International Trade Committee on March 10th, 2026

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

Welcome to meeting number 26 of the Standing Committee on International Trade.

I apologize for the delay, but that's democracy at work. We'll try to get through this as quickly as possible in order to get to our members and the opportunity to raise questions.

Pursuant to Standing Order 108(2) and the motion adopted by the committee on Thursday, February 12, the committee is commencing a study of Canada's trade with the Mercosur countries.

We have with us today, from the Canadian Cattle Association, Andrea Brocklebank, chief executive officer, by video conference, and Tyler Fulton, president.

From Les Éleveurs de volailles du Québec, we have Benoît Fontaine, by video conference.

From the Brazil-Canada Chamber of Commerce, we have Paola Saad, executive director, also by video conference.

From the Canadian Manufacturers and Exporters, we have Ryan Greer, senior vice-president.

From the Canadian Pork Council, we have René Roy, chair—a committee friend who is here frequently—and Stephen Heckbert.

Welcome to you all.

We are tight for time, so I've asked if we could get all our panellists at the table. You all have four to five minutes. We're just trying to catch up with the time here.

We will start with Mr. Fontaine, please.

[Benoît Fontaine, President, Les Éleveurs de volailles du Québec]

Thank you very much.

Madam Chair and members of the committee, thank you for giving me the opportunity to testify as part of the study on Canada's trade with the Mercosur countries.

My name is Benoît Fontaine. I'm a second-generation chicken and turkey farmer in Stanbridge Station, located in the beautiful Eastern Townships tourist region, near Lake Champlain. I am the president of Éleveurs de volailles du Québec and, in that capacity, I represent over 690 farms, including 623 chicken farmers and 161 turkey farmers, who raise their birds with care and in accordance with the strictest food safety and animal welfare standards.

With farm incomes exceeding $1 billion, Quebec's poultry farms are spread across the province in 249 municipalities, from Gatineau to Sainte‑Florence and the Bas‑Saint‑Laurent region. If it were solely a matter of supply management, there would be no poultry farms in regions far from major urban centres, such as Lac‑Saint‑Jean.

Poultry farms generate economic benefits and help create thousands of jobs. In Quebec, these farms are primarily family-run operations on a manageable scale, producing approximately 500,000 kilograms of chicken per year or 40,000 birds per production cycle. To produce their poultry, farms source more than 230 million chicks and turkey poults from seven hatcheries and purchase feed from over 40 feed mills. Quebec also has about 15 slaughterhouses that must plan and carry out the slaughter of over 4.5 million chickens a week.

These economic activities are carried out without relying on government production subsidies. Supply management is therefore the economic solution for rural Canada.

I'm here to raise the concerns of Quebec's chicken and turkey farmers regarding the ongoing negotiations with the Mercosur countries. Brazil is a major global exporter of chicken and opening the Canadian market to more products from that country would undermine the competitiveness of our farms here.

According to data from the U.S. Department of Agriculture, Brazil is by far the largest producer and exporter of chicken within Mercosur. Brazil alone poses a structural threat to the Canadian chicken sector. Its dominance in the global market creates a disproportionate risk for the Canadian sector. Brazil is the world's third-largest producer of chicken and the world's largest exporter. By comparison, Canada ranks 18th in production and 11th in exports. In 2025, Brazil was estimated to export approximately 5.2 million tons of chicken, or about one third of its production.

For years, Brazil has been Canada's second-largest supplier. Its relative importance declined slightly in 2025 due to outbreaks of avian influenza across the country. There are also concerns regarding Argentina, which uses a production model similar to Brazil's and has begun exporting its products to Canada as well.

Brazil is also the leading turkey-producing country in Mercosur, and its importance is comparable to that of Canada. Unlike Canada, half of this production is destined for foreign markets. Even though Canada is not currently a destination country for these exports, no new quotas should be granted because this sector is particularly vulnerable to any new concessions.

