Juno News - January 16, 2026Chinese car plants coming to Canada？
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Summary
The Canadian government and Chinese President Xi Jinping have reached a deal on increasing Canadian exports of oil, gas, and uranium to China, but with one day left in which the Canadian delegation will meet with President Xi, Chinese tariffs on Canadian agricultural products remain in place, as do Canada's levies on Chinese EVs.
Transcript
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For all the talk about fresh starts in relations between Canada and China, so far there is still
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no deal to drop the tariffs between the two countries. They have agreed to hold more talks
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on increasing Canadian exports of oil, gas, and uranium to China, but with one day left
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in which the Canadian delegation will meet with President Xi, Chinese tariffs on Canadian
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agricultural products remain in place, as do Canada's levies on Chinese EVs. This headline
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in the National Post. No tariff relief yet as Carney re-ups old agreements with Chinese
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government on energy and lumber. Now here is Natural Resources Minister Tim Hodgson. Let's
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We signed eight agreements, as you all saw. I signed an MOU with Administrator Wang of
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the NEA, and tomorrow I'll be over talking with him about how we take that to the next level.
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Today I also signed an MOU with Minister Ni around the use of more Canadian wood in Chinese
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Another thing up for discussion is the possibility of having China manufacture electric vehicles
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in Canada. Here's Industry Minister Melanie Jolie.
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Is Canada considering lowering its tariff on Chinese EVs, or welcoming more production
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in Ontario of Chinese EVs to try and get China to lower its tariffs?
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My team and I have been working on a new auto strategy, because our goal is to make sure
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that we favour auto production in Canada. And so these are ongoing conversations, and that's
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why we'll have more to say tomorrow. Minister, what was the purpose of your meeting with CATL today?
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Do you want to see them more involved in the EV supply chain in Canada, or what was your
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These are exploratory discussions, but we are willing to see what is feasible. So we're
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So it's more about that side of CATL's business, the plant storage, as opposed to the EV battery
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What could possibly go wrong? Plenty, according to a London-based global think tank. China
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has a long history of human rights abuses, including operating slave labour camps. Margaret
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McQuaig Johnston is with the China Strategic Risks Institute. She told CTV News China will
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use its manufacturing muscle to drive a wedge between Canada and the United States.
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So this would be an even bigger prize than dropping the tariff on EVs. And the reason is, China's
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been looking for a foothold in North America for their manufacturing, and it would have the
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added benefit for China of putting a wedge in between Canada and the US. They put, they
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were able to persuade Brazil to have manufacturing there so that they could have a foothold in South
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America. But what happened was they brought in forced labour from China and kept them in appalling
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conditions, so that the government of Brazil had to stop the development of the factory there. And
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they sued BYD, the company, for their very poor labour practices for $10 million, and they won that in
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court. In addition, the EU has had to put minimum prices on EVs that are imported into the EU because
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the prices are too low and are displacing not just local EVs, German and other EVs, but also conventional
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vehicles. Is that what we're bringing into Canada? And not only is Canada opening the door to Chinese
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auto manufacturing, it's also open to Chinese investment in the energy sector, including the
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oil sands. And as far as China's long history of human rights abuses, Melanie Jolie says she's under
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no illusions. Let's listen. Listen, we've been clear eyed. We're eyes wide open. We know this.
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When we engage with China and we engage with businesses like Tim and I have been doing,
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we put everything on the table to address these risks. Our guest today is Brian Kingston. He is
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president and CEO of the Canadian Vehicle Manufacturers Association. Welcome, Brian.
