International Trade Committee on Sept. 18th, 2025

[The Chair (Hon. Judy A. Sgro (Humber River—Black Creek, Lib.)), Liberal, Judy Sgro]

I call this meeting to order.

Welcome, members. I hope you have all had a positive summer and are well rested and ready to deal with some challenging issues that are facing our country at the moment.

Welcome to meeting number two of the Standing Committee on International Trade.

Welcome to our analysts, who consistently cover off our meetings and do our reports. You are very much appreciated.

Pursuant to Standing Order 108(2) and the motion adopted by the committee on June 16, 2025, the committee is commencing its study of Canada's engagement in a rules-based international trade and investment system.

Regrettably, we are missing Mr. Herman. He did not have the proper connection for his headset and will not be appearing before us today, but he will be invited to come, possibly on Monday, or at the first opportunity he can.

From Attac Québec on video conference is Claude Vaillancourt, and here in the room with us, from the Canadian Pork Council, are René Roy, the chair, and Stephen Heckbert, the executive director, people who are familiar with our committee and whom we are familiar with, for the most part.

From the Canadian Vehicle Manufacturers' Association, we have Brian Kingston, president and chief executive officer, and Jennifer Steeves, director, industry and consumer affairs.

Thanks very much to all of you for making time to be here today to start us off on our current study.

We will start with opening remarks and then go to rounds of questions.

Mr. Kingston, please start us off for five minutes.

[Brian Kingston, President and Chief Executive Officer, Canadian Vehicle Manufacturers' Association]

Thank you.

Madam Chair and honourable members, I appreciate the invite to be here today as part of your study on Canada's engagement in a rules-based international trade and investment system.

The Canadian Vehicle Manufacturers' Association, or CVMA, is the industry association that represents Canada's leading manufacturers of light and heavy-duty motor vehicles. Our membership includes Ford, General Motors and Stellantis—formerly FCA Canada.

As a trading nation, the rules-based international trade and investment system is foundational to the success of the economy. Two-way trade in goods and services accounted for 67% of GDP in 2023. In the automotive industry, 90% of Canadian production is exported.

Rules-based trade policies and regulatory harmonization created the integrated North American market, whereby Canadian manufacturers sell into a broader North American market accounting for annual sales of 20 million vehicles. It is this integration that has allowed Ford, General Motors and Stellantis to make historic job-creating investments in Canada over the past five years that total nearly $15 billion.

The CVMA has consistently advocated for Canada to pursue a rules-based trade and investment system that adheres to the following five principles.

Number one is that there be no differentiated outcomes between Canada and the U.S. with respect to automotive trade.

Two is that trade rules support the deep integration of the North American integrated automotive industry.

Three is rules of origin that fully consider and align with our strong dependence on sourcing within North America.

Four is currency disciplines to ensure that market access provisions in our trade agreements are not undermined by currency manipulation.

Finally, number five is the removal of all non-tariff barriers, such as unique regulations or taxes, that impede free trade.

China does not adhere to many of the rules-based trade and investment principles that have been fundamental to the success of the auto industry and the Canadian economy. The CVMA strongly supports the China surtax order that placed a 100% tariff on Chinese EV imports, and we have asked the government to maintain it.

The economic and national security concerns that prompted the government to implement the surtax in the first place remain the same today. There is simply too much at stake for the auto industry and the broader Canadian economy if this surtax were to be removed. The playing field must be level and rules-based if Canada's auto industry is to compete with China's EV industry.

In markets around the world where action was not taken quickly, Chinese EVs have rapidly gained market share and undermined the domestic automotive industry. The best example of this is Mexico. This year, one in three new cars sold will be built in China. That's up from 4% of the market in 2020.

China has achieved this EV price advantage through a state-directed industrial policy that has provided subsidies totalling an estimated $230 billion U.S. between 2009 and 2023. Combined with weak labour and environmental standards, Chinese manufacturers can produce and sell EVs at a price point that is far below what a North American OEM could achieve.

As documented extensively by Unifor, non-existent labour rights in China have suppressed wages and artificially lowered the cost of production. According to an analysis of 30 Chinese auto companies, the hourly wage paid is anywhere between $1.93 U.S. and $4.27 U.S. Just to give you a sense of how that compares to CVMA members who are unionized, a production assembler there is paid an average hourly wage of $44.52 per hour and, of course, has generous pensions and benefits.