Before becoming president of Éleveurs de volailles du Québec, I served as president of Chicken Farmers of Canada from 2016 to 2022. As a result, I had a front-row seat to the trade negotiations with the United States and Mexico that led to CUSMA, or the Canada-United States–Mexico Agreement.

I also closely followed the negotiations leading up to the conclusion of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership in 2018. This experience with trade negotiations taught me that the agricultural sector—particularly supply-managed products—is always among the sectors where concessions are made at the last minute.

Unfortunately, I have witnessed the compromises made during previous negotiations. Bill C‑202, formerly Bill C‑282, which was unanimously passed by the House of Commons in 2025 and quickly ratified by the Senate, gives me hope that the outcome will be different for future agreements.

This legislation provides clear guidelines for negotiators. Members of the negotiating team must draw on the unanimous support of parliamentarians to resist pressure from their Mercosur counterparts seeking expanded access to the Canadian chicken and turkey market.

It is essential that a free trade agreement with Mercosur not harm the Canadian chicken and turkey industry, and that the following factors be taken into account.

First, it is essential to maintain over-quota tariffs at their current levels in order to ensure effective import control. Any reduction in over-quota tariffs would undermine the predictability needed to ensure the smooth functioning of supply management.

Second, the integrity of Canada's tariff rate quota for chicken must be respected. No additional market access should be granted under a Canada–Mercosur free trade agreement. Canada already grants substantial market access through the World Trade Organization—

[The Chair, Liberal, Judy Sgro]

My apologies, Mr. Fontaine, but I have to cut you off. Hopefully, you can finish your comments in response to some questions asked by our members, if you can stay a little bit longer.

Go ahead, Mr. Fulton, please.

[Tyler Fulton, President, Canadian Cattle Association]

Good afternoon, Madam Chair. Thank you for the opportunity to appear today.

I'm Tyler Fulton from Birtle, Manitoba. I am the president of the Canadian Cattle Association. Through our provincial members, the CCA represents approximately 60,000 beef producers across Canada, supporting jobs, the economy, rural communities and food security.

Today, I will clarify the CCA's stance on Mercosur negotiations affecting beef. In short, we oppose a deal that expands access to Canada's beef market, for three main reasons.

Mercosur includes the world's largest, lowest-cost beef producers—Brazil, Argentina, Paraguay and Uruguay—which together account for 27% of global production. Brazil is the world's largest beef exporter.

First, a Canada-Mercosur deal that grants more beef access to importers with no meaningful reciprocal market opportunity would harm Canada's beef sector and threaten the long-term sustainability of beef production in Canada. Canada's cattle and beef sector contributes $34 billion to our GDP, supports over 347,000 jobs and is the third-largest employer in agriculture. Canadian farmers drive rural economies, and they will be harmed if Mercosur imports increase.

For the last two years, our beef import quota was filled in record time—by mid-January. The trade data is clear. Mercosur beef imports rose from 12,000 tonnes in 2021 to over 40,000 tonnes in 2025, with 70% paying the existing tariff, showing that current tariffs don't deter imports in today's market context. Canada's beef sector is operating in a tight supply environment, with North American herds at multidecade lows. Introducing large volumes of low-cost imports now would disrupt the price signals driving the rebuild of the Canadian beef herd.

Our second reason for opposing more Mercosur beef in Canada is that Canadians expect high-quality beef that is raised sustainably, with high environmental and animal welfare standards. Mercosur beef does not meet these standards, and it introduces risks that could damage our industry.

Canadian beef earns a global premium for its quality. It's recognized for its sustainability, animal welfare, and labour and food safety standards. Mercosur beef is among the world's cheapest, driven by different production systems and labour and environmental standards. In Mercosur, beef production costs are 30% to 60% lower, and wages are up to 80% lower than in Canada. The Canadian beef sector cannot and should not cut wages or undermine labour standards. We cannot compete on price with beef produced in jurisdictions with lower standards. Compromising our standards would hurt our strong reputation.

