Notice Concerning the Quota for Imports of Chinese Electric Vehicles

The Government of Canada has published a new Notice concerning the rules and procedures governing the administration of the quota for imports of electric vehicles from the People's Republic of China for the second period of Quota Year 1 (September 1, 2026 to February 28, 2027). The Notice, issued by Global Affairs Canada under the Export and Import Permits Act (EIPA), confirms that the second allocation period will continue to operate similar to the first allocation period. 

The quota replaced the 100% surtax previously applied to Chinese-origin EVs before March 1, 2026. Eligible imports within the quota remain subject only to Canada's most-favoured-nation (MFN) tariff rate of 6.1%. 

Quota Volume for the Second Period Increases to 33,397 Vehicles

The annual quota for Quota Year 1 (March 1, 2026 to February 28, 2027) is 49,000 vehicles. Consistent with the approach announced when the regime was introduced, the annual quota is divided into two six-month allocation periods.

The Notice confirms that the base allocation for the second period is 24,500 vehicles. In addition, unused quota volume from the first period (March 1, 2026 to August 31, 2026) is carried forward. According to Global Affairs Canada's utilization data, quota volume for 8,897 vehicles remained unused during the first period. As a result, the total quota available during the second period is 33,397 vehicles. 

First-Come, First-Served

The quota will continue to be administered on a first-come, first-served basis, with import permits being issued until the available quantity is exhausted. Once the quota has been fully utilized, no further permits will be issued during the period. Eligible EVs imported pursuant to a valid import permit continue to be assessed at the MFN tariff rate of 6.1% rather than the 100% surtax that applied prior to March 1, 2026.

Shipment-Specific Import Permits Remain Mandatory

Importers should note that the core compliance framework remains unchanged. Imports of covered Chinese-origin EVs continue to require shipment-specific import permits issued by Global Affairs Canada. Imports without a valid permit are prohibited.

Import permits are required regardless of whether the importation is permanent or temporary (e.g. for testing or demonstration purposes). Accordingly, businesses bringing qualifying vehicles into Canada on a temporary basis should not assume that the permit requirement is limited to commercial sales or permanent imports. The permit requirement flows from the inclusion of covered EVs on Canada's Import Control List and applies to imports subject to the quota regime. 

Eligible EVs

Qualifying EVs are defined by their tariff classification code, and their status as originating in China is determined in accordance with section 3 of the Determination of Country of Origin for the Purpose of Marking Goods (Non-CUSMA Countries) Regulations. The Notice further clarifies that a complete EV knock-down kit has the essential character of a fully assembled vehicle. Accordingly, where a complete EV knock-down kit is substantially manufactured in China and exported for assembly in Canada or a third country, the completed vehicle will be considered to originate in China.

The Notice notes that electric tricycles and other non-passenger vehicles, such as electric golf carts and three-wheeled mobility scooters, classified under certain tariff items are not subject to import controls or the quota and therefore do not require a permit from Global Affairs Canada to enter Canada.

Applications May Be Submitted Up to 30 Days Before Entry

The Notice confirms that importers may apply for a shipment-specific permit up to 30 days prior to the expected date of entry of the shipment into Canada. 

This provides importers with some flexibility in coordinating permit applications with production schedules, international shipping timelines and customs clearance planning.

Extended Permit Validity Period

Global Affairs Canada has also maintained the extended validity period introduced during the first allocation period.

Permits will be issued with a validity period of up to 60 days. For example, five days prior to the expected date of entry and 54 days after the expected date of entry to allow for shipping delays. 

Global Affairs Canada Signals Potential Measures to Promote Equitable Access

As with the first allocation period, the Notice states that Global Affairs Canada will continue to "monitor the application and issuance of import permits for the purpose of providing equitable access to the quota to eligible applicants". The Notice further states that this monitoring "could include setting aside a portion of the available quota for the use of OEMs, including new entrants." No further details are provided regarding the circumstances in which such a set-aside may be implemented or how any reserved quota would be allocated.

Eligibility Remains Limited to Canadian Residents and OEMs

The Notice reiterates the eligibility requirements applicable to the program.

To import EVs under the quota, a permit applicant must:

• be a resident of Canada, ("in the case of a natural person, a person who ordinarily resides in Canada; and in the case of a corporation, a corporation having its head office in Canada or operating a branch office in Canada"); and
• be an OEM of EVs ("an original equipment manufacturer engaged in the manufacturing or assembling of new motor vehicles, specifically EVs"). 

Unlike many Canadian import control regimes, eligibility is restricted to OEMs. Independent distributors, dealers and other importers may therefore need to act on behalf of, or be appointed by, an eligible OEM in order to access the quota.

Importantly, the Notice continues to accommodate foreign manufacturers that do not yet have a Canadian corporate presence.

A non-resident OEM may appoint an agent who is a resident of Canada to act as the importer. The Notice provides several examples of acceptable representatives, including a consultant, local sales representative, legal agent or direct employee. 

This flexibility may be particularly helpful for Chinese manufacturers that are evaluating the Canadian market but have not yet established a Canadian subsidiary or branch operation.

Importer Responsibilities

It is the importer’s responsibility to:

• Ensure that a permit application is made in the name of the importer of record and includes the correct commodity code and quantity;  
• Amend any permits containing incorrect information, such as the quantity, by cancelling and re-applying for a permit;
• Cancel any unused or expired permits; and
• Identify and comply with any additional requirements associated with any other legislation, regulations, and/or policies relating to the import of these products, such as those applicable by the Canada Border Services Agency, Transport Canada or Environment and Climate Change Canada.

Key Takeaways

The second allocation period offers substantially more available quota volume than the first period, with 33,397 vehicles available beginning September 1, 2026. However, the regime remains highly regulated:

• shipment-specific import permits continue to be mandatory;
• eligible imports remain subject only to the 6.1% MFN tariff rate;
• quota access continues on a first-come, first-served basis;
• permit applications may be filed up to 30 days before expected entry;
• permits may remain valid for up to 60 days; and
• Global Affairs Canada has signalled a willingness to intervene administratively to promote equitable access to the quota, including potentially reserving quota volume for OEMs and new entrants. 

The second allocation period presents a significant opportunity for Chinese OEMs seeking access to the Canadian market. However, OEMs and prospective entrants should carefully monitor quota utilization and permit availability during the second allocation period and ensure that importer-of-record arrangements, permit applications, and shipment schedules are coordinated well in advance of importation. Given the first-come, first-served nature of the quota and Global Affairs Canada's stated intention to monitor permit issuance to promote equitable access, advance planning will remain important throughout the second allocation period.