With Canada now facing a trade war on two fronts, Alberta grain farmer Tara Sawyer feels a bit like cannon fodder.
“They’ve turned us into political pawns. We’re paying the price,” said Sawyer, who’s also chair of the Grain Growers of Canada.
This week, China slapped a 100 per cent tariff on imports of Canadian canola oil and canola meal, saying it was retaliation for Canadian tariffs on Chinese electric vehicles, steel and aluminum.
That would have been a painful hit for canola farmers at the best of times, given that China is the second-largest export market for Canadian canola. The largest is the United States, which is scheduled to impose across-the-board tariffs on Canadian imports April 2.
For Sawyer, a fourth-generation farmer whose family has been working the land in Acme, Alta. since 1903, dealing with some uncertainty — like weather, or market prices for crops — is a fact of life. But the trade war sparked by U.S. President Donald Trump — and exacerbated this week by China’s tariffs — has added a new depth of anxiety for her peers, said Sawyer.
“It’s all out of our control. We’re taking the hit, but it’s out of our control,” said Sawyer, who grows canola, wheat and barley. “Every generation has something to contend with, but we’ve never seen this. It’s a devastating impact. This is beyond horrible.”
The Canadian government likely made a calculated decision when imposing tariffs on Chinese EVs and metal in the fall, said trade lawyer John Boscariol: protecting the nascent Canadian EV industry, and cosying up to the increasingly belligerent U.S., was more important than canola farmers.
“I don’t think they would ever admit that they prioritized one industry over another, but it can’t be a surprise to them that China retaliated in this way,” said Boscariol, head of the international trade practice at McCarthy Tetrault.
The 100 per cent tariffs on Chinese EVs and 25 per cent tariffs on Chinese steel were partly aimed at placating the U.S., and keeping Canadian access to the American market, Boscariol said.
“It was to demonstrate to the U.S. that we’re on the same team when it comes to China,” said Boscariol.
Being effectively shut out of China — the world’s second-biggest economy — at the same time as businesses are being encouraged to diversify away from the U.S. is a near-impossible situation for canola farmers, said Chris Davison, president and CEO of the Canola Council of Canada (CCC).
“Markets the size of the U.S. and China don’t grow on trees,” said Davison. “The U.S. and China are our No. 1 and No. 2 markets.”
Last year, according to CCC data, Canada exported $7.7 billion worth of canola products to the U.S. and just under $5 billion to China. Of Canadian canola sent to China, roughly $1 billion was in oil and meal form, while the other $4 billion was canola seed. Canadian canola seed hasn’t been tariffed yet, but is currently the subject of an anti-dumping investigation by China.
With on-again, off-again tariff threats this year, the price farmers get for their canola has already been dropping. On Feb. 20, according to data from Alberta Grains, canola seed from the Peace River region straddling the Alberta-B.C. border was selling for $628.46 per ton. On March 19, that same ton was selling for just $540.32.
That drop comes as prices of supplies is on the rise, Davison added. And it also makes it difficult for farmers to do much planning with any kind of confidence.
“The tariffs increase uncertainty in all facets of the industry. That makes it harder to plan,” said Davison.
Hanging on to their product until prices come back up isn’t a realistic option, said Sawyer.
“There probably isn’t space to store it, and you’ve also got costs to cover. Can you really afford not to sell it, even if the price is low?” said Sawyer, adding that she wouldn’t be shocked if the trade war puts some canola farmers out of business.
“It could happen. We’ve had some very difficult years, with high input costs, and poor yields from weather,” Sawyer added.
For now, Sawyer is hoping that tariffs get lifted, and if not, that governments at all levels try to support canola farmers any way they can.
“We don’t hear governments talking enough about what agriculture brings to the table. We’re feeding the world,” said Sawyer, who bears no ill will toward the EV industry.
“This is not a one industry over the other conversation. I’m just saying let’s not forget about agriculture.”
