Farmers woke up to good news Friday morning, when Canada and China announced a deal that includes reducing or exempting agricultural products from Canada.
As part of the new strategic partnership with China, a preliminary agreement-in-principle was made to reduce tariffs on canola seed to 15 per cent, effective March 1, 2026.
"This will significantly improve market access for approximately $4 billion of Canadian canola seed exports to China annually" according to background information released by the federal government.
In addition, Canada expects tariffs on canola meal, peas, and seafood including lobsters and crabs will no longer be subject to tariffs from March 1 to the end of this year.
In exchange for the reduction of tariffs on agri-food products, Canada will allow an initial country-specific quota of 49-thousand electric vehicles per year at a tariff rate of 6.1 per cent. The federal government says this amount will make up less than three per cent of the market for new vehicles sold in Canada.
Canada will also extend to the end of the year a remission of tariffs for certain Chinese steel and aluminum products. This move will take effect March 1 and is retroactive to January 1, 2026.
Prime Minister Mark Carney called the 85 per cent reduction in canola seed tariffs "enormous progress."
"And that's going to create an opportunity combined between (canola) meal and seed, a seven billion dollar market opportunity." Carney said.
He also described the agreement with China as "a new partnership", "a new era", and a "historic agreement".
"That creates a series of expectations about where we're going from here, whether it's in canola, other grains, pulses, you know, lobster, beef, pork, pet food, all these are covered. So there's movement and…it's a return and actually more than a return to Canada as an important agriculture partner with China."
Canola oil and pork were not mentioned in the agreement, but Ottawa says it expects China to accelerate exports of "Canadian beef, pet food, animal genetics, and other products to China."
This is part of efforts to increase Canadian exports to China by 50 per cent by the year 2030.
Farm groups praise work on reducing tariffs
Groups such as the Agricultural Producers' Association of Saskatchewan (APAS) and Sask Oilseeds, among others, are all calling the overnight development a relief for farmers and a positive step towards fully restoring market access.
President of APAS Bill Prybylski called the lack of a tariff reduction on canola oil "ironic", given the increased crush capacity in Saskatchewan.
"It's somewhat concerning that the tariffs remain for the canola oil going into China, but we're hoping that it's still on the table and there will be further discussions that will lead to some sort of an agreement on that front." said Prybylski.
He also applauded Premier Scott Moe, who joined Carney for the trade mission, for his contributions in getting the tariffs reduced.
Moe said in a statement Friday morning the trade deal to reduce tariffs on canola and other products "is very good news for Canada and Saskatchewan."
Moe also said it "demonstrates the importance of foreign trade missions and shows what can be achieved when the federal and provincial governments and our export industries work together to strengthen our trade relationships."
Chair of SaskOilseeds Dean Roberts says whether the new rate of 15 per cent on canola seed is workable depends on how the market responds.
"Obviously, we would have preferred to see zero, but 15 is quite a bit less than 100, so at this point we'll see what the market does with it." said Roberts.
The announcement follows months of work on the federal and provincial levels, which Roberts says can test producers' patience after some time of seemingly little to no progress.
"And it starts impacting multiple crop years to get a deal done, not only '25-26, so it's nice to see progress now and a deal before we go into seeding."
Asked whether canola acreage would be been impacted if nothing happened, Roberts said it's debatable.
"There's a much bigger discussion to be had there about farm profitability and margin squeeze right now. Fertilizer prices are eye-watering, margin compression is a thing, and there would have been a debate about what to seed next year. I know on our farm it was getting really hard to find a path forward that wasn't red ink, so this is welcome news. Hopefully, as I refresh my crop plan over the next week or two, things start to look a little better."
While the tariffs are reduced for now, Roberts says it doesn't mean farmers are out of the woods just yet.
"Certainly, there are still more challenges. I don't think this is the end of things by any means, but being as China is our second largest market, having it reopened to our exports is important. Canola is largely export-dependent, so having our second largest market back is a welcome sign."
