Quota for Chinese EV imports

Summary#

The Order Amending the Import Control List (2026-1) adds certain electric vehicles from the People’s Republic of China to Canada’s controlled-import list and replaces the previous 100% surtax with a permit‑managed quota. The order took effect on March 1, 2026 and sets an initial annual quota of 49,000 vehicles that will grow by 6.5% each year.

What it does#

• Adds Chinese-origin electric passenger and other specified vehicles to the Import Control List, so they may only enter Canada with a shipment-specific permit.
• Repeals the 100% surtax that had applied to EVs from China and sets the normal Most-Favoured-Nation tariff at 6.1% on allowed imports.
• Creates an annual quota:
  • 49,000 vehicles in year 1, increasing by 6.5% each year.
  • A portion of the quota is reserved for EVs with a free-on-board price of $35,000 or less. That reserve starts at 10% in year 2 and rises to 50% by year 5.
• Permit applications may cost up to $31 per permit. Multiple vehicles can be covered by a single permit.
• Global Affairs Canada will issue permits and manage allocations. The Canada Border Services Agency will enforce the permit requirement at the border.
• The government says quota details, allocation rules and application steps will be published on Global Affairs Canada’s website.

Who's affected#

• Importers and distributors who bring EVs into Canada from the People’s Republic of China.
• Auto dealers and consumers looking for lower-priced EV models, especially those under $35,000.
• Canadian automakers and parts suppliers who compete with or may partner with Chinese firms.
• Farmers and seafood exporters: the government expects changes in China’s tariffs on things like canola seed and other agricultural goods (see Why it matters).
• Small businesses are not expected to be the main applicants for these permits, according to the government.
• It is not fully clear from the order how quota allocations will be divided among importers or how quickly permits will be issued once the annual quantity is reached.

Why it matters#

• Consumers: the quota and reserved share for lower-priced models could increase the number of affordable EVs on the Canadian market over time. The initial quota is relatively small — under 3% of new vehicle sales — so effects will start modestly.
• Industry and jobs: the government says the change could encourage Chinese investment and joint ventures in Canada’s EV supply chain and support domestic EV manufacturing jobs.
• Trade: replacing the surtax with a quota is part of a preliminary arrangement with China. As a result, Canada expects China to lower tariffs on some Canadian canola seed to about 15% (down from around 85%), improving access for roughly $4 billion in canola seed exports and helping market access for an additional roughly $2.6 billion in agricultural and seafood goods.
• Government revenue and costs: tariff revenue from the 6.1% tariff on quota imports is expected to exceed $100 million annually. The earlier 100% surtax produced about $2 million in net revenues while it was in place. Administrative costs for permits are estimated at about $8,700 per year in total.
• Environment: broader access to EVs could support higher EV adoption and lower emissions, according to the government.
• Uncertainty remains about allocation details and how the quota will be applied in practice. The arrangement will be reviewed after three years, per the government.