Market Intelligence

Nine months after Mark Carney and Xi Jinping met in Beijing, the clearest gains in Canada–China trade have come in crude oil and farm goods. Canada's goods exports to China rose 36.0% year-on-year in January–August, to CAD 29.0bn. Crude oil alone accounted for about CAD 8.2bn, or 28.2%, of the total, helped by the Trans Mountain expansion, and shipments reached CAD 1.16bn in August. Canadian canola sales rose 41% in January–August, while beef shipments resumed after China reopened its market in January. The easing remains partial: canola oil still faces a 100% tariff, and extra tariffs on canola meal, peas, lobster and crab are suspended only through 31 December. Imports from China, at CAD 60.5bn, were little changed (−0.7%), though they have risen in recent months.

China's reported imports from Canada totaled US$39.4bn in January–September (China Customs; recorded by country of origin on a CIF basis, so values include freight and insurance and are not comparable with Canada's export figures).

The most visible test of Canada's side of the deal is electric vehicles. The January agreement lets up to 49,000 Chinese-made EVs a year enter Canada at a 6.1% tariff, in place of a 100% surtax, with the quota reported to rise 6.5% a year to about 70,000 by 2030. Roughly one-third of the year-one quota had been used by 23 October. Tesla paused orders for its Shanghai-built Model 3 in October, citing its allocation, yet government data show about 33,000 of the 33,397 permits in the current period still available. The automaker Geely has said it will begin selling in Canada in 2027. A September Clean Energy Canada survey conducted by Abacus Data found that 42% of would-be EV buyers were willing to wait for Chinese brands to reach the market before buying, though the survey measures intent, not purchases.

Government channels have reopened on three fronts: defense officials met on 4 September for the first time since 2018, the environment ministers agreed in Beijing in late September to relaunch their dialogue, and the investment working group of the joint economic and trade commission held its first meeting in Ottawa on 28 September. On the commercial side, the Shell-led LNG Canada partners, including PetroChina with 15%, approved a C$33bn expansion, and the global asset manager Brookfield began raising an RMB fund for Chinese renewables. Two cross-border deals went the other way: Zijin's C$5.5bn takeover of Allied Gold collapsed, and Ottawa ordered a national-security review of a Chinese lithium purchase.

Several events and deadlines over the next four months will help gauge the direction of the relationship. In November, Carney plans to attend the APEC leaders' meeting in Shenzhen on 18–19 November, and Canada will be guest country of honour at the 9th China International Import Expo, its first appearance in that role in eight years. On 31 December, China's suspension of its 2025 additional tariffs on 16 Canadian product lines expires, and on 28 February 2027 the second period of the EV quota ends. In the background, the WTO case (DS627) that China brought against Canada's surtaxes on Chinese electric vehicles and on steel and aluminum remains on hold while bilateral talks continue.

SELECTED DEVELOPMENTS

Policy and market access

Chinese electric vehicles enter under the new quota

Canada cut its tariff on Chinese-made electric vehicles from 100% to 6.1% on 1 March, for up to 49,000 vehicles in the first quota year, with permits issued first-come, first-served and the quota rising 6.5% a year. Importers used 15,603 of the 24,500 permits in the first six-month window, which ended on 31 August. The second window opened with 33,397 permits, including unused first-half volume, and by the government's 23 October update 15,931 vehicles had been imported in the quota year with 33,069 units still available nationally. Tesla said in mid-October that demand had exhausted its own allocation and stopped taking orders for the Model 3 Premium at C$39,490 (rear-wheel drive) and C$49,990 (all-wheel drive), expecting orders to resume in March 2027 if more permits are issued; the national figures do not disclose Tesla's allocation. On 9 October Geely announced plans to sell vehicles in Canada from 2027, with a local team and a retail and service network under development.

Under the implementing order, the affordability element is phased in. From the second quota year, starting in March 2027, 10% of permits are reserved for vehicles with an FOB value of C$35,000 or less, rising to 50% by 2030, and nothing is required this year. Chinese-built vehicles do not qualify for the federal rebate of up to C$5,000.

Ottawa is also discussing local production. Industry Minister Mélanie Joly met BYD, Chery and Geely in China in June, and the companies expressed interest in partnerships; no agreements have been announced. Chery said on 23 October that it is considering building in Canada through idle plant capacity or partnerships and has pushed its sales launch to early 2027. BYD has been reported considering a Canadian plant, preferring wholly owned operation, with no decision confirmed. The entry has drawn security concerns. Former CSIS director David Vigneault told the BBC that in a Chinese car "everything you do around your car will be acquired by China", while Senator Yuen Pau Woo argues that the United States is the bigger threat to Canada's auto industry. Ottawa says it is proceeding "eyes wide open".