Canada is a leader in sustainable beef production, with 52% fewer greenhouse gas emissions per kilogram than the global average. Canada's beef cattle help protect native prairie grasslands, one of the most endangered ecosystems. Higher-emission imports would undermine Canada's environmental and biodiversity goals.

We also have serious concerns about Mercosur’s animal health standards, including foot-and-mouth disease control, BSE reporting transparency and SPS compliance. Strong animal health standards are critical to trade. Expanding Mercosur access could threaten our herd’s biosecurity and jeopardize Canadian exports.

This brings me to my third reason for opposing more Mercosur beef in Canada. It risks damaging the Canadian beef industry's relationship with the United States, our most important trading partner. Canada's beef sector is deeply integrated with the U.S., operating as a coordinated North American market for supply and pricing. Canada set its WTO tariff rate quotas in coordination with the United States to preserve proportional access and avoid disruption. Granting major new access to Mercosur could be seen as a back door to the U.S. market. There is a precedent that past spikes in Canadian beef imports triggered U.S. investigation against our cattle and beef exports, harming producers on both sides of the border. At a time when Canadians depend on stable U.S. market access, we can't risk that relationship for an agreement with no benefits and plenty of risks.

In conclusion, the Canadian Cattle Association insists that the government keep beef out of the Mercosur deal. There's nothing to gain for consumers, but there is much to risk for Canadian producers and the rural economy.

Thank you. I look forward to your questions.

[The Chair, Liberal, Judy Sgro]

Thank you, Mr. Fulton.

Next is Ms. Saad, please, for up to five minutes.

[Paola Saad, Executive Director and Co-chair, Trade and Investment Committee, Brazil-Canada Chamber of Commerce]

Good afternoon, Chair and members of the committee.

My name is Paola Saad. I am appearing today on behalf of the Brazil-Canada Chamber of Commerce [Technical difficulty—Editor] president. I was here as a witness for the Mercosur study 10 years ago. I am the executive director and co-chair of the trade and investment committee.

Thank you for the opportunity to contribute to this important review of Canada's engagement with the Mercosur bloc.

The BCCC is a non-profit, member-driven organization dedicated to strengthening commercial—

[The Chair, Liberal, Judy Sgro]

Hold for a second. We seem to have a translation problem.

I apologize, Ms. Saad. Please continue. We'll give it a try. Your Internet connection is not solid, so I'm not sure we'll be able to continue, but let's give it a try.

[Paola Saad]

Okay.

The BCCC is a non-profit, member-driven organization dedicated to strengthening commercial investment and institutional ties between Canada and Brazil. Our membership includes Canadian and Brazilian companies, financial institutions, investors and professional service firms operating across sectors such as agriculture, mining, infrastructure, aerospace, clean technology, financial services and the digital economy.

Based on the experience of our members actively operating in both markets, our central message today is straightforward: Canada and Brazil represent one of the most underdeveloped major economic partnerships in the western hemisphere, and a well-structured Canada-Mercosur agreement has the potential to meaningfully unlock that relationship.

Brazil is the largest economy in Latin America and a critical regional hub for supply chains in agriculture, energy, mining and advanced manufacturing. At the same time, Canada brings globally competitive capabilities in infrastructure investment, mining services, clean technology, aerospace, financial services and digital innovation. The economic complementarities between our two economies are substantial.

However, despite strong commercial interests from Canadian companies and investors, persistent market barriers continue to constrain the full potential of the relationship. These barriers include regulatory complexity, non-tariff trade restrictions, investment uncertainty and limited transparency in regulatory processes.

For this reason, Canadian stakeholders consistently emphasize that a Canada-Mercosur agreement must go beyond tariff reduction alone. To be commercially meaningful, it must prioritize four core pillars.

The first is investment liberalization and capital mobility. Canadian pension funds, infrastructure developers, mining companies and clean technology firms are actively seeking long-term opportunities in Brazil and across Mercosur. For this capital to flow at scale, the agreement must guarantee free movement of investment-related funds and ensure that returns, payments and transfers can occur in freely convertible currency.

