On September 25, 2025, the debate over the future of Canada’s automotive industry reached a boiling point as Unifor, the country’s largest private-sector union, urged the federal government to maintain its 100% surtax on electric vehicles (EVs) imported from China. The union’s plea, submitted as part of the government’s Section 53 China Electric Vehicle Surtax Review, comes at a pivotal moment for Canadian auto workers and manufacturers, who are grappling with layoffs, plant idlings, and mounting international competition.
"Canada’s auto industry is facing an existential crisis, with U.S. tariffs threatening current and future product investments, including electric vehicles," Unifor National President Lana Payne declared in a statement widely reported by Canadian Manufacturing and other outlets. "Lifting tariffs on China will make a bad situation far worse, if Canada becomes a dumping ground for cheap, unfairly subsidized imports."
Unifor’s submission paints a stark picture. The union argues that competition from Chinese automakers—who, they say, benefit from massive state subsidies, labor rights abuses, and coal-powered production—poses an immediate threat to Canadian jobs and the country’s automotive supply chain, particularly in the steel and aluminum sectors. Since 2020, Canada has worked hard to position itself for growth by securing investments in vehicle assembly, battery manufacturing, and critical mineral processing. But these hard-won gains, Unifor warns, are now at risk.
Recent disruptions have already shaken the industry. U.S. tariffs on Canadian-built vehicles, policy rollbacks on EV supports, and a surge in Chinese import penetration have combined to create a perfect storm. As of August 2025, one-third of Unifor’s members at Detroit Three facilities in Canada are on layoff, with three assembly plants sitting idle. "At a time when auto workers are facing layoffs and uncertainty, lifting the surtax would be nothing short of a self-inflicted wound," Payne said, echoing the union’s deep concern for its members’ livelihoods.
The numbers are sobering. According to Unifor’s data, the layoffs and plant closures are not isolated incidents, but symptoms of a broader malaise threatening the entire sector. The union’s submission to the government review underscores that unfair competition from Chinese automakers, supported by state intervention and questionable labor practices, has the potential to upend Canada’s automotive future. The ripple effects, Unifor argues, could extend far beyond assembly lines, impacting related industries like steel and aluminum, both of which are integral to the country’s manufacturing ecosystem.
Unifor’s recommendations to the federal government are clear and specific. First, the union wants the existing 100% surtax on imported Chinese EVs maintained for an additional 24 months. Second, it urges that surtaxes be extended to strategic EV and battery-related components, a move aimed at closing loopholes that might allow Chinese firms to bypass the tariff by exporting parts instead of finished vehicles. Third, Unifor calls for the reinstatement and expansion of federal EV rebate programs—but with a twist: these incentives should be conditioned to prioritize Canadian- and North American-built vehicles, ensuring that public funds support domestic industry. Finally, the union presses for stronger enforcement against goods produced with forced labor, highlighting concerns about human rights abuses in global supply chains.
"Workers have done everything asked of them to build Canada’s auto industry for the future," Payne emphasized. "Now it’s time for government to stand firm, defend our industry, and ensure our net-zero future is made in Canada with good, union jobs at its core." The message is as much about social and economic justice as it is about industrial policy; Unifor’s advocacy links the fate of auto workers to broader questions about fairness, sustainability, and national resilience.
Canada’s position on the China EV surtax is further complicated by developments south of the border. The United States currently maintains combined tariffs of 127.5% on Chinese EVs and is preparing to introduce restrictions on Chinese "connected car" technology by 2027. Mexico, meanwhile, recently raised its tariffs to 50% in response to a surge of Chinese imports that now account for 70% of its EV market. In this context, Unifor stresses the importance of Canada remaining aligned with its CUSMA (Canada-United States-Mexico Agreement) partners. "There is no strategic advantage for Canada to go it alone," Payne argued. "We need to work constructively to protect North American auto jobs and supply chains."
The union’s stance is not just about tariffs. It is also a call for a coordinated North American strategy to safeguard the continent’s automotive future. With the U.S. and Mexico taking strong measures to shield their own industries, Unifor warns that Canada risks becoming a "dumping ground" for Chinese EVs if it acts unilaterally. The union’s insistence on alignment with CUSMA partners is as much about economic pragmatism as it is about solidarity.
Since 2020, Canada’s automotive sector has seen a wave of new investments, particularly in EV assembly, battery production, and the processing of critical minerals—resources essential to the green transition. These investments have been touted by policymakers as proof that Canada can compete in the global race to electrify transportation. Yet, as Unifor’s submission makes clear, these gains are fragile. The combination of external shocks—U.S. tariffs, shifting policy priorities, and the aggressive entry of Chinese automakers—now threatens to undo years of progress.
Unifor’s advocacy also speaks to the broader challenges facing labor unions in an era of globalization and technological change. Representing 320,000 workers across every major sector of the Canadian economy, the union has positioned itself as a defender of not only its members but also of the principles of fair competition and social justice. The current fight over Chinese EV imports, then, is about more than just jobs—it is about the kind of economy Canada wants to build in the coming decades.
For now, the ball is in the federal government’s court. The Section 53 China Electric Vehicle Surtax Review will determine whether Canada continues its current protectionist stance or opens the door to increased competition from abroad. Whatever the outcome, the stakes could hardly be higher for the country’s auto workers, manufacturers, and the communities that depend on them.
With the industry at a crossroads, Unifor’s message is unmistakable: the future of Canadian auto manufacturing—and the livelihoods of thousands—hangs in the balance.
