Canada weighs EV tariff cuts: promise of cheaper cars, but at what cost for jobs?
Tariff removal on Chinese EVs
For years, Canada’s auto industry has lived in the shadow of tectonic changes: the shift to electric vehicles, the scramble for battery plants, and the pressure of U.S. industrial policy. Now, a new possibility looms over the country’s manufacturing heartland: the removal of tariffs on Chinese-made electric cars.
At first glance, the idea looks like a win for consumers. Stripping away a 100 percent surtax on Chinese EV imports, layered on top of the standard 6.1 percent vehicle tariff, could slash sticker prices by thousands of dollars. That would make electric cars more affordable at a time when federal rebates have expired and household budgets remain tight.
Economists say demand for EVs is highly sensitive to price. Even a 10 percent drop could trigger a double-digit jump in sales. For Canada, that could translate into an extra 15,000 to 20,000 electric vehicles sold each year. More cars on the road means more jobs for electricians wiring charging stations, more mechanics retraining for battery diagnostics, and more work for software engineers fine-tuning the connected systems inside the vehicles.
Industry estimates suggest that this kind of surge could create 3,000 to 5,000 new positions across sales, servicing, logistics, and infrastructure over the next few years. Electricians and construction crews would see the strongest demand, as Canada may need to install up to 800 additional public charging ports annually to keep pace with new vehicles.
Pressure on Ontario’s Auto Belt
Yet the very same policy that lowers prices for consumers could strain Ontario’s auto belt. The province’s plants directly employ about 125,000 workers, with nearly half a million more supported through suppliers and local services. Opening the floodgates to low-cost Chinese EVs would expose these jobs to new competition.
Even if only 5 percent of annual Canadian sales shifted away from domestically assembled or North American–sourced vehicles, that could put 3,000 to 5,000 direct assembly and supplier jobs at risk, with multiplier effects echoing through logistics, tool-and-die shops, and small manufacturers across southern Ontario. In a sector where every assembly job supports roughly nine others, the ripple could be wide.
For suppliers already struggling with the shift away from combustion engines (exhaust systems, transmissions, and fuel components), the arrival of cheaper imports could accelerate consolidation and closures. Without a cushion, the risk is not just lost shifts in Oshawa or Windsor but the hollowing out of entire supplier ecosystems.
Where Jobs Could Grow
Other provinces might experience a very different trajectory. Quebec, home to new battery-cell and cathode plants, could emerge as a winner if Chinese EV imports pair with Canadian-sourced components and recycled minerals. That could mean hundreds of new specialized roles in battery recycling and materials processing.
In British Columbia, where auto assembly is minimal, the benefits would show up in dealerships, service centers, and the province’s growing cluster of green-tech firms. Additional EV adoption could support 1,000 or more jobs over time in installation, maintenance, and software services.
The Prairies, while far from the auto heartland, would see gains in construction and energy services. As long-haul fleets electrify, demand for heavy-duty charging corridors could create hundreds of new jobs for electricians, engineers, and truck-stop operators.
Atlantic Canada’s exposure is smaller, but every new shipment of imported EVs arriving through its ports would generate steady work for dockworkers, warehouse staff, and local dealerships. Training institutions in the region could find a niche preparing technicians for EV servicing, adding dozens to hundreds of skilled positions over time.
A Balancing Act for Policymakers
The decision facing Ottawa is not a simple one. Removing tariffs on Chinese EVs would almost certainly increase consumer access and accelerate climate goals by putting more zero-emission cars on the road. But the benefits for electricians, mechanics, and service workers must be weighed against the risks to the manufacturing jobs that have been the foundation of Canadian middle-class prosperity.
Labour unions are already warning that Canada cannot afford to undercut its own plants just as billions in public funds are flowing into retooling and new construction. Industry leaders argue that if tariffs are lowered, they must be paired with strong transition policies: supplier modernization funds, targeted retraining, and content incentives that keep high-value work in Canada.
The Stakes
The stakes extend beyond the auto belt. Canada has pitched itself as a strategic partner in the North American EV revolution, offering abundant minerals, renewable power, and skilled labour. A misstep on tariffs could weaken that pitch, leaving the country more dependent on imports and less central to the supply chains of the future.
If tariffs do fall, the labour market could split along two tracks. On one, cheaper EVs could generate up to 5,000 new jobs nationwide each year across sales, charging, logistics, and recycling. On the other, Ontario’s manufacturing base could see several thousand positions at risk annually if imports displace even a sliver of domestic production.
The outcome will hinge on how Ottawa calibrates its policy. With careful guardrails, Canada could reap the benefits of lower prices while preserving its industrial core. Without them, the country might discover that the road to an electrified future comes at the cost of the very jobs that built its manufacturing strength.