08:57.840 in terms of labor costs. And so if they could produce, you know, a vehicle in China for whatever,

00:09:04.480 30,000, 35,000, you know, sell it for, you know, five or 10 grand, that all changes if they start paying

00:09:11.680 union rates in Canada. I mean, the cost of producing these vehicles in Canada is going to be a lot higher

00:09:18.560 than they are in China. They're not going to be selling these vehicles at the type of, you know,

00:09:24.960 levels that they would like to sell them. And what did we see in Europe now? The Europeans have been 0.71

00:09:30.720 forced to levy, you know, a tariff on some of these incoming Chinese vehicles because they're basically, 1.00

00:09:36.720 otherwise they'll just be dumped in Europe. So I don't know if this is going on, if this is some kind

00:09:44.160 of play by the prime minister trying to leverage China against the Americans. In other words,

00:09:52.960 to try and send the signal that, you know, if you don't play ball with us on tariffs,

00:09:57.680 you know, we'll jump into bed with the Chinese. I think it's a dangerous game. What do you think? 1.00

00:10:02.800 Yeah, I completely agree. It's an extremely dangerous game. And, you know, I just bring it right

00:10:07.360 back down to the economics of our Canadian economy. We happen to sit beside the wealthiest, most dynamic

00:10:17.120 economy in the world in the United States. And if you look at, you know, trade relationships are all

00:10:21.520 dictated by what's called the gravity model of trade. A country will trade with whatever country

00:10:26.800 is largest and closest. You can't break that. That's the way it works. That's how business is done.

00:10:32.720 So the idea that you could leverage China against the US and somehow increase your trade with China,

00:10:38.240 it's never going to happen. We will always be the largest trading partner with the United States of

00:10:43.440 America, no matter what's going on or what the challenges are that we're having in that relationship.

00:10:49.440 I also just think, just coming back to your point about, you know, the wages and the environmental

00:10:54.640 impact of this, you know, there's this really concerning group of environmentalists that have been

00:10:59.600 pushing for Chinese EVs in Canada purely on the basis of helping us achieve our federally mandated EV

00:11:06.480 targets. I find that really, really concerning because, you know, what you do effectively do is,

00:11:12.240 so you're going to offshore labor to companies that are paying about, you know, the average wage at a

00:11:17.520 Chinese facility is about $4 an hour. A uniform plant is 44. So you're taking advantage of that cheaper

00:11:25.920 labor and about 60% of Chinese electricity is still generated by coal. So you're going to offshore

00:11:32.080 our carbon emissions to China so that we can have these cheaper EVs dumped into our market.

00:11:37.120 I don't see how that works for anybody. It may help us achieve these arbitrary EV sales targets,

00:11:43.840 but you know, you reference Europe. Europe has lost 90,000 auto jobs over the past year and a half

00:11:48.800 because they were soft on China. They allowed the Chinese into the market and now they're having to

00:11:53.120 recalibrate because they've realized that was a mistake. So really, really concerning examples out

00:12:00.000 there of how not to do this. Canada has taken the right step. The 100% tariff is correct, but we have

00:12:05.200 to keep it in place. And yet the Chinese have levied their own tariffs on Canada. And so that's been

00:12:10.720 obviously, as you know, devastating for our agricultural sector as far as canola goes, seafood. And so

00:12:17.200 there must be some temptation on the part of Kearney to try and make a deal and ease up those tariffs,

00:12:26.320 those Chinese tariffs on us. But unfortunately, what I'm hearing from you, Brian, is that the cost is

00:12:31.760 way too high for our manufacturing sector and our workers in Canada. Far too high. And look, I am

00:12:39.280 very sympathetic to what our farmers are having to go through, canola farmers, seafood producers.

00:12:46.320 This is, you know, we should not accept what China is doing and accept that this has to be a deal, EVs

00:12:53.040 for canola access. China is very savvy in how they conduct their trade relations with other countries.

00:13:00.960 Why have they gone after canola and why have they gone after seafood? Because they're trying to take 0.69

00:13:05.600 advantage of regional divides in Canada and put maximum pressure on government. We cannot accept

00:13:12.720 that they can't be allowed to do that. And if we allow that exchange to occur, that trade-off,

00:13:18.080 we've played directly into their hands. I think it's also important to know too that,

00:13:22.960 you know, if you look at what it is that we buy from China, do we need Chinese EVs? No, we don't.

00:13:28.400 But China needs what we produce. And I think Canada needs to be a little more confident sometimes.

00:13:33.600 We literally have everything the world needs. We've got natural resources and more to come,

00:13:38.320 hopefully. We've got agri-food, seafood, fertilizer, you name it, all of these things

00:13:45.120 China critically needs. So I think we've got to be a bit more confident when we go into these 0.84

00:13:49.120 discussions because we don't need their EVs, but they definitely need what we're producing.

00:13:53.920 I know it's out of your wheelhouse, but there's talk of inviting Chinese investment in our oil sector,

00:14:00.160 for instance, like the oil sands. Do you have any issues with that one way or another?

00:14:04.880 Well, look, I think we went down that road, you know,

00:14:07.120 a few years back when you think back to Sinox, Nixon and some of those acquisitions. And I think

00:14:12.240 we took the right moves back then where we put in place very stringent rules around investment

00:14:17.200 requirements and screening. You know, do you want state owned corporations that are ultimately

00:14:22.880 controlled out of Beijing with control of our resources? I think it's pretty clear.

