Canada Launches Consultations to Impose Surtax on Chinese EVs
Trade Update • July 9, 2024
he Government of Canada has launched a 30-day consultation (beginning July 2, 2024 through to August 1, 2024) to seek input on what is driving China’s surging electric vehicle (EV) exports. Chinese producers are generating a global oversupply that will erode the profit incentives of EV producers around the world, including in Canada.
Objective of the Consultation
Canada’s move comes weeks after both the United States and the European Commission announced plans to impose higher import tariffs on Chinese EVs soon.
The objective of the consultations is to seek views on the potential imposing of a surtax, adjustments to the federal Incentives for Zero-Emission Vehicles (iZEV) program and investment restrictions. Following the conclusion of the consultation period, the government will use feedback from stakeholders to help inform decisions about which potential policy responses should move forward, and what the appropriate policy details, such as tariff rates, of those policies will be.
Canada’s Potential Policy Response, Public Comments Sought
Canada is considering response measures to support its EV industry and protect against unfair imports from China, while safeguarding national security. Public comments are invited on potential measures:
- Surtax: Whether to impose a surtax (under section 53 of the Customs Tariff) on all or some of the Chinese vehicles listed in Annex 2 (which includes a host of hybrid or electric passenger vehicles, trucks, buses, and similar vehicles powered by fuel cells).
- Incentive Program Ineligibility: Whether to exclude zero-emission vehicles made in China from eligibility under the Incentives for Zero-Emission Vehicles (iZEV) Program and Heavy-Duty Zero-Emission Vehicles (iMHZEV) Program, both of which provide point-of-sale incentives for the purchase of new passenger and commercial EVs.
- Investment: Whether additional actions such as further policy guidance, monitoring, or restrictions related to transactions and investment from Chinese sources in the Canadian EV supply chain are required or would be desirable to safeguard net-benefits to Canadians and Canadian national security.
- Cyber and Data Security Issues in Connected Vehicles: Whether information and communications technology and services (ICTS) developed, manufactured, or supplied by persons subject to the jurisdiction or direction of China present risks to the privacy of Canadians, their data, and Canada’s national security interests, including instances where vulnerabilities in the ICTS may be exploited.
- Other Measures: Whether there are other potential policy responses that Canadians and stakeholders would like to propose, including proposal related to protecting Canada’s broader EV supply chains, including steel and aluminum.
The government intends to review any measures within a year and possibly extend them. More details can be found here.
Submit Your Comments
Submissions for this consultation will open from July 2, 2024, to August 1, 2024.
Email your comments and feedback to tariff-tarif@fin.gc.ca, including “EV consultation” in the subject line.
Comments and feedback may also be sent by mail to:
International Trade Policy Division (EV Consultations)
Department of Finance
90 Elgin Street, 14th Floor
Ottawa, Ontario K1A 0G5
Please include the following information with your submission:
- Company/organization name, address, telephone number, and contact person;
- Views on the questions posed above, and any additional relevant information; and,
- Indication of whether any information provided is commercially sensitive.
Questions if your products are affected and/or assistance with you submission? We are always here to help, contact us.
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