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Thanks. Well, I got to get your take on what's going on and what's coming out of both China and
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Ontario, with the Premier of Ontario saying that if China wants to sell EVs in Canada without those
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100% tariffs, that they should build those cars in Ontario. And then you have the industry minister,
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Melanie Jolie, basically saying that she's in discussions with the Chinese to do basically
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that. What's your reaction? It won't work and we shouldn't be entertaining this. There's a couple
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of reasons. First of all, we're at a very sensitive juncture in our discussions with the Americans
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towards the renewal of our trilateral trade agreement, KUSMA. We cannot risk our most important trade
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relationship by any overture to improve relationships with the Chinese. Canada took the action it did on EVs
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because we were working and aligning with the Americans, because there are clear challenges with
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China. They have subsidized their industry to levels that are unheard of, $230 billion in government
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subsidization. And now they're dumping these vehicles around the world. So we can't let them bring these
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vehicles into market. The idea that they would invest here and build is also just wrong. Frankly,
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the Chinese business model is based on low labour costs and weak environmental regulations. Neither
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of those are going to fly in Canada. We operate unionized auto facilities that pay high wages with
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pensions and benefits and companies have to live up to extremely strange environmental standards.
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So this isn't going to happen. I don't think we should be even entertaining the discussion of
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having the Chinese invest here. But, you know, time will tell if this is serious or not.
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Well, it was certainly a big wake up call in Brazil when they did it. They basically invited the
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Chinese over. They're part of the same economic group, the BRICS organization. And China did set up
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there. And wow, it was terrible for the Brazilians. They got a close up view of how they treat workers,
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bringing in workers from China. Of course, there is a long history of human rights abuses by China. They
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have forced labour camps, even slave labour camps involving the Uyghurs and others.
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This is a country with a very shady history of these types of operations. So the fact,
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I'm with you in terms of the fact that what they want to even entertain, our government wants to
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entertain this, not only our federal government, but our provincial government. I think that's
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something that Canadians should really look long and hard before they do any such thing.
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I completely agree. And, you know, I understand that in the current context with the U.S. doing
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what it's doing on trade policy and putting tariffs on Canada, I understand that we need to
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really try harder to diversify. That makes sense. But you cannot diversify with a partner country that
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has a track record in history of being unreliable. It's not as though China lives up to its international
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trade commitments and agreements. And we have example after example where China has used trade policy,
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or worse, imprisoning Canadians to leverage countries that it disagrees with and to secure
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outcomes. So, yes, it's a challenging time with the Americans. But to think that we're going to find
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more stability by engaging with China, I think is a pretty dangerous road to go down. So, you know,
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warming of relations, fine, but we got to be really careful here about how we engage. And, you know,
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let's not forget that Chinese EVs, one of the key reasons for keeping them out wasn't just about the
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economic environment and labor considerations. There is a cybersecurity risk. The U.S. has deemed these
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vehicles be a national security risk because the information gathered could be going back to China.
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So if the U.S. has that concern, I'm pretty confident that our federal government security
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services would have the same concern as well. So the list goes on as to why we should not let this
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happen. And again, I'm worried that we're even having to have this discussion.
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And yet we are having it. And it's interesting because, of course, to your point earlier about the
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economic business case for these vehicles, I mean, they produce them as cheaply as possible
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in terms of labor costs. And so if they could produce, you know, a vehicle in China for whatever,
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30,000, 35,000, you know, sell it for, you know, five or 10 grand, that all changes if they start paying
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union rates in Canada. I mean, the cost of producing these vehicles in Canada is going to be a lot higher
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than they are in China. They're not going to be selling these vehicles at the type of, you know,
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levels that they would like to sell them. And what did we see in Europe now? The Europeans have been
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forced to levy, you know, a tariff on some of these incoming Chinese vehicles because they're basically,
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otherwise they'll just be dumped in Europe. So I don't know if this is going on, if this is some kind
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of play by the prime minister trying to leverage China against the Americans. In other words,
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to try and send the signal that, you know, if you don't play ball with us on tariffs,
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you know, we'll jump into bed with the Chinese. I think it's a dangerous game. What do you think?
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Yeah, I completely agree. It's an extremely dangerous game. And, you know, I just bring it right
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back down to the economics of our Canadian economy. We happen to sit beside the wealthiest, most dynamic
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economy in the world in the United States. And if you look at, you know, trade relationships are all
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dictated by what's called the gravity model of trade. A country will trade with whatever country
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is largest and closest. You can't break that. That's the way it works. That's how business is done.
