REGINA - The ongoing tariff situation impacting Canada took another major turn this past week when China announced a new 75.8 per cent tariff on canola seed.
This is in addition to the previous 100 per cent tariff that was imposed by China earlier on canola seed and meal. The timing of this latest tariff could not be any worse, as the "Food Professor" Dr. Sylvain Charlebois, Director of the Agri-Food Analytics Lab at Dalhousie University and visiting scholar at McGill University, explained.
"Given that it is August, farmers can't just pivot and grow something else," Charlebois said in speaking to SaskToday this past week.
"It really is happening at the worst time, because many farmers will either have to absorb the extra costs or find a new market but China is the number two market of Canadian canola in the world so it's hard to replace a market like that."
Charlebois said that the imposition of China tariffs on canola, as well as on lobster and pork, was "predictable" with Canada imposing 100 per cent tariffs on China EVs.
"So we were expecting some sort of reaction by the Chinese government, and that's exactly what happened many months ago. But now the Chinese government has published or has claimed that they've investigated Canada and they're now accusing Canada of dumping canola onto the Chinese market. So now they're using that as justification to increase the level of tariffs of up to 75%, I believe, or 75.8% which is really significant, unfortunately, for farmers."
When asked if there was any justification for taking this kind of an extreme measure, Charlebois said it was hard to explain "because, well, first of all, grains are negotiated on the markets and dumping occurs when a country will sell a commodity at a lower price of production than the cost of production domestically, which obviously is not the case for Canada.
"And I highly doubt that Canadian companies, Canadian farmers are actually selling canola to China below cost. That's impossible. And when you think about government intervention, well, that's exactly what canola growers are expecting from Ottawa. They haven't really gotten a whole lot of attention by Ottawa, which is why it's very, very frustrating to hear China claiming that our canola growers have received some financial support or have actually have gotten a support of favourable policies to help the sector, which really hasn't been the case. In fact, that's why we're in this conundrum right now having to deal with China and high tariffs because of our policy around EVs."
Is removing the policy on EVs, then, the simple fix? Charlebois seems to think so.
A simple fix?
"I think the simple fix is pretty obvious to me. I mean, when you look at the market in China, it's amazingly competitive," said Charlebois.
"And I don't understand why the Canadian government would want to prevent Canadians from having access to that highly competitive market. Those products are good. And frankly, EVs in Canada are unaffordable for a lot of people. And you could see China come into the game market with very, very affordable EVs for cars of under $30,000. There are no EVs under $30,000 in Canada. So you would actually probably develop a new market.
"So you're not basically protecting an industry that exists. And when you look at the EV strategy in Canada, it is when you look at all of the problems that we've seen with different partners, it is a house of cards, pure fantasy. And the canola industry is real. Populated by hardworking farmers and people across the supply chain. And it's a $42 billion industry. So it's worth supporting and it's worth protecting as much as possible."
Charlebois noted canola is "important for the prairies and in particular for Saskatchewan."
"I used to live in Saskatchewan, I can tell you, I know exactly. And the Chinese are very smart people. They understand how to hurt countries when they're at odds with them."
Charlebois said China is using canola because "canola is part of the Canadian brand. If you go to China, they will associate the country with canola, Canada oil. It was developed in Canada and it's been celebrated in Canada for many, many years. It's a high success story coming out of the prairies. And if you really want to attract some attention politically, you basically go after canola farmers. That's exactly what they're doing."
There have been some rumblings that Premier Scott Moe might lead a trade mission to China -- something Opposition Leader Carla Beck has publicly called for and which Moe himself mused about doing — in coordination with the Feds — at a news conference this past week. Charlebois seems of the belief it couldn't hurt.
"I think that this is something they need to address as soon as possible. If they can find someone who's not on vacation, that is."
Charlebois was referring to Prime Minister Mark Carney and the Parliament of Canada. He had some strong opinions about what he was seeing — or rather, not seeing — out of Ottawa at the moment.
"Well, the Prime Minister sent the Parliament on vacation in June, and he shouldn't have, and now he's on vacation himself. And I'm not sure it's the right timing either. So I suggest that they should prioritize our economic interests nationally, and not just for Ontario. I mean, the EV decision never made sense. You're basically trying to protect Ontario and Quebec jobs over climate change. If you want to sell EVs for climate to actually save the planet, you want to make sure that that technology is as affordable as possible. Ottawa is doing the opposite.
"So that's one thing that never made sense to me. And two, the canola industry is amazingly important. And so I know that some people in the East see canola as a health risk, but most of these people are misinformed. If they look at the scientific literature, they will find that the virtues of canola are quite substantial. And there's a lot you can do with canola. And canola is a big part of a lot of people's diets. And it's a healthy choice."
He adds that canola oil is "one of the cheapest vegetable oils out there. And vegetable oil prices have been an issue for a very long time. So that's yet another reason why I think they should look into this."
China and the Chinese tariffs have taken a back seat in the past several months to the flurry of tariffs coming from President Donald Trump and the White House. When asked if he thought there ought to be more focus on what China's doing, Charlebois said "absolutely."
"There should be more focus on India as well," said Charlebois, referring to another country notorious for recent tariff disputes with Canada. He thinks maybe Canada is the one that ought to look in the mirror.
"I mean, we're at odds with many countries and all countries are talking to each other, but nobody's talking to us. Nobody wants to talk to us. So diplomatically, there's a pattern there. And I think it needs to be addressed as soon as possible.
"Because right now, a lot of people see Trump as a threat. And of course, his administration is a problem. But when you start seeing the number of countries (that) aren't willing to deal with Canada or are at odds with Canada and are applying tariffs against Canada, then you start seeing a pattern. It's not just about Trump. I think it's more about our own problem right here in Canada and how we deal with our geopolitical stance and where we feel we should stand there."
When asked if he thought Canada was being too protectionistic in its approach, Charlebois answered that he was convinced that Ottawa is "more concerned about their own image and getting votes and getting political support domestically, than actually solve problems internationally and become more significant as a agricultural powerhouse."
"Right now, I see zero evidence of a government wanting to make Canada a strong player internationally. I just don't see that. I just see a government, a federal government just looking for some domestic political support. And to do that, you often use fear. And that's exactly what's happening. And I would say that the Liberals have been very successful at that."
As for what it will take to get things resolved, Charlebois said first of all he wanted to see Parliament back.
"The last thing you want is to send Parliament out on vacation. You want them back. You want Parliament to be back. I mean, we have a Prime Minister leading a party, a minority government, minority governments. And so you need Parliament to move things along legitimately. And so that's the first step.
"Second step is to start talking to provinces and deal with with interprovincial issues. And I'm not sure they've tried, they've met, but I'm not sure anything was accomplished. They've celebrated the end of interprovincial trade barriers by July 1st. But when you talk to people out there, companies don't see any change. And so instead of just issuing press releases, you need to, you know, make sure that things do get done. But at the end of the day, something is going to have to be addressed with the EV situation, because right now it's holding Canada back, it's holding our farmers back."
