Canada’s canola sector may see ‘billion-dollar hit’ in China probe: report

Morningstar DBRS said in a report released Thursday that the investigation into canola seed imports by China could result in levies being imposed on the crop.

As Canada’s canola farmers brace for potential impact from China’s new anti-dumping investigation into Canadian canola imports, a new report from an international credit rating agency suggests the move could lead to a “billion-dollar hit” for the country and its supply chain.

Morningstar DBRS said in a report released Thursday that the investigation into canola seed imports by China could result in levies being imposed on the crop, which would have a “meaningful impact on global canola trade flows” and Canada’s grain handlers.

The announcement of the investigation Tuesday came after Ottawa moved to impose tariffs on Chinese electric vehicles (EVs), following the lead of both the U.S. and the European Union. That 100 per cent tariff was put on Chinese EV imports, along with a 25 per cent tariff on imported steel and aluminum from China.

The federal government says the tariffs are aimed at protecting Canadian jobs, but the agricultural sector has said it may pay the price. Farmer John McKee told Global News earlier this week that the market price for canola in southern Alberta dropped by nearly a dollar following the announcement.

Ian Boxall, president of the Agricultural Producers of Saskatchewan, told Global News it’s the farmers who will be hit the most.

“It’s been the one that farmers have grown that makes the most money, it’s wanted around the world, the demand for it is high,” he said.

“Even though the price of canola’s down, consumers at the grocery store are not going to see a reduction in margarine… it’s only the farmer that’s going to feel the hit…. So China, again for the third or fourth time, has attacked canola because they know it hits close to home.”

In 2023, the report notes Canada exported close to $5 billion worth of canola products to China, citing Chinese customs data showing that more than 90 per cent of the country’s canola product imports last year were from Canada.