Question Period Note: BILATERAL AGRICULTURAL TRADE WITH CHINA

Q1 – What has been the Government’s response to China launching its anti-dumping investigation on imports of Canadian canola seed? Q2 - What has been the Government’s response to China’s conclusion of its anti-discrimination investigation? Q3 – What is the Government doing to resolve other outstanding non-tariff related trade issues impacting agricultural exports to China? Q4 – What is the Government doing to financially assist the sector?

R.1 - The Government of Canada appreciates the close collaboration with the Canadian canola sector and provinces following China launching an anti-dumping investigation on imports of canola seed from Canada. Canada is monitoring developments to help defend Canadian interests. We will always stand up for Canadian canola farmers, businesses, exporters, and their communities and support their interests and success at home and in markets abroad.

Canola is one of Canada’s most valuable agricultural exports and an important driver of the economy. We remain committed to ensuring fair market access for our exporters, farmers and producers. R.2 - The Government of Canada recognizes that Canadian industry stakeholders are concerned about the impacts of the tariffs imposed by China.

The Government of Canada has initiated a dispute settlement process at the World Trade Organization with respect to these unjustified tariffs.

The Government of Canada is working in collaboration with the provinces and industry, to mitigate the impacts of these trade measures, including identifying new market opportunities for Canadian products.

We will continue working with all key players to uphold rules-based trade to maintain predictability for our agriculture producers and exports. R.3 - Canada continues to pursue every available opportunity, both at the bilateral and multilateral level, to press China to resolve current trade issues, respect international trade rules, and base its trade measures on scientific principles.

As such, the Government continues to allocate significant resources, both in Canada and across China, to support Canada’s engagement efforts with China to address trade issues, promote Canadian products in-market, and advocate for rules and science-based trade to advance Canada’s agricultural interests.

Doing business with China is high-risk, and Canadian exporters are facing increasing challenges. The Government continues to encourage Canadian exporters to adopt appropriate risk mitigation and diversification plans. R.4 - The agriculture sector is experiencing multiple challenges, including the tariffs imposed by China, trade uncertainty with the United States, and other risks like animal disease.
To help our hard-working producers get through these challenges, on March 22, 2025, the Government announced its intention to increase the AgriStability compensation rate from 80% to 90% and doubled the current payment cap to $6 million for the 2025 program year.

As farmers are facing uncertainties heading into this crop year, the interest-free limit for cash advances under the Advance Payments Program was temporarily set at $250,000 for the 2025 program year instead of returning to $100,000. This change is expected to provide an additional interest savings of up to $65 million to over 13,000 producers.
Fertilizer prices have increased sharply due to global supply concerns and the tariff on Russian imports. Budget 2023 allocated an additional $34.1 million to the established On-Farm Climate Action Fund to help Eastern Canadian farmers impacted by high fertilizer prices in their adoption of nitrogen management practices to optimize the use of fertilizers.

Canada-China Agricultural Bilateral Trade
China is a priority market for Canadian exports of agricultural, agri-food, and fish and seafood products, and despite market access disruptions, China remains Canada’s second largest export market for the sector, behind the United States. Canadian exports of agricultural, agri-food, and fish and seafood products to China were valued at $11.5 billion in 2023 and decreased to $9.6 billion in 2024, representing 9.4% of Canada’s total agriculture, agri-food, and fish/seafood exports to the world. Key exports to China in 2024 were grains and oilseeds (e.g., canola seed, barley, wheat, soya beans), fish and seafood, dried peas, pork products, and animal feed (e.g. canola meal).

Changes in Canadian exports tend to be in commodities that China currently needs (e.g., canola, wheat), and are not indicative of stable market growth nor sustained market share. For example, Canada’s share of China’s global imports of agriculture, agri-food, and fish and seafood products (by value) has been declining since 2018: 5.8% in 2018 (ranked 4th), 4.8% in 2019 (ranked 5th), 4.2% in 2020 (ranked 6th), 4.0% in 2021 (ranked 7th), 3.2% in 2022 (ranked 8th). While Canada’s share increased to 4.35% in 2023 (ranked 5th), this could be partly attributed to an increase in commodity prices for key Canadian exports. Canada’s share decreased to 3.9% in 2024 (ranked 7th).