The second is strong investor protections and credible dispute resolution. Canadian investors require credibility. Clear commitments to fair and equitable agreement, protection against expropriation, and reliable dispute settlement mechanisms are essential to support long-term investment decisions.

The third is meaningful market access, combined with robust rules of origin. Tariff elimination would be important in sectors such as fertilizers, mining equipment, aerospace components and clean technology. At the same time, strong rules of origin will be necessary to ensure that preferential access benefits genuine local and regional production and does not allow goods from third countries to circumvent the agreement.

The fourth is addressing non-tariff barriers and regulatory friction. Canadian companies frequently face high compliance costs due to fragmented standards, complex tax structures, import licensing practices and opaque regulatory procedures. Greater transparency, regulatory co-operation and alignment with international standards will be essential to reduce these barriers.

Beyond these priorities, our members also emphasize the importance of services trade, digital commerce, government procurement transparency, administration of IP rights, and improved mobility for business professionals. These areas increasingly define modern trade relationships and will be critical for SMEs and technology-enabled firms seeking to operate across borders.

In closing, the BCCC and its members strongly support deepening Canada's economic engagement with Brazil and the broader Mercosur region. A modern, balanced agreement has the potential to strengthen supply chains across the Americas, mobilize Canadian capital and support sustainable economic growth in both regions. However, for the agreement to succeed, it must deliver real commercial certainty, enforceable rules and meaningful market access. These elements are not optional; they are foundational to the unlocking of the full potential of the Canada-Brazil economic relationship.

Thank you for your time. I look forward to your questions and to contribute further to the committee's work.

[The Chair, Liberal, Judy Sgro]

Thank you very much.

We'll go to Mr. Greer, please, for up to five minutes.

[Ryan Greer, Senior Vice-President, Public Affairs and National Policy, Canadian Manufacturers and Exporters]

Chair and honourable committee members, thank you for the opportunity to appear on behalf of Canadian Manufacturers and Exporters. CME is one of Canada's largest and oldest trade associations, representing manufacturers of all sizes and in every industrial sector and helping them navigate the economic, trade and regulatory challenges that affect their bottom line.

Manufacturers welcome the committee's ongoing focus on trade diversification, including deeper engagement with Mercosur countries. In an environment of growing geopolitical uncertainty and ongoing supply chain disruption, diversification is an important component of Canada's long-term economic resilience.

At the same time, in the current North American and global context, it is important to be clear about what diversification means for Canadian manufacturers. For most manufacturers, trade diversification does not imply a fundamental shift away from the United States; the U.S. will remain Canada's primary market for manufactured goods for the foreseeable future. It bears repeating that the only way to solve our U.S. problem is to solve our U.S. problem. From a manufacturing perspective, diversification is about reducing risk at the margins, creating optionality and supporting targeted opportunities, rather than reorienting Canada's industrial base.

CME is an active partner in Canada's diversification efforts. Just last week, our CEO spent some time in the United Kingdom with a few members of this committee as part of our ongoing efforts to leverage our relationships abroad and help manufacturers find new opportunities, including in the defence and security supply chains.

Viewed through this lens, Mercosur matters in a focused and realistic way. In the near-to-medium term, diversification gains with Mercosur are likely to accrue to commodities and some agri-food products. For manufacturers, opportunities tend to be more targeted and are most often found in industrial inputs, machinery and equipment, technologies that support industrial modernization, and partnerships in areas such as clean energy, critical minerals, aerospace and life sciences. These opportunities are real, but they are not mass-market export channels for most Canadian manufacturers, particularly for small and medium-sized firms.

Our members consistently tell us that market access is only one part of the equation. Even where demand exists, manufacturers face high tariffs and non-tariff barriers, complex and fragmented regulatory regimes, and infrastructure and customs challenges in these markets. Just as important, and often overlooked, is the fact that Canada remains a relatively high-cost place to make things. Energy and capital costs, regulatory burden, infrastructure and weak productivity growth all directly affect whether a Canadian firm can compete internationally.