In addition to a level playing field, we recommend the federal government eliminate the EV sales mandate known as the electric vehicle availability standard. This mandate prioritizes arbitrary EV sales targets over the development of the North American supply chain. This policy has opened Canada to subsidized or dumped EVs from China and other non-market economies.

We recommend that this misguided EV sales mandate be scrapped in advance of the review of the CUSMA, our North American free trade agreement.

Thank you very much for your time. I'm happy to answer any questions.

[The Chair, Liberal, Judy Sgro]

Thank you very much.

Mr. Roy, please go ahead.

[René Roy, Chair, Canadian Pork Council]

Thank you for this invitation, Madam Chair.

I would also like to thank the committee members for their work on this issue.

My name is René Roy, and I am the chair of the Canadian Pork Council. Joining me is Stephen Heckbert, our executive director.

As the third-largest pork exporter in the world, free and fair trade policies are of the utmost importance to the prosperity and vitality of the Canadian pork industry. As you may know, Canada exports 70% of its pork production to almost 80 countries around the world. We are believers in and supporters of free and fair trade in a rules-based system. That is why we are pleased to have been consulted on this question.

There have been many significant shocks to the international trading system. A rules-based system—notably, science- and evidence-based rules—is a remedy to such uncertainty and increases food security for the world.

In our view, Canada must remain a strong advocate for a rules-based international trade and investment system, but we must also demand the same from our trading partners. For example, we have a TRQ with Great Britain as part of our ongoing efforts to increase trade with that country, but rules related to animal production and processing that the U.K. has put in place prevent us from accessing this market. Those rules are not science-based, nor are they reciprocated, from a Canadian perspective.

There are other cases, like the CETA. The pork industry does not view that agreement positively because of technical barriers to trade. We estimate that the pork sector alone is losing a market opportunity of about $400 million annually. That is why we urge the committee to be vigilant to ensure that the science-based principles that govern our trade are protected.

All of the long-term projections for global demand for pork paint a picture of growth well into the future. Canada's ability to provide quality pork to the rest of the world will be part of our contribution to the growth of Canada's economy.

Where we could benefit from help from this Parliament is in the efforts to expand our processing capability in Canada, whether that is in helping existing processors to expand their capacity or by encouraging new entrants into the industry from overseas for Canada pork production to grow. We must also grow processing capacity, so efforts to seek foreign direct investment in agri-food facilities are something we invite this committee to explore.

We hope that the committee continues to ensure that food security is a key part of our trade and defence positioning as it reviews this and all trade-related files as part of its mandate.

We are happy to answer any questions you may have.

[The Chair, Liberal, Judy Sgro]

Thank you very much.

Mr. Vaillancourt, I see you on the screen. The floor is yours for up to five minutes.

[Claude Vaillancourt, President, Attac Québec]

Good afternoon. We would like to begin by thanking you for this invitation.

Attac Québec, Action citoyenne pour la justice fiscale, sociale et écologique, aims to establish democratic control of financial markets and their institutions.

I'm the president of that association and responsible for the free trade file, which I've been interested in for over 20 years. I've written and coordinated three books on the subject.

We believe that rules-based international trade is fundamental. However, it raises the question of what those rules are and who benefits from them.

The rules that have been put in place since the 1990s haven't really served the interests of the people around the world. Drafted in free trade agreements that were negotiated in secret, without consultation with enough civil society actors, the rules have been designed to benefit large transnational corporations, often to shield them from other rules that they should have followed to pay their taxes, protect the environment and provide decent work. As a result, the track record for the years of free trade, under the rules set out in the trade agreements, isn't stellar. It includes weak economic growth, an increase in inequality, major environmental degradation, job losses caused by competition among workers, and a significant decline in purchasing power for the middle class and society's most disadvantaged. Faced with significant losses of quality of life, many voters turn to the far-right parties that feed off the dissatisfaction caused by free trade agreements. Too many people feel abandoned and helpless.

Donald Trump got elected, particularly in his first term, by winning a majority of votes in regions devastated by the consequences of free trade agreements, an evil he readily identified. Now that Trump has returned to power, he refuses to abide by the established rules that produced those results so that he can enforce his own, even more disastrous rules that leave his trading partners baffled.

In the face of the Trump administration's unpredictable tariffs and, above all, its intimidating negotiating style, Canada has to stick to fundamental values, give nothing in advance and provide a firm counter-example in negotiations. By breaking the rules, Trump gets more in a few weeks than other countries do after years of negotiation. The worst thing to do is to cave in to him in advance. For example, hastily abandoning the digital services tax, which we believe to be essential, has done far more harm than good and hasn't changed the President of the United States' attitude.