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So the idea that you could leverage China against the US and somehow increase your trade with China,
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it's never going to happen. We will always be the largest trading partner with the United States of
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America, no matter what's going on or what the challenges are that we're having in that relationship.
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I also just think, just coming back to your point about, you know, the wages and the environmental
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impact of this, you know, there's this really concerning group of environmentalists that have been
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pushing for Chinese EVs in Canada purely on the basis of helping us achieve our federally mandated EV
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targets. I find that really, really concerning because, you know, what you do effectively do is,
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so you're going to offshore labor to companies that are paying about, you know, the average wage at a
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Chinese facility is about $4 an hour. A uniform plant is 44. So you're taking advantage of that cheaper
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labor and about 60% of Chinese electricity is still generated by coal. So you're going to offshore
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our carbon emissions to China so that we can have these cheaper EVs dumped into our market.
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I don't see how that works for anybody. It may help us achieve these arbitrary EV sales targets,
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but you know, you reference Europe. Europe has lost 90,000 auto jobs over the past year and a half
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because they were soft on China. They allowed the Chinese into the market and now they're having to
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recalibrate because they've realized that was a mistake. So really, really concerning examples out
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there of how not to do this. Canada has taken the right step. The 100% tariff is correct, but we have
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to keep it in place. And yet the Chinese have levied their own tariffs on Canada. And so that's been
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obviously, as you know, devastating for our agricultural sector as far as canola goes, seafood. And so
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there must be some temptation on the part of Kearney to try and make a deal and ease up those tariffs,
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those Chinese tariffs on us. But unfortunately, what I'm hearing from you, Brian, is that the cost is
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way too high for our manufacturing sector and our workers in Canada. Far too high. And look, I am
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very sympathetic to what our farmers are having to go through, canola farmers, seafood producers.
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This is, you know, we should not accept what China is doing and accept that this has to be a deal, EVs
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for canola access. China is very savvy in how they conduct their trade relations with other countries.
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Why have they gone after canola and why have they gone after seafood? Because they're trying to take
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advantage of regional divides in Canada and put maximum pressure on government. We cannot accept
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that they can't be allowed to do that. And if we allow that exchange to occur, that trade-off,
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we've played directly into their hands. I think it's also important to know too that,
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you know, if you look at what it is that we buy from China, do we need Chinese EVs? No, we don't.
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But China needs what we produce. And I think Canada needs to be a little more confident sometimes.
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We literally have everything the world needs. We've got natural resources and more to come,
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hopefully. We've got agri-food, seafood, fertilizer, you name it, all of these things
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China critically needs. So I think we've got to be a bit more confident when we go into these
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discussions because we don't need their EVs, but they definitely need what we're producing.
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I know it's out of your wheelhouse, but there's talk of inviting Chinese investment in our oil sector,
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for instance, like the oil sands. Do you have any issues with that one way or another?
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Well, look, I think we went down that road, you know,
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a few years back when you think back to Sinox, Nixon and some of those acquisitions. And I think
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we took the right moves back then where we put in place very stringent rules around investment
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requirements and screening. You know, do you want state owned corporations that are ultimately
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controlled out of Beijing with control of our resources? I think it's pretty clear.
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The answer is no. I mean, look, if the government has banned the use of TikTok,
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a social media platform, do you think it would make sense then to have, you know,
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Chinese companies investing in our natural resources or selling us highly connected vehicles?
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I think not. So I just, you know, we've got to be really clear eyed about this. And I'd be very,
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very careful about any overtures to allow additional investment into Canada.
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And yet the USMCA slash KUSMA deal very much in doubt after recent comments by President Trump.
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And so, I mean, what, how do you see this playing out in the, in the months ahead? Because as I
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understand it, the president says he could either take or leave a deal with Canada. And if he decides
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to walk away, then that's going to hurt manufacturing as well, isn't it?