Agriculture gains, with tariffs still in place

The 13th meeting of the China-Canada Joint Committee on Agriculture was held in Ottawa on 29 September, co-chaired by Chinese vice-minister Zhang Zhili and Canada's deputy minister Lawrence Hanson. The January agreement had called for the committee's revitalisation. Canola exports are up 41% over the first eight months of 2026, though the aggregate spans seed, meal and oil; canola oil remains subject to a 100% tariff, as discussed below. Beef is the largest change: China reopened the market in January after suspending imports in December 2021, and Canada exported C$281m of beef to China in January–July, against less than C$1m a year earlier. Pork exports fell 18.7% to C$174m over the same period.

The recovery follows a steep fall. China imposed a 25% tariff on Canadian lobster, crab and other seafood in March 2025, in response to Canada's surtaxes on Chinese EVs, steel and aluminium, and the combined tariff on lobster reached 32%. Canada's lobster exports to China fell 43% in 2025, to US$348m. China's easing since March has taken three forms:

It cut the anti-dumping duty on canola seed from a provisional 75.8% to 5.9%, for a combined rate of 14.9% with the standard tariff, in place for five years to 1 March 2031.

It suspended its 2025 additional duties on canola meal and peas (100%) and on lobster and crab (25%) from 1 March to 31 December 2026.

It left in place the 100% tariff on canola oil and the 25% tariffs on pork and on other fish and seafood.

Separately, a provisional 73.5% anti-dumping deposit on Canadian pea starch took effect on 1 July.

Beijing reopened defense talks with Canada

Canadian and Chinese defence officials met in Canada on 4 September for the fifth China-Canada Defence Coordination Dialogue, the first use of the channel since April 2018. China's Ministry of National Defence described a candid exchange and shared willingness to strengthen military cooperation.

US concerns over transshipment persist.

A White House report published in August models the losses it says the United States incurs when Chinese goods are rerouted through third countries to avoid US tariffs, naming Mexico and Canada among the platforms used. Its central case assumes US$75bn of annual transshipment and, applying a 17% revenue-to-GDP rule of thumb, puts the associated federal revenue loss at US$19bn-26bn a year; a separate illustration applies 25%, 35% and 45% tariff differentials to the same exposure. These figures are scenarios built on a global estimate of rerouted trade. The report does not measure actual losses, and it does not attribute any share of them to Canada or Mexico. China's commerce ministry rejected the report as a false narrative.

Pea starch faces a 73.5% provisional deposit

China's preliminary anti-dumping determination on Canadian pea starch took effect on 1 July 2026: importers must lodge a deposit with Chinese customs equal to 73.5% of the assessed customs value for all Canadian companies, covering unmodified pea starch under tariff line 11081900. The determination, issued on 30 June, found dumping causing material injury to the domestic industry. The investigation, opened on 12 August 2025, was extended on 31 July to 12 February 2027; no final determination has been issued.

A Canadian tribunal is running the mirror-image case on Chinese cables

The Canadian International Trade Tribunal initiated a final injury inquiry (NQ-2026-003) into the dumping and subsidising of certain unarmoured building cables from China, following preliminary determinations by the Canada Border Services Agency.

Energy, climate and nature

Crude flows at scale, and the decision that doubles the LNG corridor

Canada exported CAD 1.16bn of crude oil to China in August 2026 on Canadian customs figures, and crude accounted for 28.2% of Canada's exports to China over the first eight months of 2026. Chinese customs record August imports of Canadian crude at US$782.3m, up 64% year-on-year, and September imports of Canadian mineral products up 9.8% year-on-year, both on Chinese-reported figures; the two bases differ because one values the cargo free on board and the other cost-insurance-freight. The Trans Mountain expansion, which did not exist five years ago, is what made the volume possible.

Canada exported CAD 1.16bn of crude oil to China in August 2026 on Canadian customs figures, and crude accounted for 28.2% of Canada's exports to China over the first eight months of 2026. Chinese customs record August imports of Canadian crude at US$782.3m, up 64% year-on-year, and September imports of Canadian mineral products up 9.8% year-on-year, both on Chinese-reported figures; the two bases differ because one values the cargo free on board and the other cost-insurance-freight. The Trans Mountain expansion, which did not exist five years ago, is what made the volume possible.

Canada's environment minister agreed to relaunch the bilateral environmental dialogue in Beijing

Environment Minister Julie Dabrusin led Canada's delegation to the annual general meeting of the China Council for International Cooperation on Environment and Development in Beijing from 27 to 29 September. She met Huang Runqiu, China's Minister of Ecology and Environment, and the two ministers agreed to relaunch the Canada-China Ministerial Dialogue on the Environment. She also spoke with Vice Premier Ding Xuexiang on the margins of the meeting.

Canada and China co-chaired the Kunming biodiversity dialogue ahead of COP17

Canada and China co-chaired the Kunming Dialogue on collective progress under the Kunming-Montreal Global Biodiversity Framework, held in Kunming from 7 to 9 September ahead of the seventeenth Conference of the Parties in Armenia in October. China's ecology and environment minister Huang Runqiu and Canada's secretary of state for nature Nathalie Provost were the co-chairs.

The Canada China Business Council is taking a cleantech mission to China in November

The Canada China Business Council is organising a Canadian Cleantech Mission to China in November 2026 to connect Canadian clean-technology companies with Chinese commercial and investment partners. No transactions have been announced.

