Finance Minister Chrystia Freeland says Canada is investigating whether to impose a surtax on imports of Chinese-made electric vehicles.
A 30-day consultation on the issue will begin July 2 to counter what Freeland says is a clear effort by Chinese companies to generate a global oversupply.
Canada's move comes weeks after both the United States and the European Commission announced plans to impose higher import tariffs on Chinese EVs this summer.
The consultation will seek input on what is driving China's surging EV exports, including unfair market practices as well as labour and environmental standards.
In addition to a surtax, the consultation will consider whether Canada should change which cars are eligible for the federal EV purchase rebate worth up to $5,000 per vehicle.
It will also look at whether to expand investment restrictions in Canada.
