By A.D. Frat
In a political landscape where the US is increasingly aggressive on all fronts towards Canada, the Carney government and the political forces backing it have had to alter their orientation to the global market.
One result of this is the recent trade deal with China, which reverts back to positions held in 2024 and starts to normalize Canada’s relationship with that country. The deal includes a reduction of tariffs on Chinese EVs to 6.1 percent with a quota of 49,000 vehicles, of which half must be below $35,000 to ensure EVs are more affordable to people in Canada. In return, China is reducing duties on Canadian canola seed – which will drop from 84 percent currently to 15 percent by March 1 – as well as various seafood exports.
Already numerous voices are voicing their discontent with this trade deal – these include Unifor President Lana Payne, Ontario Premier Doug Ford and anti-China hawks on the right like Pierre Poilievre. Some complaints are borderline panic-stricken, like Doug Ford calling these vehicles “the spy car” and cautioning Canadians who purchase these vehicles that they “will not be allowed to go to the US” because of “cybersecurity threats.”
Unifor’s Payne stated: “This is a self-inflicted wound to an already injured Canadian auto industry. Providing a foothold to cheap Chinese EVs, backed by massive state subsidies, overproduction and designed to expand market share through exports, puts Canadian auto jobs at risk while rewarding labour violations and unfair trade practices.”
This response from the Unifor leadership is telling. It suggests a mentality that strives to simply maintain and manage the relationship with already entrenched US manufacturers. It shows a reluctance, or perhaps inability to push for a sovereign, independent economic policy that promotes the immediate and longer-term interests of working people in Canada. A similar stance has been taken by the United Steelworkers, who aligned with steel mogul (and Trump donor) Barry Zekelman to promote his “Buy Canadian Steel” program.
To be clear, it’s not that buying Canadian products is to be dismissed – quite the opposite. But the working class does not benefit from fighting for the owner’s ability to profit more. It benefits if it politically fights for its own interests, like pushing for a nationalized and democratically controlled industry that includes a vertically integrated supply chain, as a way to protect and increase good wages and unionized jobs.
The anarchy of profit or rational planning?
Many in the camp against allowing Chinese EV vehicles argue that the influx of these cheaper imports will decimate the auto industry in Canada, essentially asking people to continue paying high prices for American vehicles to maintain 7,000 auto worker jobs in this country.
But drumming this kind of jingoist argument, blaming “cheap Chinese labour,” is just another race to the bottom. And it isn’t even supported by the data: The average cost of labour for a Chinese EV manufacturer is around $585 per vehicle, while the average cost of an American one is $1341. Are we really claiming that a difference in labour costs of less than $800 is why the average vehicle sold in Canada costs nearly $50,000?
There may be more credibility in looking at how the Chinese and American industries are differently organized.
To start, vertically integrated supply chains in China create cost savings in comparison to American manufacturers, which tend to support an external supply chain with each separate enterprise trying to pad their profit margins while pushing down their labour costs. The Big Three automakers first pushed for this latter style of supply chain in order to weaken unions’ ability to demand better pay across the industry, and to increase their short-term profitability by offloading maintenance costs. This strategy, which makes for better quarterly reports to shareholders, was honed by former General Electric CEO Jack Welch who differentiated between “front of house” and “back of house” operations.
On top of this is the huge difference in the overall amount of EV industrial development.
China’s EV industry is the largest in the world, with 70 percent of global production. This includes passenger vehicles as well as public transportation and light commercial vehicles. This rapid and impressive development was part of China’s 11th Five-Year Plan (2006-2010) which included a focus on high-value manufacturing and energy efficiency. As part of that Five-Year Plan, the Chinese government developed a strategy in 2009 which aimed to make China a global leader in EVs by 2012.
In 2019 there were an astounding 500 EV companies in China, although that was reduced to around 100 companies by 2023, through market consolidation and competition. Not all EV companies in China are state-owned, but many are, including some of the largest. Moreover, the industry benefits from state policy which consistently supports EV development over the longer term. Yes, there are large private corporations, but their development occurs within an overall framework of state policy and planning.
