Thank you.
Mr. Chair, honourable members of the committee, thank you for the invitation to appear before you today.
As the director general responsible for North American trade policy at Global Affairs Canada, I will focus my remarks on the Canada-U.S. trade relationship, recent trade discussions with the United States and their impact on Canada's economic interests.
At the ministerial joint review required under CUSMA, which was held on July 1, 2026, Canada and Mexico confirmed their desire to renew the agreement for an additional 16-year term. The United States did not agree to the renewal and instead indicated its intention to continue discussions regarding what it views as shortcomings in the agreement and in its broader trade relationship with Canada and Mexico. As a result, the parties have entered the annual review process contemplated under the agreement. In the meantime, CUSMA remains in force and continues to provide the legal framework governing North American trade.
Against this backdrop, Canada has engaged intensively with the United States since January 2025 in an effort to reduce trade tensions and provide greater certainty to workers and businesses. These efforts culminated this summer when Canada and the U.S. were engaged in negotiations to reach an interim bilateral agreement.
Canada approached these discussions constructively and in good faith. Our goal was simple: to obtain significant tariff relief and restore stability to the bilateral trade relationship. We were looking for a fair deal, not a deal at any cost.
Although I cannot disclose the specific details of the arrangement that was considered, Canada demonstrated flexibility and was willing to explore various solutions. However, we could not accept proposals that would have harmed Canada's economic interests, compromised our sovereignty or weakened the key economic sectors of the Canadian economy. Ultimately, the negotiations did not produce an outcome that met Canada's objectives, and no agreement was reached.
Following the breakdown of negotiations on August 21, the United States proceeded with the implementation of tariffs under section 338 of the Tariff Act of 1930, also known as the Smoot-Hawley act. These measures imposed tariffs of up to 50% on a broad range of Canadian goods, including products that otherwise would benefit from preferential treatment under CUSMA. They affect several important Canadian sectors, including alcoholic beverages, dairy products, pulp and paper, construction materials, furniture, apparel, consumer goods and other manufactured products.
Canada responded on August 25 by announcing reciprocal countermeasures that were carefully calibrated to match the value and the rate of U.S. actions. These measures entered into force on September 8. They apply to approximately 27.6 billion dollars' worth of U.S. imports. At the same time, the government introduced a package of support measures to help Canadian businesses and workers adapt to an evolving trade environment.
Despite these challenges, Canada remains committed to maintaining a productive and mutually beneficial trading relationship with the United States. We remain ready to work with the United States on issues of common interest and on solutions that will restore the stability and predictability workers, businesses and investors across North America depend on.
At the same time, Canada is taking steps to strengthen its economic resilience, enhance its competitiveness and diversify trade opportunities. While our relationship with the United States will remain essential, Canada is positioning itself to succeed in an increasingly uncertain global trading environment.
Thank you, Mr. Chair. I look forward to answering the committee's questions.
I will turn it over to my colleague Martin Larose.
