Ottawa wants certainty from China before making concessions on canola tariffs, minister says

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China has announced a 75.8-per-cent duty on Canadian canola seed, escalating a costly trade war between the countries and prompting Ottawa to say it will hold off on making concessions until it knows Beijing will respond in kind.

Beijing unveiled the preliminary duty on Tuesday toward the end of a one-year anti-dumping probe, which began after Canada imposed high tariffs on Chinese-made electric vehicles.

China’s Ministry of Commerce said Canada’s agricultural sector has benefited from extensive government subsidies and preferential policies that distort markets. Many in Canada’s canola industry, however, say China’s action is instead a political response to Canadian tariffs in other sectors.

Minister of Agriculture and Agri-Food Heath MacDonald, asked whether Ottawa would consider eliminating or changing its levies on Chinese products to soften Beijing’s tariffs, said the government was unwilling to give ground until more details came forward.

“We want to make sure that when we make a final decision, we’re making it appropriately and we’re going to get a result back from it,” Mr. MacDonald told The Globe and Mail.

But politicians and industry representatives in Western Canada – the heart of the country’s canola industry, whose largest market is China – said a forceful response is needed to resolve the trade dispute and provide financial aid to the industry.

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Saskatchewan Premier Scott Moe called for “immediate action” in a news conference on Tuesday.

Beijing’s announcement caused prices to drop $1 per bushel in Canada’s $44-billion industry just weeks before harvest. This will cost the 40,000 canola farmers across the country tens of thousands of dollars each. Mr. MacDonald did not confirm whether Ottawa would offer financial aid to make up some of those losses.

Ottawa is now facing a growing trade war on two fronts, with both the U.S. and China. The Prime Minister has already failed to secure a trade deal with the White House by an Aug. 1 deadline imposed by U.S. President Donald Trump.

Ottawa imposed steel tariffs on China as a way to protect Canada’s industry after the U.S. imposed steel duties on this country in July. Beijing’s latest announcement followed that move.

Previously, Ottawa’s decision last year to impose 100-per-cent tariffs on Chinese-made electric vehicles, and 25-per-cent duties on steel and aluminum, resulted in Beijing imposing 100-per-retaliatory tariffs on canola meal and oil in March.

Now all Canola products – meal, oil and seed – are effectively barred from one of the most important global markets.

This is a “political issue that needs a political resolution,” said Chris Davison, president and chief officer at the Canola Council of Canada, in an interview. And it raises questions about what industry Ottawa will prioritize.

“This is front and centre now,” said Andre Harpe, chair of the Canadian Canola Growers Association, in an interview. “We definitely need Ottawa to pay attention.”

Canola is planted on more than 12 million acres, and employs more than 200,000 people, Mr. Moe noted in his press conference.

“That is significantly larger than the steel industry, the aluminum industry and the car manufacturing industry combined,” he said.

Canada exports $4-billion worth of canola seed to China. That accounts for almost 5.9 million metric tonnes of the total 8.7 million tonnes exported in 2024.

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Beijing’s actions Tuesday therefore immediately rippled throughout the market, including for Alberta farmer Roger Chevraux. He lost $90,000 in the value of his crop Tuesday morning, as the price responded to China’s duty.

He will try to hold onto the crop until prices improve, but storage space is limited, and September is an expensive time of year.

Costs such as fuel from running harvest machinery and the bill for fertilizer might force a number of farmers to take a low price. The price could also fall lower.

While Ottawa works on returning to more normal trade with Beijing, Mr. Chevraux would like to see financial support.

“They’re willing to support other industries in Canada. I sure hope they don’t forget about us,” he said in an interview.

Steel, aluminum and auto manufacturers have received government support in the form of financial aid and counter-tariffs and import controls to shield the domestic industry from cheaper competition.

The federal Agriculture Minister said the situation is “fluid” and “fragile” and it is hard to know at this point in time how the tariffs will take effect and what the impact will be. Mr. MacDonald, who recently returned from a trade mission to the Indo-Pacific, said this situation highlights the need for trade diversification.

But Mr. Harpe of the Canadian Canola Growers Association said trade relationships take too much time. China is the largest vegetable oil consumer in the world, with an annual consumption of 38.3 million tonnes. It is near impossible to replace, especially in short order.

Mr. Harpe would like to see Ottawa and provincial governments invest in domestic processing of canola seed by boosting renewable fuel demand.

Canola seed can be processed at crush plants and the oil transformed into renewable diesel at refineries. The federal Clean Fuel Regulation promotes the production of these biofuels by incentivizing manufacturers to gradually decrease the carbon intensity of their products. Provinces can also set clean fuel content guidelines.

The Canadian Canola Growers Association is in discussions with Alberta to raise the clean fuel content threshold.

The demand would be met by a new Imperial Oil refinery that started producing renewable diesel in July. At full capacity, the facility has the capacity to refine 2.5 million tonnes of Canola seed, almost 50 per cent of the total exports to China, Mr. Harpe said.

Renewable fuel content – and investment in crush plants – is an area where Canadian business and politicians have more control and deserves attention, said Tracy Broughton, executive director of SaskOilseeds, in an interview.

“Our farmers keep being collateral damage because of political issues,” she said, adding “we need to be thinking about how we, as an industry and as farmers, can redirect our attention to the domestic marketplace.”