Capital and corporate activity

Zijin Gold's C$5.5bn takeover of Allied Gold collapsed; a 9.2% stake replaced it

Zijin Gold International agreed on 26 January 2026 to buy Allied Gold for C$44 a share, about C$5.5bn. The arrangement agreement was terminated on 29 July, when the outside date passed without the closing conditions being fulfilled; both parties attributed the failure to broader external factors affecting cross-border transactions of this scale, and press reporting during July described the National Development and Reform Commission questioning whether the risks — Allied's Mali exposure in particular — justified the price. Under a subscription agreement signed the same day, Zijin subscribed for 12.8 million shares at C$32.55, about C$416.6m or US$295m, for a 9.2% stake at a premium to the market price; the placement completed on 10 August 2026. State media reported in June plans for a state-backed vehicle to coordinate overseas mining investment.

Canada is reviewing a Chinese bid for a lithium project it says is not Canadian

Canada's foreign-investment screening agency issued a national-security notice under subsection 25.2(1) of the Investment Canada Act on China Union Holdings' US$175m purchase of Argentum Lithium, the Argentine owner of the Salar de Arizaro project, on 14 August, and on 29 September the government ordered a formal review under section 25. The notice states there are reasonable grounds to believe the transaction could be injurious to national security. Lithium Chile contests Ottawa's jurisdiction outright: Argentum is not a Canadian company and has no assets, employees or place of business in Canada.

Brookfield has launched a yuan-denominated renewable fund in China

Brookfield announced on 7 September that its Brookfield China Renewable Fund had begun its first round of fundraising, with an expected scale above RMB 12bn, or about US$1.8bn. The fund is denominated in yuan and targets operating wind, solar and storage assets in China.

Chinese state-backed investors joined Canada's investment summit

Several Chinese state-backed investors took part in Prime Minister Mark Carney's Canada Investment Summit, held in Toronto on 14 and 15 September.

Background note

John Graham, president and chief executive of CPP Investments, met CSRC chairman Wu Qing in Beijing on 21 July; the regulator’s readout announced no allocation.

Cross-border transactions

A selection of bilateral Canada–China transactions from the last twelve months

Announced	Target	Acquirer	Stake	Status	Value
15 May 2026	Nanoleaf Ltd. (Cayman)	OneRobotics (Shenzhen) (SEHK:6600)	Up to 100% (staged)	First closing done	US$40.5m aggregate*
29 May 2026	Palliser Furniture Ltd.	MotoMotion (China)	100% (unconfirmed)	Completed 29 May 26	n/d
10 Mar 2026	Poseidon Corp. (Atlas parent)	Yangzijiang Shipbuilding (SGX:BS6)	10%	Completed 29 May 26	US$825.7m
19 Feb 2026	Blessing Logistics (Alberta)	CN Energy Group (NasdaqCM:CNEY)	100%	Closed 31 Mar 26	US$2.0m in shares
29 Jul 2026	Allied Gold (subscription)	Zijin Gold International	9.2%	Completed 10 Aug 26	C$416.6m (US$295m)
22 Dec 2025	Argentum Lithium S.A.	China Union Holdings (SZSE:000036)	100% (proposed)	Under ICA review	US$175.0m (proposed)

*Nanoleaf: HKEX filing describes a conditional, staged investment agreement dated 15 May 2026 with aggregate consideration of about US$40.54m; the first closing of US$13.53m for 59.9% is the only stage reported completed as of the 18 September interim report.

Commercial connections

Creative-industry and air links expand

Canada's Minister of Canadian Identity and Culture, Marc Miller, concluded a five-day creative-industries mission to Shanghai, Shenzhen and Suzhou, announced on 20 October. The delegation of close to 50 representatives from 36 Canadian companies and organizations, most from interactive digital media, took part in more than 370 business-to-business meetings; the participating companies signed seven commercial agreements worth more than C$4.2m, with further deals under negotiation. Miller met his counterpart Sun Yeli at the Shanghai International Arts Festival. Air Canada will fly Vancouver-Guangzhou three times weekly from May 2027, the only North American carrier on the route.

Student flows remain depressed, driven mainly by Canadian caps

Canada plans to issue up to 408,000 study permits in 2026, of which 155,000 are for newly arriving students and the rest for extensions. Statistics Canada's preliminary estimate puts full-time international enrolment at public postsecondary institutions at about 300,000 in 2025/26, 29% below 2023/24. Chinese students have been affected as part of this broader fall. At member public schools, the Canadian Association of Public Schools-International reports that long-term Chinese K-12 enrolment fell 21% in 2025/26; those students were not directly subject to the postsecondary permit cap. Enrolment has fallen amid the federal cap and other policy and market changes; the available estimates do not isolate the cap's contribution. No formal rollback of Canada's research-security policies was identified in the official sources reviewed by 27 October 2026.

THE TRADE PICTURE*

Chinese customs data suggest the surge peaked in mid-year; growth slowed to low single digits in August and September, partly because of a high comparison base