The results of China’s approach speak for themselves: modern and efficient production, widespread and expanding electric public transit and transportation, passenger vehicles that are far more affordable for working people.
The comparison with the North American EV strategy within the same timeframe reveals stark differences. Here, governments have dedicated billions of public dollars to create a market for oligopolists in the auto industry. US automakers have been hot and cold with EVs for decades, wasting years of development for short-term profit seeking.
Opponents of the China deal moan of “unfair state subsidies,” but they are silent about subsidies paid out here. In recent years, governments in Canada have promised an eye watering $57 billion dollars of public funding to corporate monopolies like Volkswagen, Stellantis, Honda and General Motors to develop a domestic EV supply chain, but with no guarantees of ownership let alone job creation. Is this considered a “fair subsidy?” What could $57 billion have achieved if Canada utilized China’s model for EV development?
Labour vs corporate trade deals
Unifor’s Payne also voiced concern over Ottawa’s ability to defend workers’ jobs and wages during the upcoming USCMA negotiations, in the wake of the new trade deal with China.
But the real question labour leaders should be asking is whether Canada’s trade policies should continue to be subservient to US capital. History suggests, clearly, that it should not be: US-focused neoliberal policies, like USMCA and NAFTA and the CUSFTA before it, have put workers in Canada in a severely disadvantaged position, and a reworking of neoliberal policy will not help workers or their unions out of it.
Through its response to the trade deal with China, Unifor and much of the labour movement in Canada seem to be bolstering these same free trade agreements. These are agreements that the labour movement fiercely opposed when they were first introduced in the late 1980s and early 1990s.
Wouldn’t a better approach be for labour to promote a Canada-wide industrial strategy that includes a “Canadian car” – a nationalized industry that produces electric passenger, public transportation and light industrial vehicles? Rather than calling for more of the status quo, which is increasingly failing workers in Canada, couldn’t labour push to secure supply chains and better integrate them into the whole manufacturing process including steel industries? There is a big opportunity here for Unifor and other unions to call for the necessary technological transfers from China’s leading tech sectors, going beyond simply importing and encouraging piecemeal Chinese investment in Canadian manufacturing.
Nationalize auto – a vital campaign for labour
It is painful to say, but Mark Carney is correct when he describes the deal with China as “a partnership that reflects the world as it is today, with an engagement that is realistic, respectful and interest-based.” The US under Donald Trump is looking to squeeze every relationship it can, in an era where it has a “near-peer adversary” like China. Invoking the “DONroe” doctrine to secure its control over the hemisphere of the Americas, Washington will only become more audacious.
Of course, the incorrect part of Carney’s view has to do with what “Canadian” interests are. As the Bay Street technocrat that he is, he sees Canada from the viewpoint of the capitalist class and argues for continuing its trajectory as a raw material supplier of the world. This was neatly summarized in the content of his recent trade deal talk: all low value-chain agricultural products for the import of high tech, high value-chain vehicles.
From the viewpoint of the working class, the questions are: Why keep this relationship? How do we move past this position?
Lana Payne is right to say that this recent deal with China, in and of itself, won’t be good for workers in Canada as a whole – but neither will capitulating to US auto capital. Rather than pressing for more billions in public subsidies to corporations that do not have working-class interests in mind, labour needs to advance trade and industrial policies that emerge from workers’ needs.
This is why the campaign for a nationalized auto industry, building EV transportation in Canada, for use throughout Canada is important. Such a campaign is key to protecting automobile production and jobs in Canada, for expanding manufacturing and value-added secondary industry, and for countering economic attacks from the US as well as Ottawa’s austerity measures. It would also be an organizational platform from which labour could develop and advance independent and sovereign political policies that work for workers.
This kind of campaign has already received support from many Unifor members. Last year’s Ontario Federation of Labour convention adopted a resolution calling for the nationalization of auto and steel industries, and the upcoming convention of the Canadian Labour Congress will consider the same. This shows the real potential for unifying the labour movement in action – bringing the CLC, Unifor and Quebec union centrals into a coordinated mobilization that workers across Canada desperately need.
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