Farmers call govt to take action against Chinese canola tariffs

Saskatchewan farmers braced themselves for a major hit after China announced plans to impose a nearly 76 percent tariff on Canadian canola, which started on Aug. 14, effectively shutting the door on one of the crop’s biggest markets.

Saskatchewan’s Premier Scott Moe is calling on Ottawa to take “immediate action” to protect the canola industry in the face of massive Chinese tariffs.

Experts say this could be devastating for farmers and could close off a large chunk of the market. Shaun Haney, founder and CEO of RealAgriculture, joins the Evan Bray Show on Aug. 13 to break down what this means for farmers and the industry and what the government needs to do to help.

Listen to the full interview with Haney, or read the transcript below:

The following questions and answers have been edited for length and clarity.

BRAY: So what is your initial reaction, the 75.8 per cent anti–dumping tariff on Canadian canola?

SHAUN HANEY: I heard Canadian Canola Growers Association (CCGA) CEO Rick White yesterday say in an interview, the tariff was expected, unfortunate, but expected. This investigation by China has been going on for a year. China is claiming that Canada is unfairly subsidizing, supporting, and encouraging the increased supply of Canadian canola, which is really hurting the domestic rapeseed industry in China.

We can all smirk about that, but that’s what they’re claiming. Now, let’s be honest, this is all related back to those electric vehicle tariffs that Canada applied to China last fall, a tariff on meal and oil coming out of Canada as well. So this is just an escalation for China and Canada relations.

Let’s talk about the 100 per cent tariffs that hit in March. You just mentioned oil meal. Compare for us the magnitude of what we’re seeing, nearly 76 per cent on canola seed. How does that compare to what we’ve already been living with in the last few months?

HANEY: China is saying, in the meantime, we really don’t need Canadian canola in the form of seed oil or meal. Chris Davison, who is the CEO of the Canola Council of Canada, said to RealAgriculture yesterday that you know this essentially shoots Canadian canola out of the Chinese market. China’s doing the same thing with our soybeans, just a little bit differently.

China’s importation of American soybeans is down 50 per cent in the first six months of the year compared to the same period in 2024, which is down in July as well. In that case, they just said no to buying and applying tariffs. It’s essentially the same result. And they are looking to pull their oilseed requirements out of South America. That’s a big issue for not only canola growers in Saskatchewan, but if you’re growing soybeans in North Dakota. This is where we are at currently, which is a real concern. We saw what happened with canola futures yesterday, with major price declines already. On top of the fact that the U.S. corn crop is massive, as reported by the U.S. Department of Agriculture. There’s a lot of pressure right now on these commodity prices here as we head into the new crop year.

What is the actual impact on the farmer who’s got fields in front of them? What are the possible scenarios to play out here?

HANEY: More reliance on the U.S. market is probably the main thing. We’ve seen a pretty dramatic increase in canola exports to the U.S. in the past couple of years. Of course, we’ve got some trade issues with the U.S., we’re trying to work them out. But the biofuel policy in the U.S. has been very North American-oriented here in the past six months, which is encouraging. There needs to be some improvements, but it has gone more positive as of late.

There’s a made-in-Saskatchewan story related to that, which is to do with biofuels, and things like renewable diesel and sustainable aviation fuel. We’re seeing that kind of infrastructure being built in Regina as we speak. This is a reminder that the move and the policy to encourage renewable diesel and the SAF is really a diversification strategy away from being reliant on the Chinese market, because we’re crushing canola domestically in Canada.

We saw a depression in the prices of canola instantly yesterday, after the announcement. Are farmers waiting to sell, but then storage becomes an issue?

HANEY: That’s a marketing decision that producers are faced with all the time. I don’t know the percentage of canola that is actually sold directly off the combine. Every producer is going to be handling that a little bit differently. For the producers that maybe did some hedging earlier before, this is just because the market is risky. In general, they’re probably feeling a little bit better about themselves. That’s not everybody, because there is some carryover from the 2021 drought, where people had booked contracts and then, they didn’t meet some of those targets because the yields were so terrible.

When a lot of people wait for harvest before they start to do some of that pricing, it is going to put some pressure on storage. It is also a test of the strength of the balance sheet and your ability to hold on. It’s not just about storage. You may have to pay some bills, and then you’re forced into a sales situation to create some cash flow. Every farm is going to be different on that front but those are some of the things that are definitely being those are some of the things that are definitely being discussed in some of the tractors here today.

We saw Premier Scott Moe come out very strong, demanding the federal government for action, not only on striking a deal with China, whether it’s dropping the EV tariffs, or striking some sort of trade deal, but also putting together a package, like they have done for other industries affected by tariffs, for agriculture. Do we expect to see something like that roll out in the next week?

HANEY: There are a couple of reasons for that. The EV tariffs weren’t just something the Canadian government dreamt up to protect the Canadian auto industry, although that may be one of the results of it. This came from the Biden administration working with the U.S. to try to keep Chinese EVs out of the North American market, and that sentiment has not changed during the Trump administration, as people have been paying attention to the mainstream news.

Removing those EV tariffs is a complicated decision for Canada. Will there be compensation to producers? I’m kind of doubtful, because if you look at when in March, when those 100 per cent tariffs were put on meal and canola oil, there was a lot of call for compensation. The market dipped, and then shortly thereafter, it was higher than the price on that Friday. It’s not going to be an immediate thing. If there is compensation, it’ll be months down the road because I think they’re going to let the ground settle. We have a meeting between President Xi and President Trump coming up here in the fall. We know that at some point, we’re going to see Prime Minister Carney sitting down with President Xi of China as well.

I’m hearing from so many farmers who listen, call in, text into the show that AgraStability adjustments are not enough. 

HANEY: The cap was increased in the July Federal, Provincial and Territorial Ministers (FPT) virtual meeting. The timing for this in-person meeting in September is one of the positives. So this topic will be on the docket. We’ll see if they make further adjustments to the 2025 AgriStability program. And they’ll also be talking about changes that need to be made for 2026. It will probably start with making adjustments to AgriStability, whether they go ad hoc or not, in terms of some other program that has yet to be determined.