As Canada ramps up investment in its electric vehicle (EV) and battery manufacturing industries, the Canadian Federation of Independent Business (CFIB) is warning that the policy shift may have serious unintended consequences—particularly for agriculture and the machinery sectors that support it.
In a recent letter addressed to Ministers Kody Blois (Agriculture), Dominic LeBlanc (Trade), and François-Philippe Champagne (Finance), the CFIB emphasized that EV subsidies and tariff policies are putting Canadian agri-businesses at a disadvantage—especially in light of retaliatory tariffs from China. These include 100% tariffs on Canadian canola oil and peas and 25% on pork and seafood, directly impacting both producers and the broader agricultural value chain.
For Canada’s agri-food sector—which depends heavily on specialized machinery for everything from planting to processing—such disruptions are not just economic, but operational. Many small and medium-sized enterprises (SMEs) in agricultural manufacturing, including those that build and export harvesting, milling, and food-processing equipment, are being squeezed as trade barriers reduce demand and increase uncertainty.
“While supporting domestic EV production is a forward-looking strategy, the question remains whether prioritizing subsidies to multinationals—many of whom are pausing investments—is the best path forward, especially when our agriculture and machinery industries are being collateral damage in a trade war,” the CFIB noted.
With over $62 billion pledged to large automakers, the CFIB argues that these funds might be more equitably distributed across sectors—particularly to Canadian manufacturers producing machinery critical to food security and rural economies. Many of these companies operate on tight margins and rely on export markets like China, where new tariffs are now eroding competitiveness.
In a recent member poll, 35% of CFIB’s agricultural businesses reported that Chinese tariffs are already hurting their bottom line. Beyond trade, businesses also expressed frustration over domestic challenges: 80% want regulatory costs reduced, and 79% are calling for tax relief—both of which impact machinery manufacturers and agribusinesses alike.
The CFIB represents over 100,000 SMEs, including more than 5,200 in agriculture—a sector increasingly reliant on precision farming equipment, automation, and sustainable processing solutions. These technologies, often developed by Canada’s manufacturing base, are at risk when global trade access is disrupted.
“The government needs to refocus its attention on supporting Canada’s agri-industrial backbone,” said Jasmin Guénette, CFIB’s Vice-President of National Affairs. “A healthy agriculture sector depends on a healthy machinery sector—and both must be protected in any industrial strategy.”
As policymakers continue shaping Canada’s green industrial future, industry leaders are calling for a more holistic approach—one that balances EV innovation with the essential needs of Canada’s agriculture and machinery sectors.