From a manufacturing standpoint, the single most important thing that governments can do to support trade diversification is to lower the cost of doing business in Canada and improve productivity. Trade agreements and expanded access are important, and manufacturers support them, but their impact will be limited if firms are less cost-competitive, particularly compared with their U.S. peers, slower to invest due to capital constraints or operating in a more complex regulatory environment.

If there's one take-away that I hope informs your thinking on this and the other trade access deliberations at this committee, it is that domestic competitiveness is the foundation that determines whether diversification strategies succeed.

In closing, Canadian Manufacturers and Exporters supports Canada's efforts to deepen engagement with Mercosur as part of a broader diversification strategy. For manufacturers, success will not be measured by the number of agreements signed but by whether Canadian firms are able to invest, produce and compete at globally competitive costs.

When trade policy is paired with a serious and ambitious plan to improve Canada's manufacturing competitiveness, diversification can deliver real value. Without that domestic foundation, the returns for our sector will remain limited.

Thank you, and I look forward to your questions.

[The Chair, Liberal, Judy Sgro]

Thank you very much.

Mr. Roy, please go ahead.

[René Roy, Chair, Canadian Pork Council]

Thank you, Madam Chair.

Ladies and gentlemen of the committee, my name is René Roy, and I'm the chair of the Canadian Pork Council. I'm here today with our CEO, Stephen Heckbert. We're pleased to be here to represent the views of Canada's approximately 7,000 pork producers, from coast to coast.

Our industry is an $8 billion economic engine, and we are, above all, an export-oriented industry, with more than 70% of our production going to foreign markets. We do not fear international competition; we thrive on it. However, competition must be fair.

Mercosur is not like other trading partners. It is a bloc of 282 million people, with a massive and growing pork production capacity. Brazil produces nearly five million tonnes of pork and is one of the four largest world exporters. Unlike other agreements aimed at opening new markets for Canada, the Mercosur file presents the risk of an asymmetrical opening of the Canadian market in favour of low-cost mass products. To date, Canada exports virtually no pork products to Mercosur, while Brazil and Uruguay already enjoy partial access to our market.

Our producers invest heavily in social responsibility, animal health and eco-responsibility. We adhere to some of the most stringent regulatory requirements in the world for environmental protection and food safety. Unfortunately, several Mercosur countries do not impose equivalent standards. This creates a risk of unfair competition, where imported products could enter our market without being produced according to standards comparable to ours. Accepting these products would weaken Canada's position in future negotiations and undermine our effort to promote high standards globally.

Given the market access challenges we already face with other partners, such as the European Union, due to non-tariff trade barriers, Canadian producers cannot support an agreement with Mercosur without answers to the following questions. How will Canada enforce the quality expected by Canadian consumers and implemented by Canadian pork producers when it comes to imported Mercosur pork products? Canadian consumers will not accept lower sanitary standards.

Considering that several Mercosur countries are also export-oriented, how will Canada manage imports with Mercosur to ensure that these countries are not dumping products in a bid to destabilize the Canadian sector? How quickly and effectively could any safeguard clause be available to intervene if an unforeseen surge in import threatens the viability of our sector? Finally, will there be an equivalent and available export opportunity for our producers to the south?

In conclusion, Madam Chair, we urge the government to exercise extreme caution with this potential partner, particularly with regard to agricultural products. An unbalanced agreement would undermine the confidence of our producers and the sustainability of family farms. Without meaningful compensatory benefits and without the protection of our standards, this agreement would not be in Canada's best interest.

The pork sector is supportive of this free trade agreement, but not at all costs.

Thank you, Madam Chair.

[The Chair, Liberal, Judy Sgro]

Thank you very much.

We'll go on to Mr. McKenzie for five minutes.

[David McKenzie, Conservative, Calgary Signal Hill, AB]

Thank you, Madam Chair.

Thanks to all the witnesses for accommodating the shifts in the schedule today.

First of all, I'd like to direct some questions to the Canadian Cattle Association.

