Auto sector urges ‘Team Canada’ approach after China EV trade deal; ‘We are in the fight of our lives’

Ontario Premier Doug Ford speaks to the media regarding the federal governments decision to allow Chinese EV's into Canada at Queen's Park in Toronto on Wednesday, January 21, 2026. THE CANADIAN PRESS/Nathan Denette

Canada’s auto industry, labour leaders and Ontario Premier Doug Ford are raising alarm over a federal trade deal with China, warning it could threaten jobs, investment and the future of domestic vehicle manufacturing.

The agreement will allow up to 49,000 Chinese-made electric vehicles into Canada each year in exchange for easing tariffs on Canadian seafood and canola products. Industry and union leaders say they were not consulted before the deal was reached.

Brian Kingston, president of the Canadian Vehicle Manufacturers Association, said diversification is not a viable option for the auto sector.

“Diversification is not an option for automotive as markets in Europe and Asia are better served by assembly plants in those regions,” Kingston said. “Canada’s market alone is too small to justify large scale manufacturing.”

Kingston said the industry’s future depends on maintaining strong access to the U.S. market.

“The future of Canada’s auto industry, and the hundreds of thousands of jobs that it supports, depends on securing our trade relationship with the United States,” he explained, pointing to the removal of Section 232 tariffs and renewal of the Canada-U.S.-Mexico Agreement.

Kingston called the federal government’s move “deeply concerning.”

“The federal government’s decision to open the Canadian market to Chinese EVs is deeply concerning,” he said, adding the Canada-China Strategic Partnership “has the potential to undermine Canada’s auto sector and presents risks” to the integrated North American supply chain.

He said repealing the federal EV sales mandate must be the first step.

“Under the new Canada China Strategic Partnership, Chinese manufacturers that do not build cars in Canada or employ Canadians will receive up to $980 million per year in compliance credits,” Kingston said. “These compliance credits will be paid for by the very companies that operate here, taking money that could be reinvested in Canada, in Ontario and sending it to China.”

“The future of Canada’s auto industry hangs in the balance,” he added. “The actions that we take now will determine whether or not we have an industry for 100 more years.”

The Automotive Parts Manufacturers’ Association (APMA) said the deal undermines protections designed to seed EV investment in North America.

“The reason that we put 100 per cent tariffs in place in partnership with the Americans and then, with the Mexicans, is to help to seed EV investments in this region and have them bear fruit,” said APMA president Flavio Volpe.

“Making that concession in this moment makes the entire Canadian auto sector on shakier ground,” he said.

Volpe said the scale of the agreement could have costly consequences.

“50,000 cars is about a shift at an auto plant, and a shift is a thousand workers,” he said, noting the ripple effects through the supplier network as trade rules under CUSMA remain uncertain.

Labour leaders say workers are already feeling the impact.

“Auto workers are extremely, extremely worried about their future,” said Unifor national president Lana Payne.

Payne said workers fear a repeat of past trade deals that led to job losses.

“This China deal is a hard pill for them to swallow right now,” she said. “They’ve seen this movie before where their jobs end up on the chopping block because of some trade negotiation.”

“We are in the fight of our lives here,” Payne added.

She said stabilizing the sector and reopening idled plants must be an immediate priority.

“The immediate priority for all of us, for the auto sector, must be to get these plants back into operation and stabilize this sector for the workers who depend on it,” Payne said.

She said any new federal auto policy must include clear conditions.

“If you want to sell vehicles in Canada, you need to build in Canada and employ Canadian workers,” Payne said.

Ontario Premier Doug Ford said the province, labour and industry are aligned.

“We’re sending a united message about the need to stand up in defense of Canada’s economy,” Ford said.

Ford stated he was disappointed the prime minister did not consult provinces before reaching the deal.

“I was very, very disappointed… not to get a phone call, not to get a text message and cutting a deal,” he said.

Ford called for a “Team Canada” approach, including eliminating the federal EV sales mandate and lowering costs for automakers.

“Everything’s on the table,” Ford said, adding he plans to meet with the prime minister and other premiers next week.

“This is all about protecting our workers,” he said.

The federal government has said it is working on a new national auto policy expected in the coming weeks