The committee studied the Canada-China preliminary joint arrangement on Canada's electric vehicle sector. Appearing were Brian Kingston of the Canadian Vehicle Manufacturers' Association, Charles Burton as an individual, David Adams of the Global Automakers of Canada, Andrew McKinnon of Accelerate: Canada's ZEV Supply Chain Alliance, Daniel Breton of Electric Mobility Canada, and Moe Kabbara of the Transition Accelerator.
Brian Kingston argued the agreement undermines the auto sector by allowing 49,000 Chinese vehicles into the market, equivalent to 30% of last year's EV sales, and creates risks from China's state subsidies, weak labour rights, and security concerns over connected vehicle technology. He said the deal is incompatible with Canada's commitment to ban Chinese-connected vehicle software and hardware, could allow Chinese OEMs to earn up to $980 million annually in compliance credits under the still-active EV mandate, and risks irritating the U.S. ahead of CUSMA review. He recommended aligning with the U.S. approach to China and implementing a connected vehicle ban.
Charles Burton testified that Chinese EVs pose a critical security threat, describing them as spy machines on wheels with integrated sensors and GPS that can camouflage spyware, and noted that Chinese corporations are legally obligated to support state intelligence. He argued Canada should have implemented an outright ban on security grounds, as it did with Huawei and Nuctech, rather than using tariffs, and warned that the deal invites diplomatic complications and risks weaponization of vehicles for destabilization. He disagreed with the premise that the arrangement is merely a trade agreement, calling it a strategic error.
David Adams emphasized the need for a fair, transparent, and rules-based environment for any new entrants, noting that most vehicles sold in Canada are imported and that the 100% tariff was originally imposed to address unfair trade practices. He said the quota of 49,000 EVs represents 30% of EV sales and is an irritant to the U.S. at a sensitive time for USMCA review, and that Canada has not established regulations similar to U.S. connected vehicle bans. He recommended establishing guardrails for new entrants to ensure a level playing field and safeguard privacy and security.
Andrew McKinnon argued that a limited allowance of Chinese EVs must be paired with continued support for Canada's own EV industry, particularly critical minerals and materials production, to build the market and facilitate technology transfer. He said future deals should include safeguards for Canadian intellectual property, requirements for Canadian materials, and provisions for technology transfer to Canadian firms, and recommended a national IP strategy for critical materials producers. He disagreed with the idea that the deal offshores value, stating that selective exposure helps grow the market and demand for Canadian materials.
Daniel Breton argued that diversification is the only option for Canada, noting that traditional automakers have decreased Canadian production by over 80% in 20 years while the EV sector has created 130,000 jobs. He said Chinese EVs are technologically advanced and that affordable EVs are unavailable in Canada, with the cheapest starting around $40,000, and that the deal will not undermine the industry because initial vehicles will come from non-Chinese brands already on the market. He recommended investing in cold-climate EV research, battery recycling, and critical minerals refining, and disagreed with claims that EVs are unique spy vehicles, noting all modern vehicles are connected.
Moe Kabbara argued that the question is not whether Chinese autos reach North America but when and how, and that Canada's engaging now is a smart head start. He said the model of structured joint ventures, as used by China and global automakers, can allow Canada to get durable benefits like investment and learning, and that preferential market access can drive real investment in batteries and processing. He recommended designing the agreement with conditionality on investment and using European models to address security concerns, such as Canadian software on Chinese hardware, and disagreed with what he called laughable security claims while acknowledging legitimate risks.
AI-generated summary — may contain errors; verify against the official evidence.