After Foreign Affairs Minister Mélanie Joly visited China in July in an effort to thaw relations, Wang Yi, her counterpart in Beijing, said they had discussed the “difficulties and twists and turns” in the countries’ dealings, and that his government wanted to “inject momentum into the restoration” of normal ties.
The countries then proceeded to trade more twists and turns: Ottawa’s decision to impose a 100-per-cent tariff on Chinese-made electric vehicles was countered with the threat of a ban on imports of Canadian canola oil. More on that below.
Up top
In the news
Out of gas: Parkland Corp. accelerated plans to raise cash from asset sales by putting its gas stations in Florida on the auction block, the latest planned divestments from a Calgary-based company facing activist campaigns from its shareholders.
Cashing in: Canadian Western Bank shareholders have overwhelmingly voted in favour of a sale of the company to National Bank of Canada at a special meeting yesterday.
Corus gets more time: Corus Entertainment Inc., which owns Global News as well as dozens of television and radio stations across Canada, has been given another six weeks to solve its debt crisis.
Pushback on a pipeline: The Kispiox Band Council in British Columbia is seeking a judicial review of the provincial energy regulator’s decision to approve construction of a natural gas pipeline project on the Nisga’a Nation’s territory.
Happening today
- The Bank of Canada’s lending-rate announcement is at 9:45 a.m. ET. We’ll have live coverage here.
- The U.S. Federal Reserve releases its Beige Book, a summary of regional economic conditions published eight times a year and two weeks before the Fed’s policy meeting.
- After markets close, Alimentation Couche-Tard Inc. reports earnings amid news that it’s trying to buy the Japanese parent company of 7-Eleven.
- Also up today: Descartes Systems Group Inc., Dollar Tree Inc. and Hewlett Packard Enterprise Co.
In focus
A ‘made-in-Canada’ crop under threat
Storm clouds build over a canola field near Cremona, Alta., last month.Jeff McIntosh/The Canadian Press
A tax for a tax
The Chinese government said it is launching an anti-dumping probe into Canadian canola imports, almost two weeks after Ottawa’s imposition of tariffs on Chinese electric vehicles.
Beijing said the probe is a response to “unilateral restrictive measures targeting imports from China.” In a statement, the government said it is ”strongly dissatisfied” with Ottawa’s decision last week to implement a 100-per-cent tariff on Chinese EV imports.
Not everyone in Canada agreed that following in the footsteps of the United States, which announced a 100-per-cent tariff on Chinese EVs earlier this year, was the right approach.
One expert wrote in our pages: “By sassing off and carbon copying the U.S.’s approach,” the federal government has “irresponsibly ushered in unnecessary risks while missing a leadership opportunity.”
Canola’s growing role in Canada’s economy
The Chinese Commerce Ministry said imports of Canadian canola had risen 170 per cent year-over-year amid a “continuous decline in prices,” which it said is evidence of potential dumping behaviour, Asia correspondent James Griffiths reports.
- Dumping is a form of international price discrimination, where the price of a product when sold in the importing country is less than the price of that product in the market of the exporting country.
The threat of a ban on Canadian imports of canola, also known as rapeseed, would represent a major blow to farmers and businesses, especially on the Prairies.
Sector snapshot
- The crops are grown by about 40,000 Canadian farmers who produce about 20 million tonnes a year.
- The Canola Council of Canada said the crop’s contribution to the country’s economy has increased by $7.2-billion, or 35 per cent, in the last 10 years.
- The canola sector contributes an annual average of about $29-billion to the country’s economy.
- Canola, a “made-in-Canada success story,” has quickly grown to become Canada’s third-largest export to China after coal and oil.
We’ve been here before
Beijing suspended imports from two of Canada’s largest canola exporters in 2019 amid escalating political tensions after the arrest of Huawei’s Meng Wanzhou.
- Between March, 2019, and August, 2020, the Canola Council of Canada estimated the suspensions cost the industry between $1.5-billion and $2.3-billion.
- In the years leading up to the 2019 decision, China imported $2.8-billion worth of Canadian canola annually – amounting to about 40 per cent of Canada’s exports of the crop.
A cloudy future for Canadian farmers
The possibility of a ban on canola comes as farmers in the Prairies are already grappling with massive increases in the price of farmland.
- Not even two decades ago, prices were on average less than $1,000 per hectare, according to Farm Credit Canada’s historical farmland values report.
- Last year, they were about $7,410 a hectare. Prices in Saskatchewan rose 15.7 per cent in 2023, the highest increase in Canada that year.
- Values in Manitoba and Alberta are also within that range, the report shows.
🍎 Recommended reading: In B.C.’s Okanagan Valley, apple growers are struggling to keep pace with big-scale fruit farming.
A final word on canola
It’s actually a mashup of two words: Canada (where it was developed) and ola (referring to oil). I think that means saying “Canadian canola oil” would be like saying “Canadian Canadian oil oil.”
Callout
Mortgage shoppers: We need your help
Have you recently gotten a great deal on a mortgage rate from one of the big banks? Whether you bought a new home or renewed your mortgage, we’d love to hear about it. If you’re up for an interview and having your name appear in The Globe and Mail for an upcoming article, please reach out to reporter Erica Alini: ealini@globeandmail.com
Morning markets
Global markets sunk as weak U.S. economic data fuelled concerns of an imminent slowdown and tech stocks were hit amid a record selloff for AI chipmaker Nvidia. Wall Street and TSX futures pointed lower.
Overseas, the pan-European STOXX 600 was down 1.04 per cent in morning trading. Britain’s FTSE 100 gave back 0.58 per cent, Germany’s DAX declined 0.83 per cent and France’s CAC 40 retreated 0.97 per cent.
In Asia, Japan’s Nikkei closed 4.24 per cent lower, while Hong Kong’s Hang Seng dropped 1.1 per cent.
The Canadian dollar traded at 73.78 U.S. cents.