Canadian agricultural exports continue to be subjected to arbitrary trade actions and non-tariff barriers by China (e.g., unjustified sanitary and phytosanitary measures, lack of transparency), putting market access for Canadian agriculture, agri-food, and fish and seafood exports at risk and adding significant costs and uncertainty for Canadian exporters. China’s current measures against Canada include:

• Beef access: Since December 2021, Canadian beef exports to China remain halted due to China’s BSE-related trade suspension following Canada’s notification of an atypical case of BSE. In accordance with guidelines of the World Organization for Animal Health (WOAH), the detection and reporting of this atypical BSE case did not affect Canada's WOAH negligible risk status for BSE and should not have affected trade. Moreover, revised WOAH standards on atypical BSE adopted in May 2023 reaffirm that atypical BSE detections do not affect the BSE risk status of a country or zone. Despite Canada providing all the technical information requested, China has yet to provide timelines for the restoration of access. Canada continues to engage China to resume trade without further delays.
• Pet food: Since February 2022, Canadian exports of heat-treated dry pet food containing poultry ingredients remain halted due to China’s Highly Pathogenic Avian Influenza (HPAI) trade-related restrictions following confirmation of HPAI in Canada. Canadian officials have stressed that China’s restrictions are not consistent with its World Trade Organization (WTO) obligations, international guidance, and negotiated veterinary certificate, which does not specify that Canada must be recognized as free of HPAI. Canada continues to engage China to remove its restrictions without further delays.

Chinese authorities have shown limited willingness to constructively engage on technical issues with Canadian officials to resolve and advance outstanding agricultural trade issues impacting Canadian exports. In some key trade issues, such as pet food, beef, pulses and oats, Canada’s market access requests and submissions of technical data and/or official letters go unanswered by the General Administration of Customs of the People's Republic of China (China Customs), the CFIA’s Chinese counterpart.

Canadian officials continue to work closely with officials from like-minded countries to share information and experiences and develop common approaches with respect to raising concerns with China’s measures at the WTO. China’s approach to trade continues to shift in contradiction to established international trade rules, its WTO obligations, science-based trade and concerns by trading partners.
China’s actions in response to Canada’s tariffs on Chinese EVs and steel and aluminum

In August 2024, the Government of Canada announced a series of measures to level the playing field for Canadian workers and allow Canada’s EV industry and steel and aluminium producers to compete in domestic, North American, and global markets.
This included the implementation of a 100% surtax on all Chinese-made EVs and a 25% surtax on imports of steel and aluminium products from China that became effective in October 2024.

In September 2024, China’s Ministry of Commerce (MOFCOM) announced a series of measures in response to Canada’s announcement, including:

(i) China will initiate a WTO dispute against Canada;
(ii) China will start an "anti-discrimination investigation" under a domestic law against Canada’s measures and promises to take additional measures against Canada in the future “according to the actual situation”; and
(iii) China will launch an anti-dumping investigation into imports of canola seed from Canada covering the period of January 1, 2023, to December 31, 2023.

(i) WTO dispute against Canada
China made an initial request for consultations in September 2024 and a subsequent request in March 2025. Consultations were held on April 7. Limited progress was made.

(ii) Anti-discrimination investigation
On March 8, 2025, MOFCOM announced the conclusion of its “anti-discrimination” investigation. Effective March 20, 100% tariffs are being imposed on imports of Canadian canola oil, canola meal and peas, and a 25% tariff is being imposed on certain fish, seafood and pork products.

Canada requested consultations with China through the WTO Dispute Settlement process. Those consultations were held on April 23 and resulted in little progress towards a resolution.

(iii) Anti-dumping Investigation on Canola Seed
Canada is participating actively in China’s anti-dumping the investigation to help defend Canadian interests. This includes engaging with MOFCOM via the Canadian Embassy in Beijing, placing evidence on the record of investigation, responding to questions in the detailed questionnaire issued by MOFCOM and participating in a hearing with MOFCOM, where Canada was able to outline legal and factual matters related to the injury investigation.

China’s anti-dumping investigation should be completed within 12 months of the notice of initiation (September 2025), but it can be extended to 18 months under certain circumstances (March 2026). Notwithstanding these timelines, MOFCOM could make a preliminary determination at any time.

• China’s “anti-discrimination” investigation resulted in tariffs on imports of Canadian canola oil and meal, peas, and certain seafood and pork products.

• As we navigate challenging times on the global stage, the Government understands that maintaining access to key export markets, including China, is critical to the Canadian economy.

• We remain committed to advancing Canada’s agricultural interests, including pursuing new business opportunities in Asia, through our network of Trade Commissioners across the world and Canada’s Indo-Pacific Agriculture and Food Office.

• While we continue to monitor policy developments, Canada will continue to engage China bilaterally and multilaterally to prevent unjustified disruptions to trade.

• The Government will always stand shoulder-to-shoulder with our farmers, producers, and workers who export the finest products around the world.