Canada's auto sector is "facing unfair competition from China's intentional state-directed policy of overcapacity that is undermining Canada's EV sector's ability to compete in domestic and global markets," Deputy Prime Minister Chrystia Freeland told a news conference.
"Chinese producers are quite intentionally generating a global oversupply that undermines EV producers around the world," she said.
A 30-day consultation with industry and unions will start on July 2 on potential actions such as an import surtax on Chinese EVs, making Chinese EVs ineligible for federal rebates, and foreign investment restrictions.
Freeland vowed to act "to level the playing field, to prevent oversupply and to prevent transshipments through Canada," whose auto sector is integrated with the United States.
"Everything is on the table," she said.
The European Union said this month that it would slap additional tariffs of up to 38 percent on Chinese electric car imports from July after an anti-subsidy probe.
In May, US President Joe Biden announced a quadrupling of customs duties on Chinese electric cars to 100 percent, which China slammed as politicizing an economic issue and a breach of World Trade Organization rules.
Canada's automotive sector builds more than 1.5 million vehicles every year and contributes Can$18 billion (US$13 billion) to the Canadian economy, according to government data.
Ottawa has been building up the nation's electric car and battery supply chains with tens of billions of dollars in subsidies and investments including from Honda, Volkswagen and Stellantis.
The only Chinese-made EVs currently imported into Canada are Teslas.
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