Canola plants bloom in a pasture on a farm near Cremona, Alta., Friday, July 18, 2025. Politics at play with the China trade war.
Canadian farmers are bracing for tough months ahead as Chinese tariffs on canola continue to push down prices of one of the nation’s most valuable crops. The sudden trade clash has left growers facing mounting losses and difficult decisions about next year’s planting season.
Millions Lost in Just Weeks
Market analyst Chuck Penner of LeftField Commodity Research says the hit has already been severe. While futures prices have dipped only slightly, the actual cash price — known as the basis — has dropped sharply.
He estimates farmers have lost at least $140 million in just two weeks. Since March, when Beijing imposed a 100 per cent tariff on Canadian canola oil and meal, those losses have ballooned to $800 million.
“Farmers don’t like it, and they feel like they’re being sacrificed to support eastern Canadian industries, whether that’s true or not,” Penner said.
Tariffs Escalate in Trade Dispute
The pressure on farmers intensified after China slapped a 75.8 per cent tariff on Canadian canola seed in August. That move followed Ottawa’s decision to apply a 100 per cent tariff on Chinese electric vehicles.
The trade war is now weighing heavily on Prairie farmers, many of whom rely on canola for income. Canola is Canada’s second-largest crop export, behind only the United States as a buyer.
Crop Decisions Clouded by Politics
Despite the turmoil, farmers are expected to continue planting canola next year. But the scale will depend on both markets and crop rotation practices. Producers rotate oilseeds, cereals, and pulses over three years to preserve soil health.
“You can’t just stop growing one crop altogether,” Penner explained. “Farmers have seen low prices before, but usually because of supply and demand — not abrupt trade decisions.”
Without the trade dispute, he added, producers would be able to plan with far more confidence.
Canola’s Importance to Canada
Canola is one of the country’s most profitable but also most expensive crops to grow. The Canola Council of Canada says the sector added $43 billion to the national economy last year and employs about 200,000 people.
Chris Davison of the council said the industry is determined to protect that contribution. “We’re doing everything possible to keep markets open and demand for Canadian canola strong,” he said.
This year’s crop is expected to be larger than last year’s. Davison warned that if harvest volumes exceed expectations, the lack of demand caused by tariffs could make things even harder.
Calls for Ottawa to Act
Political leaders in Alberta and Saskatchewan have urged Ottawa to reconsider its electric vehicle tariffs on China. They argue lifting them could ease pressure on farmers.
Davison echoed that political negotiations are key. “These are political issues that need political solutions,” he said.
China has until September to issue a final ruling on its anti-dumping investigation into Canadian canola, though the deadline could be extended by six months.
History Repeats, But With Higher Stakes
This isn’t the first time Canada’s canola industry has been caught in political crossfire. In 2019, China restricted imports after Canada detained Huawei executive Meng Wanzhou. Trade resumed in 2022 once diplomatic tensions eased.
“This time, the tariffs are broader,” Penner said. “Farmers and the industry are once again at the mercy of politics, with little control over the outcome.”