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Absolutely. It would be devastating. But look, I'm the ultimate optimist on this. I think, you know,
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despite what you hear from the president, first of all, he is, he is a negotiator. And he does this
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all the time to put negotiating partners, you know, off kilter. So he'll say things like this,
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we don't want your cars, we don't need this trade deal. You can't take that to the bank. This is,
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you know, we're just starting this process, we're going to be sitting down at the negotiating table
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for months now. I remain an optimist for a simple reason. The relationship we have with the US works
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for America. And you're starting to see the US business community become more vocal about the
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fact that they've got a lot of investments in Canada and Mexico. And they see no upside to tearing
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up our existing agreements and ultimately then being exposed to tariffs on product that they send
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into Canada and Mexico. So, you know, I just think because of the pure economics of this and the
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commercial benefits it creates for America, we'll find a landing zone here and we keep this agreement
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in place. And look, if you look at just pure auto, we are the biggest market for US vehicle exports.
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And it's not even close. The Americans send more cars to us than they do to China, Mexico,
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Germany combined. And in particular, they send pickup trucks. You're not going to find many
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pickup trucks in any other market around the world, but Canadians love pickup trucks
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because of our driving conditions, our large country and big rural population, you know,
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all of these reasons. So this is a good relationship for US auto. And I think because of that, we will find
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some sort of landing zone. It's probably not going to look like it did before, but there will be a deal.
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We saw Stellantis make its move recently, moving its plant out of Brampton. It must be hard.
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You're dealing with manufacturers who are looking to, you know, get into the best possible economic
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environment as possible. And when you see something like that happen, it must be difficult. I mean,
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what are you telling the manufacturing companies, the Ford Motor companies and the Stellantis of the world
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with whom you have contact with? Can you tell us engage their mood right now as this tariff
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Yeah. I mean, look, this is a really difficult environment. The US has put an estimated $188
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billion in tariff costs on US auto manufacturers, $188 billion. Imagine that. I mean,
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this would be equivalent to the US government putting in place a 15 or 20% corporate tax hike.
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It's unheard of. And so it's doing real damage to these companies, not just in Canada and Mexico,
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but in the United States, because you're now in this bizarre scenario where it's actually more cost
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effective to build a car in Europe or Japan or Korea and export it to the US than to build in the US,
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because these companies are facing all of these tariffs on all of their inputs from aluminum
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through to finished vehicles. So very costly environment right now. But good news is auto is
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a long lead time industry. If you look at Ford GM and Stellantis, they've been in Canada for over 100
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years. Nobody makes a rash or rash decision on the basis of one change in trade policy that may not be
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long term. So companies are looking at this with a long term lens, trying to figure out ultimately,
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what's the best way to keep themselves competitive in this market. And I'm confident we're going to
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continue to have an industry for another 100 years. But there's no sugarcoating it. This is a very high
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cost period for these companies. And it's all self-inflicted by the US government, which is rather
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rather bizarre. Have you spoken with Rebier Ford about what he said regarding Chinese EVs? Have you
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had any chat with him about that? Yeah, look, we engage very regularly with the Premier and with
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Ontario. And the Premier has been one of the strongest voices on the need to keep the tariff
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in place on Chinese EVs. So he understands. It was a bit of a new comment to hear the idea around having
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them come and invest here. Although I saw his comments the other day, and I think he's backed
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off that a little bit. So I think he understands very well that Chinese EVs in any form in this
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country or in Ontario is a bad call. And he's been a big champion for this industry. Because of course,
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you know, yes, the auto industry has investments across Canada, but the heart of the industry truly
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is Ontario and Southwestern Ontario in particular. Brian, thank you so much for coming on the show.
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We really appreciate it. Thanks for having me. Brian Kingston. And that is it for this edition
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of Straight Up. Appreciate you tuning in, my friends. Let's do it again soon, shall we? Bye-bye for now.