Toronto Region Board of Trade review of the Preliminary Agreement-In-Principle to Address Economic and Trade Issues between Canada and the People's Republic of China
Canada has announced a reset in its economic engagement with China, centred on energy, agri-food, clean technology, and electric vehicles. The move introduces a capped tariff-rate quota for Chinese-made EVs, alongside steps to resume formal trade dialogue and encourage new investment. The federal government has indicated that this is not a comprehensive trade deal or an open-ended market opening.
The focus now is execution. This is particularly important for Ontario’s auto sector. Issues like, how the quota is administered, what safeguards will be enforced, and whether market access delivers measurable investment, jobs, and supply-chain capacity.
For Ontario’s automotive sector this reset and the opportunity for Chinese made electric vehicles to enter the Canadian market is a shift. Even modest quotas can alter market dynamics, affecting investment decisions across manufacturing, supply chains, and services. Manufacturers are paying close attention to what the impacts of these vehicles will mean.
Equally important is the impact of this reset on Canada’s ongoing renegotiation with the United States of the Canada-U.S.-Mexico Agreement, an agreement that remains foundational to Canada’s economic competitiveness across an array of sectors.
Canada-China Trade Statistics
$118.9B
Total two-way merchandise trade, making China Canada’s second-largest single-country trading partner (2024).
$30B
Canadian merchandise exports to China in 2024.
$88.9B
Canadian merchandise imports from China in 2024.
Electric Vehicle Agreement
49,000
Chinese-made EVs permitted annually at the standard most favoured nation tariff rate, representing less than 3% of Canada’s new-vehicle market.
~70,000
Potential five-year cap cited publicly as part of the agreement’s trajectory, though not yet confirmed or codified.
<$35K
Projected target import price for more than half of EVs entering under the quota, according to federal projections that remain subject to clarification.
Agriculture Trade Statistics
84% → 15%
Reduction in Chinese tariffs on Canadian canola seed expected by March 2026, down from retaliatory levels.
$13.4B
Value of Canadian agri-food, forest, and seafood exports to China in 2024.
~$3B
Estimated export orders that could be unlocked through agri-food tariff relief, including canola seed, meal, seafood, and peas.
“At its best, the Canada-China relationship has created massive opportunities for both our peoples.”
— Mark Carney, Prime Minister of Canada
Source: https://www.pm.gc.ca/en/news/news-releases/2026/01/16/prime-minister-carney-forges-new-strategic-partnership-peoples
"Two things that won't change quickly though, are that China's auto sector is state-owned and centrally-planned and that Canadian auto production needs US market access to sustain itself. Concessions or agreements that Canada is considering with the former must be carefully weighed against risk to the latter.”
— Flavio Volpe, president of Canada’s Automotive Parts Manufacturers’ Association
Source: https://www.nationalobserver.com/2026/01/15/news/ontario-ford-chinese-evs-reactions
“This deal is welcome progress for farmers who have been dealing with trade challenges on a number of fronts.”
— Drew Spoelstra, President, Ontario Federation of Agriculture
Source: https://ofa.on.ca/issues/tariffs-and-trade/
“China now has a foothold in the Canadian market and will use it to their full advantage at the expense of Canadian workers. This lopsided deal risks closing the door on Canadian automakers to the American market, our largest export destination, which would hurt our economy and lead to job losses.”
— The Hon. Doug Ford, Premier of Ontario
Source: https://www.reuters.com/world/china/canada-china-set-make-historic-gains-new-partnership-says-carney-2026-01-16/