Prime Minister Mark Carney has announced a new $370 million production incentive aimed at supporting Canada’s canola producers. This initiative is part of a broader strategy to tackle "immediate competitiveness challenges" faced by the industry, particularly in light of recent tariffs imposed by China on Canadian canola seed.

Last month, China implemented a 75.8 percent tariff on Canadian canola, a move interpreted as retaliation for Canada’s own 100 percent tariff on Chinese electric vehicles. In response, Carney stated that the government will also amend its Clean Fuel Regulations to bolster the biofuels sector.

Additionally, the government plans to temporarily increase the amount of interest-free advances available to producers and enhance funding to help diversify into new markets. These measures were unveiled on Friday, coinciding with a package of support for sectors adversely affected by U.S. tariffs.

Carney's announcement follows the government's recent decision to send a parliamentary secretary to China. This visit is part of Saskatchewan's efforts to persuade Beijing to lift its canola tariffs. Nova Scotia MP Kody Blois will accompany Saskatchewan Premier Scott Moe on a three-day trade mission starting Saturday. Their goal is to "engage constructively with Chinese officials," according to Carney's office.

During this mission, officials hope to address other "trade irritants" as well. China is the second-largest importer of Canadian canola products, following the United States. In the previous year, Canada exported approximately $14.5 billion worth of canola products, with about $4.9 billion of that total going to China.

The recent tariff on canola seeds was enacted nearly a year after China initiated an anti-dumping investigation into the crop. China's Ministry of Commerce has claimed that Canadian canola companies were dumping their products in the Chinese market, which it argues has harmed its domestic canola oil industry. However, both Ottawa and Canadian farmers have denied these allegations, asserting that exporters are adhering to rules-based trade.