Faced with Trump, Canada has to adopt a stance that enables it to fully uphold what it believes in and to not give in to a contagion effect when it comes to the U.S. government's most questionable measures. It has to develop rules that enable it to better protect the environment and take action on climate justice. It has to fully maintain supply management. It has to protect culture and reaffirm its commitment to the principle of cultural diversity. It also has to break with rules that have been harmful, such as the investor-state dispute settlement under the Canada-United States-Mexico Agreement, or CUSMA, and regulatory co-operation, terms that make it possible to question regulations that are often necessary. The Canadian government has to resist any weakening of health and safety rules. It should apply all of this in its ongoing negotiations with Ecuador, Mercosur and Indonesia.

Our neighbour to the south certainly has particularly unpredictable behaviour, so much so that the agreements that seemed to be the strongest, such as CUSMA, are under threat. However, the worst attitude to take would be to give in to intimidation and bind our future to the wishes of an extremist president, whose support from his own population is weak and who will not be in office forever.

I look forward to your questions.

[The Chair, Liberal, Judy Sgro]

Thank you to all of the witnesses for those opening statements.

We will now open the floor to questions from our members.

Mr. Chambers, you have six minutes, please.

[Adam Chambers, Conservative, Simcoe North, ON]

Thank you very much, Madam Chair.

I'd like to welcome all the witnesses here to this first meeting of this very important study and thank them for their opening testimony.

I'd like to start with Mr. Kingston for a couple of minutes, if I might.

I just heard you mention a couple of stats, and I want to make sure I got them right. Did I hear you correctly that 90% of vehicles made in Canada today are exported?

[Brian Kingston]

Yes. Approximately 90% is where it has been historically.

[Adam Chambers, Conservative, Simcoe North, ON]

I assume most of those are going to the United States.

[Brian Kingston]

That's correct.

[Adam Chambers, Conservative, Simcoe North, ON]

Do any of them go to China?

[Brian Kingston]

No. That would be minuscule and probably non-existent.

[Adam Chambers, Conservative, Simcoe North, ON]

Right, and that's for a whole bunch of reasons, but really, they wouldn't even be allowed to go to China. Is that right?

[Brian Kingston]

No. Due to the tariffs, vehicle standards and divergence in regulations, that would not make sense or be possible.

[Adam Chambers, Conservative, Simcoe North, ON]

That's right.

I read in today's Globe and Mail an opinion piece authored, I think, by Clean Energy Canada. I'm not sure if you're aware of that organization.

[Brian Kingston]

I am, yes.

[Adam Chambers, Conservative, Simcoe North, ON]

They're suggesting that Canada open its doors to electric vehicles coming from Europe, but in reality, I think, they're actually coming through Europe but from China. Is that your understanding?

[Brian Kingston]

Yes. I've had a glance at that report, and my understanding is that for the vehicles included in it, a number of them were coming from China to Europe, and then it's proposing they come to Canada.

[Adam Chambers, Conservative, Simcoe North, ON]

Do you know who funds Clean Energy Canada? Who's behind that?

You've disclosed who your members are. Do you know who the members of Clean Energy Canada are?

[Brian Kingston]

I do not, and I've wondered, because they've been very adamant that Chinese vehicles come into the Canadian market. It's not clear to me. There's no transparency around who funds them.

[Adam Chambers, Conservative, Simcoe North, ON]

Okay.

Effectively, Canadians really are being asked—or the government is being asked on behalf of Canadians—to allow vehicles from a country that won't allow our vehicles to go there, so that they could displace vehicles that in theory are built here. Is that what your understanding is?

[Brian Kingston]

That is my understanding of the ask, yes.

[Adam Chambers, Conservative, Simcoe North, ON]

Okay.

You mentioned the electric vehicle mandate. I have to say that you've been very famous. You've been on TV a number of times. You've been giving interviews.

I saw an interview that you did a couple of weeks ago on CBC, actually, with David Cochrane. I think you mentioned that there are currently Canadian auto manufacturers that have already purchased credits from Tesla under this government scheme. Is that correct?

[Brian Kingston]

Yes. According to our estimates, there is a deficit of EV sales between now and 2030 of about 550,000. That's compared to the government-mandated targets. To manage that deficit, companies have to contract with automakers that have surplus EV sales, and that would be anywhere from.... As we get toward 2030, the number could be as high as $3.6 billion, but according to our estimates, over $1 billion has already been committed to this.