Why is it that you're keen to export to and import from the U.S.—one of the largest beef exporters in the world—but not Mercosur countries? How do those two different circumstances compare for you?

[Tyler Fulton]

Thanks for the question. I appreciate it.

The market commands the direction of the flow. High-quality beef, which is largely grain-fed beef, is predominantly produced in the U.S. and Canada, and it is here in North America that it is in highest demand.

In our current supply situation, we've had subsequent years across North America when droughts have contributed to very tight supplies. The beef cow herd is at its tightest level in several decades—30 to 40 years. That's the predominant factor that has driven beef prices higher.

There are other developed nations that desire some of the products we're producing, but there's also another dynamic of the diversification aspect, where certain products produced in Canada are not in high demand here but draw a premium in Asian markets, for example.

[David McKenzie, Conservative, Calgary Signal Hill, AB]

I'm generally aware that there's an extremely close integration of our beef industry with the United States. Live cattle may be shipped across the border, and animals that are slaughtered and perhaps processed in one country are shipped to another, etc. Is that type of integration threatened by significant imports from a country or trading bloc that has different standards from what we respect here in North America?

[Tyler Fulton]

Yes, it is, unequivocally. Our U.S. counterparts, with the National Cattlemen's Beef Association, have explicitly said that they are concerned about Canada being a back door to the U.S. By that, they mean a flood of imports into Canada either being transshipped and moderately changed, or displacing domestically produced Canadian product. We can't threaten that relationship.

[David McKenzie, Conservative, Calgary Signal Hill, AB]

From a different perspective, wouldn't an increase of products imported from Mercosur help to lower prices here in Canada for Canadian consumers?

[Tyler Fulton]

I'd like to refer that question to our CEO, Andrea Brocklebank.

[Andrea Brocklebank, Chief Executive Officer, Canadian Cattle Association]

We do see record-high retail beef prices, and we acknowledge that. It's partially due to conditions in North America, including drought over the last several years, as well as high cost.

In 2025, imports into Canada were at record highs, and we still see those prices. I think it's really important to understand that those price signals are critical to encouraging the expansion of our own production. While there might be some short-term price relief if we allow imports, it also then mutes the signal to producers. We do see producers retaining heifers and increasing the beef cow herd. Numbers are up and starting to move toward the opportunity to put less pressure on prices.

If we see imports come in at this point in large volumes, ultimately that's going to mute that signal for our domestic producers, which compromises our domestic industry. We are quite concerned about that, given that it is a very significant, high-value contributor to the economy in Canada, and ultimately to farm families in rural economies.

[David McKenzie, Conservative, Calgary Signal Hill, AB]

The opportunity to trade further with Mercosur presents opportunities, as long as we are pursuing that carefully. Is that a fair summary?

[Andrea Brocklebank]

In our case, we are actually very concerned and don't support further trade with Mercosur, because we don't have a reciprocal opportunity. We don't see the opportunity where we're going to be exporting beef to those markets, given the cost differential.

We are very concerned about some of the animal health standards and reporting standards in those markets, which ultimately could compromise our industry as well. They aren't equivalent to what is expected of Canadian industry.

[David McKenzie, Conservative, Calgary Signal Hill, AB]

That's fair enough.

The current government has signalled that it intends to pursue trade diversification. As a concept, Conservatives support that. Your concern is that it wouldn't be free trade; it would be imbalanced trade. Is that fair?

[Andrea Brocklebank]

I would say so.

When we talk trade diversification, I think our focus is expanding market access for the Canadian beef industry into equivalent markets where we see opportunities. Some of that is maintaining U.S. trade. We talk about diversification, but we still export over 70% of our production to the U.S. That's imperative to maintain, because we can open a lot of other markets, but if we lose any access to that market, we have a significant issue at that point in time. It can't come at the cost of existing market access or our industry.

[David McKenzie, Conservative, Calgary Signal Hill, AB]

Do you have concerns about animal health standards and equivalency? Again, protecting our close, integrated relationship with the U.S. must also have a bearing there.