Economic challenges surrounding canola, a major Prairies crop, have returned because of Chinese tariffs.
A reignited trade war — the one with China — has made federal action essential to protect Alberta farmers and agrifood industries, UCP members and ministers said last week.
On March 20 China imposed 100 per cent tariffs on canola oil, canola meal and peas from Canada, along with 25 per cent tariffs on fish, other aquatic products and pork. The move followed Canada’s tariffs launched last October of 100 per cent on China’s electric cars and 25 per cent on its aluminum and steel.
But Chinese allegations and actions affecting Canadian canola go back at least to 2019. That’s when the world’s most populous country restricted Canadian canola for three years, claiming pests were found in the major Prairies product.
“We are pressing Ottawa for urgent support, including compensation, market diversification efforts and a stronger focus on trade negotiations,” Agriculture and Irrigation Minister R.J. Sigurdson told the legislature.
“But it’s very clear that due to the scope and scale of the impacts of this trade war (with China), the only institution that can compensate our farmers enough is the federal government. We need them to come to the table, and we need them to deal with this and support our farmers right now.”
A trade restriction blocked canola shipped by two major Canadian players between March 2019 and May 2022, with China alleging pests were detected in shipments.
Pundits speculated, however, that the restriction was a reaction to Canada’s arrest of the chief financial officer of Chinese tech giant Huawei. Detained in Vancouver over U.S. charges of bank and wire fraud that were eventually dismissed, Meng Wanzhou returned to China in 2021 after she was released from house arrest.
Then came Canadian tariffs announced last year on electric cars, steel and aluminum from China, and the trade war was on again. Almost immediately, in September, China announced an antidumping investigation against Canada. This year tariffs of canola, peas, pork and aquatic food followed.
Matt Jones, the minister of jobs, economy and trade, said: “The uncertainty these tariffs create for business disrupts supply chains and reduces market confidence, but we’re committed to working with federal and international partners to protect our economy, diversify trade and maintain global market access.”
A $30-billion industry in Canada, canola supports thousands of good-paying jobs, Jones said.
Alberta Treasury Branch reporting says that in 2024 Alberta exported over $408-million in canola oil and meal and over $138-million in dried peas to China.
Alberta government data pegs the value of all 2020 exports to China at $4.5-billion. That number had grown by nearly half to $6.7-billion by 2024.
Said Jones, the member for Calgary-South East, “We need to ensure that these new tariffs don’t slow down our momentum.”
Canada followed the lead of the U.S. under Joe Biden last year in instituting an electric car tariff to protect the North American industry from the communist superpower’s subsidies.
The earlier dispute had already cost the canola industry between $1.54-billion and $2.35-billion in lost sales and lower prices between March 2019 and August 2020, reported the Canola Council of Canada.
China is Canada’s largest canola seed destination, with more than 4.5-million tonnes worth $3.8-billion exported in 2023, the federal government published in a September statement.
The UCP’s Glenn van Dijken, the member for Athabasca-Barrhead-Westlock, said last week: “Alongside the energy sector Alberta’s economy rests on the health and prosperity of our agricultural sector. It supports thousands of jobs and contributes billions to our province’s economy.
“Canadian farmers and food producers now face serious economic uncertainty thanks to China and their retaliative tariffs on Canadian agricultural products.”
Grant Hunter, the UCP member for Taber-Warner, said: “This escalation in trade tensions has already significantly impacted bilateral trade and will continue to do so while these tariffs remain in place.”
Sigurdson, the agriculture minister, called the situation “very complex” and said its full impact remains unknown.
“Our province, of course, has a long history of standing up for its economic interests, and that’s exactly what we’re doing,” added Sigurdson, the member for Highwood.
The legislature’s discussion of trade with China takes place as the Trump effect continues shaking the foundation of geopolitics and geoeconomics.
Since his inauguration in January, President Donald Trump has posted and postured about using tariffs in a way he claims will amp up homeland industries and create a golden age in the U.S. The levels and broad brush of his U.S. tariffs are unprecedented in post-Second World War trade, and most economists say they won’t achieve what Trump says they will.
Prime Minister Mark Carney has said Canada will have to adapt to a new era of its trade relationship with the U.S. A federal election in Canada on April 28 further complicates matters, as leaders for the three major parties crisscross the country on the campaign trail.
Economic challenges surrounding canola, a major Prairies crop, have returned because of Chinese tariffs.
