Canada will not require any of the Chinese-built EVs entering the country over the next 12 months to meet the affordability threshold that Prime Minister Mark Carney used to sell the trade deal to consumers, according to final regulations published in the Canada Gazette on March 11.
The provision for vehicles with import prices below C$35,000 — which Carney’s government framed as kickstarting the availability of more affordable EVs when the deal was struck in Beijing in January — does not take effect until the 2027 quota year.
“With this agreement, it is also anticipated that, in five years, more than 50% of these vehicles will be affordable EVs with an import price of less than C$35,000, creating new lower-cost options for Canadian consumers,” the PM’s office said on January 16.
The stepping schedule ramps slowly: 10% of the quota must be priced below C$35,000 in 2027, rising to 20% in 2028, 35% in 2029, and 50% by 2030.
Quota years run from March through February.
The regulations govern import price at the border, not what consumers pay at dealerships — meaning Ottawa has no mechanism to ensure the affordability requirement translates into lower retail prices.
3 Years of Premium Imports
The practical effect is that for the first three quota years — covering March 2026 through February 2029 — the average affordable requirement will be just 10%.
Chinese automakers face no pricing constraint whatsoever in year one and only a modest one in years two and three.
That creates a window for manufacturers to prioritise higher-margin models.
Tesla has already cleared its Canadian Model 3 inventory in anticipation of resuming Shanghai-built imports — vehicles that previously retailed at roughly C$55,000 in Canada.
Polestar and Volvo, both Geely-owned with established Canadian dealer networks, are similarly expected to be among the first to secure permits for premium vehicles.
Among Chinese-headquartered brands, BYD has registered vehicles with Transport Canada from its Shenzhen and Xi’an factories.
Three major Chinese automakers — BYD, Chery, and Geely — are confirmed to be preparing for Canadian market entry by end of 2026. Whether any will prioritise affordable models in the absence of a regulatory requirement is unclear.
The Affordability Gap
When Carney announced the agreement during his January state visit to Beijing, the government said it anticipated that ‘more than 50% of these vehicles will be affordable EVs with an import price of less than $35,000’ within five years.
That figure is now confirmed as the endpoint of a graduated ramp, not a near-term commitment.
The lowest-cost EV currently on sale in Canada is the Kia EV4, which starts at C$42,185.
The average transaction price for an EV in the country was C$57,600 in 2025, according to J.D. Power data cited by Automotive News.
China-built vehicles are ineligible for Canada’s relaunched Electric Vehicle Affordability Program, which offers rebates of up to C$5,000 only for vehicles produced domestically or in free-trade partner countries.
Quota Mechanics
The 49,000-unit annual quota — which matches annualised Chinese EV imports in the period before the 100% surtax was imposed in 2024 — will grow by 6.5% each year, adding approximately 3,200 vehicles annually and reaching 70,000 by 2030.
The quota covers battery-electric, hybrid, and plug-in hybrid vehicles.
Ottawa opened the permitting process on March 1, allocating the first 24,500 permits on a first-come, first-served basis through August 31.
The second tranche of 24,500 — plus any unused first-half volumes — opens September 1, with Global Affairs Canada indicating it will consult on whether to adjust the allocation method for the second period.
Political Context
The regulations land as the deal faces sustained opposition.
Canada’s Conservative Party has challenged the agreement on both economic and national security grounds.
Shadow industry minister Raquel Dancho called the arrangement ‘frankly incomprehensible’ and raised concerns about surveillance capabilities in Chinese-made connected vehicles, while the party has passed a motion at the House of Commons Industry Committee to study the issue.
Ontario Premier Doug Ford has called the deal a ‘knee jerk reaction’ and warned it gives China a ‘foothold’ in the Canadian market.
Unifor, Canada’s largest private-sector union, called it a self-inflicted wound to a domestic auto sector already contending with US tariff pressure and GM production reductions in Oshawa.
US Trade Representative Jamieson Greer described the deal as ‘problematic’ when it was announced, while Magna International steered clear of the Chinese joint ventures Ottawa has been encouraging, signalling that the government’s goal of attracting manufacturing investment within three years faces scepticism from the industry it is trying to court.
Ottawa has separately pushed Industry Minister Mélanie Joly to use the deal as leverage for Chinese EV joint ventures that would supply global markets from Canadian plants.
