Tariff Cut for E-Bike Lithium Batteries

Summary#

The Order Amending the Schedule to the Customs Tariff changes how one tariff entry is described in Canada’s tariff schedule. The accompanying regulatory statement says the change removes a 7% tariff on lithium‑ion batteries imported for use in making electric bicycles. The order was registered on August 7, 2026 and published in the Canada Gazette on August 26, 2026; the source text contains slightly different wording about the precise day it comes into force.

What it does#

• Amends Tariff item No. 8507.60.20 by replacing the phrase “electrically‑powered motorcycles” with “motorcycles or cycles with an electric motor.”
• According to the document’s Regulatory Impact Analysis Statement, the practical effect is to eliminate a 7% tariff on imported lithium‑ion batteries when they are used as input parts in the production of electric bicycles in Canada.
• States that electric bicycles themselves already enter Canada tariff‑free, and that the change is meant to lower production costs for domestic e‑bike makers.
• Notes consultations by the Department of Finance found no domestic battery supplier meeting the needed specifications.
• Administration and enforcement are to be handled by the Canada Border Services Agency.

Who's affected#

• Canadian companies that make electric bicycles and import lithium‑ion batteries for assembly. They are the main intended beneficiaries.
• Importers and distributors of electric bicycle batteries.
• Battery manufacturers and industry associations consulted by the government; domestic battery suppliers could be affected if they later meet the required specifications.
• The federal government may see a small loss of tariff revenue.
• It is unclear from the order text alone whether the wording change to the tariff item will have broader effects on other electric two‑wheel vehicles beyond what the regulatory statement describes.

Why it matters#

• Removing the 7% tariff on batteries used in e‑bike production should lower manufacturers’ costs. That can make Canadian‑assembled e‑bikes more competitive and could lead to lower prices or more local production.
• The change targets a specific input good rather than finished e‑bikes, so it addresses a supply‑chain cost for domestic makers.
• The government expects minimal fiscal impact. The Canada Border Services Agency will update stakeholders about how the change is applied.
• Because the official order text and the regulatory statement emphasize slightly different wording and timing, anyone directly affected should check the full Canada Gazette notice or contact the Department of Finance or CBSA for exact legal and operational details.