Trade war with China could have devastating impact on Canadian canola farmers

Global News

4 hours ago

'Here we go again. If it's not one thing, it's another, especially with China. They've always got something up their sleeve so they can drop our price.'
That's how John Guelly, a canola producer near Westlock, Alta., reacted to Tuesday's news that China is slapping a 75.8 per cent tariff on imports of Canadian canola.
Guelly, who is a former chair of Canola Alberta, an advocacy group for the province's 14,000 canola farmers, estimates the value of the Canadian canola production at $12 billion annually, or about 15 per cent of the total income Canadian farmers receive from the sale of agricultural commodities each year.
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John Guelly, who grows canola near Westlock, Alta., said trading with China is like a revolving door because they always seem to find a new reason to impose tariffs. Global News
China is the world's largest importer of canola — purchasing nearly all of it from Canada, and using it primarily to make animal feed for its aquaculture sector.
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In March, China also imposed a 100 per cent levy on Canadian canola oil and meal, plus peas, and a 25 per cent duty on Canadian seafood and pork.
China claims these crippling new tariffs are needed to prevent 'dumping' of Canadian canola into the Chinese market, hurting domestic canola farmers.
But the tariffs on raw canola are widely believed to be a China's response to Canada imposing a 100 per cent tariff on Chinese electric vehicles that was put in place in October 2024.
Chinese EVs are significantly less expensive than North American-made EVs, in part because of lower labour and environmental standards and state subsidies.
Then-prime minister Justin Trudeau said the tariffs, which are similar to American tariffs on Chinese EVs, were needed to protect Canada's auto industry.
'We seem to be helping out Eastern Canada and Western Canada suffers again. Unfortunately, our southern neighbour seems to be giving them a little more extra ammunition,' said Guelly.
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For canola farmers, news of the tariffs come at a particularly bad time of year because many are preparing to start this year's harvest. Global News
Ryan Hofford, who farms about 480 hectares (1,200 acres) near Swan River, Man., said that almost immediately after the new tariffs were announced, the price he expects to get for his crop this fall dropped by about $30 per tonne or about $50 per acre.
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'And (it's) important to remember that that $50 per acre comes out of the profits. You know, fertilizer's been paid, seed has been paid, chemicals, everything's paid. So all we're left with now is the profits. If we didn't have any production pre-priced in my case, this hit would be about a $30,000,' said Hofford.
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Ryan Hofford, who grows canola near Swan River, Man,, said the price he can get for his canola dropped by about $50. per acre overnight — a loss of about $30,000 after expenses. Courtesy: Ryan Hofford
Saskatchewan Premier Scott Moe reacted to news of the tariffs, which come just as this year's harvest is about to begin, by saying they 'will have a devastating impact' on the country's agriculture industry.
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'This $43 to $45 billion Canadian canola industry that we have (is) employing just over 200,000 people,' said Moe.
'To put this into context, that is significantly larger than the steel industry, the aluminum industry and the car manufacturing industry combined. It's about the same size as the Canadian forestry industry, which we saw significant supports for just this past week.
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'Each of those industries, the steel the aluminum and the EV industry, have been hit hard by U.S. tariffs, as has our forest industry.'
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Saskatchewan Premier Scott Moe says the Canadian canola industry is worth $43 to 45 billion Canadian each year and employs over 200,000 people. Global News
Moe said canola producers deserve the same amount of attention and support from the federal government as the other industries that have been hit hard by tariffs.
'We are asking that this be dealt with immediately and I've reached out to the prime minister this morning and I suspect I will be speaking with him at some point later today,' said Moe
3:20
Canada targets China with higher tariffs as part of steel industry measures
The tariffs on canola are not the only bad news for Canadian farmers. The Chinese government also announced Tuesday that is has started an anti dumping investigation into imports of Canadian pea starch, which is used as a food ingredient and in other applications such as paper making, phamaceuticals and textiles.
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While Moe said the new tariffs on canola are expected to 'stop a significant amount of trade that is flowing into China today, 'finding a replacement for the millions of tonnes of canola (that China purchases from Canada) will be very difficult unless import demand drops sharply,' said Donatas Jankauskas, an analyst with commodity data firm CM Navigator.
Australia, the world's second-largest exporter of canola, has been shut out of the Chinese market since 2020 due mainly to Chinese concerns over the spread of a fungal plant disease.
For Canada's canola farmers, the ultimate solution to the trade dispute would be to find other markets.
'We've been doing our own on this end, trying to get more domestic crush capacity and more use for our oil domestically so that we don't have to rely on some of these international countries that we sell to,' said Guelly.
But unfortunately, in the short term, while they wait for Ottawa and Bejing to try to resolve their differences, Guelly says farmers are going to need to 'ride it out.'
'Here we are. We're not fighting the weather, we're fighting the markets.'
–with files from Reuters and The Canadian Press.