00:14:26.240 The answer is no. I mean, look, if the government has banned the use of TikTok,

00:14:31.520 a social media platform, do you think it would make sense then to have, you know,

00:14:36.240 Chinese companies investing in our natural resources or selling us highly connected vehicles?

00:14:41.520 I think not. So I just, you know, we've got to be really clear eyed about this. And I'd be very,

00:14:46.080 very careful about any overtures to allow additional investment into Canada.

00:14:50.560 And yet the USMCA slash KUSMA deal very much in doubt after recent comments by President Trump.

00:15:00.640 And so, I mean, what, how do you see this playing out in the, in the months ahead? Because as I

00:15:07.600 understand it, the president says he could either take or leave a deal with Canada. And if he decides

00:15:12.800 to walk away, then that's going to hurt manufacturing as well, isn't it?

00:15:19.120 Absolutely. It would be devastating. But look, I'm the ultimate optimist on this. I think, you know,

00:15:25.760 despite what you hear from the president, first of all, he is, he is a negotiator. And he does this

00:15:31.440 all the time to put negotiating partners, you know, off kilter. So he'll say things like this,

00:15:37.280 we don't want your cars, we don't need this trade deal. You can't take that to the bank. This is,

00:15:42.160 you know, we're just starting this process, we're going to be sitting down at the negotiating table

00:15:46.320 for months now. I remain an optimist for a simple reason. The relationship we have with the US works

00:15:52.640 for America. And you're starting to see the US business community become more vocal about the

00:15:57.840 fact that they've got a lot of investments in Canada and Mexico. And they see no upside to tearing

00:16:03.920 up our existing agreements and ultimately then being exposed to tariffs on product that they send

00:16:09.520 into Canada and Mexico. So, you know, I just think because of the pure economics of this and the

00:16:14.160 commercial benefits it creates for America, we'll find a landing zone here and we keep this agreement

00:16:20.400 in place. And look, if you look at just pure auto, we are the biggest market for US vehicle exports.

00:16:25.600 And it's not even close. The Americans send more cars to us than they do to China, Mexico,

00:16:30.320 Germany combined. And in particular, they send pickup trucks. You're not going to find many

00:16:34.720 pickup trucks in any other market around the world, but Canadians love pickup trucks

00:16:39.600 because of our driving conditions, our large country and big rural population, you know,

00:16:47.520 all of these reasons. So this is a good relationship for US auto. And I think because of that, we will find

00:16:54.640 some sort of landing zone. It's probably not going to look like it did before, but there will be a deal.

00:17:00.320 We saw Stellantis make its move recently, moving its plant out of Brampton. It must be hard.

00:17:09.600 You're dealing with manufacturers who are looking to, you know, get into the best possible economic

00:17:15.920 environment as possible. And when you see something like that happen, it must be difficult. I mean,

00:17:22.080 what are you telling the manufacturing companies, the Ford Motor companies and the Stellantis of the world

00:17:29.520 with whom you have contact with? Can you tell us engage their mood right now as this tariff

00:17:36.800 conflict continues?

00:17:38.800 Yeah. I mean, look, this is a really difficult environment. The US has put an estimated $188

00:17:44.720 billion in tariff costs on US auto manufacturers, $188 billion. Imagine that. I mean,

00:17:50.960 this would be equivalent to the US government putting in place a 15 or 20% corporate tax hike.

00:17:57.520 It's unheard of. And so it's doing real damage to these companies, not just in Canada and Mexico,

00:18:03.440 but in the United States, because you're now in this bizarre scenario where it's actually more cost

00:18:08.960 effective to build a car in Europe or Japan or Korea and export it to the US than to build in the US,

00:18:15.280 because these companies are facing all of these tariffs on all of their inputs from aluminum

00:18:19.360 through to finished vehicles. So very costly environment right now. But good news is auto is

00:18:25.280 a long lead time industry. If you look at Ford GM and Stellantis, they've been in Canada for over 100

00:18:30.560 years. Nobody makes a rash or rash decision on the basis of one change in trade policy that may not be

00:18:39.440 long term. So companies are looking at this with a long term lens, trying to figure out ultimately,

00:18:44.800 what's the best way to keep themselves competitive in this market. And I'm confident we're going to

00:18:49.760 continue to have an industry for another 100 years. But there's no sugarcoating it. This is a very high

00:18:57.040 cost period for these companies. And it's all self-inflicted by the US government, which is rather

00:19:02.800 rather bizarre. Have you spoken with Rebier Ford about what he said regarding Chinese EVs? Have you

00:19:11.120 had any chat with him about that? Yeah, look, we engage very regularly with the Premier and with

00:19:17.200 Ontario. And the Premier has been one of the strongest voices on the need to keep the tariff

00:19:22.480 in place on Chinese EVs. So he understands. It was a bit of a new comment to hear the idea around having

00:19:30.720 them come and invest here. Although I saw his comments the other day, and I think he's backed

00:19:36.240 off that a little bit. So I think he understands very well that Chinese EVs in any form in this

00:19:43.600 country or in Ontario is a bad call. And he's been a big champion for this industry. Because of course,

00:19:50.240 you know, yes, the auto industry has investments across Canada, but the heart of the industry truly

00:19:55.680 is Ontario and Southwestern Ontario in particular. Brian, thank you so much for coming on the show.

00:20:01.280 We really appreciate it. Thanks for having me. Brian Kingston. And that is it for this edition

00:20:07.200 of Straight Up. Appreciate you tuning in, my friends. Let's do it again soon, shall we? Bye-bye for now.

Juno News - January 16, 2026

Chinese car plants coming to Canada？

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