Canadian Canola Industry Is Not Happy

The Canadian government has announced that it is investing $370 Million in a biofuels industry, in part, to help shore up Canada’s struggling canola industry against Chinese tariffs.  The federal government has also announced that canola producers will have their Advanced Payment loan program expanded.  Canola industry and canola producer reactions were lukewarm.  Most are saying they would be far happier to see an end to the ongoing tariff wars, altogether.

Canada is the world’s largest exporter of canola and China is, by far, the largest Canadian canola market.  Last year, Canada shipped almost $5 billion worth to China. Last August China imposed tariffs on Canadian canola seed, and then in March China followed up with tariffs oil and meal in retaliation against tariffs on Chinese steel and aluminum and on Chinese electric vehicles.  China is also investigating allegations of product dumping by the Canadian industry.

Rob Stone farms in central Saskatchewan.  He is pleased to see Ottawa acknowledging the issues facing Canada’s canola producers, but Stone says Ottawa’s announcements do nothing to replace the Chinese canola market.

This Is A Great Investment

“I think it’s great to see a recognition that this is an important issue with federal government," Stone said.  "I think it’s probably the most elevated response that we’ve seen from them. As a farmer, I’m happy to see that. However, measures like an expansion to the Advance Payments Program is just more debt. And the biofuel, I think it’s great to see investment in Canada. It doesn’t replace the fact that China is our largest market for canola. That’s the biggest market risk for us.”

Many within the canola industry think the quickest way to resolve this issue is for Canada to remove its tariff on Chinese electric vehicles. And it seems that a majority of Canadians want the same thing. According to a recent Nanos Research survey, 62% of respondents say they support removing the 100% tax on all Chinese-made electric vehicles.  And, on Tuesday, Canadian Agriculture Minister Heath MacDonald said a decision to scrap, or at least ease those tariffs, is under review.

We Want China Reopened

The Canadian Canola Council stated that last week’s announcements from Ottawa really do nothing. Chris Davison, president and CEO of that organization, said that the best thing Ottawa can do to help his industry is to do whatever it needs to do to get the Chinese market reopened.

“When we have a market like China that’s closed, most of what was announced misses the mark, in terms of the support that the canola industry needs right now," Davison said.  "The longer these tariffs remain in place, then obviously the cost to address that increases significantly. These are political issues that need political solutions.”

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