Foreign Affairs Committee on Oct. 5th, 2026

[Yannick Mondy]

Normally, retaliatory tariffs are first recommended to the government, and they are set collaboratively based on analyses that go through Global Affairs Canada and the Department of Finance, which is responsible for import policies and the implementation of the Customs Tariff. When we do these analyses, we look at both.

In this case, we looked at how to set retaliatory tariffs that target the affected sectors without causing unintended or additional consequences. Our industries are very integrated, so we have to be careful about the tariffs that are applied. That is also why the Department of Finance has implemented a tariff remission system. In some cases, it still allows imports for some businesses at a reasonable cost. That said, there is no doubt that there is an impact.

[Alexis Brunelle-Duceppe, Bloc, Lac-Saint-Jean, QC]

Actually, that's not really what I was asking.

Are there specific processes for each territory, or is this done while considering Canada as a whole?

[Yannick Mondy]

I would say both. We look at the impact based on where the companies are located. It's not necessarily done at the provincial level; it's done at a national level, but we take into account where the affected businesses and sectors are located.

[Alexis Brunelle-Duceppe, Bloc, Lac-Saint-Jean, QC]

I ask this because the Assemblée national du Québec criticized the retaliatory tariffs that were implemented targeting certain economic sectors.

I wonder to what extent Quebec and the other provinces are consulted when retaliatory tariffs like that are implemented. Obviously, from a political standpoint, it doesn't suit everyone when the federal government implements retaliatory tariffs that affect the economy of Quebec or of a particular territory.

[Yannick Mondy]

That very important question is often at the core of the challenges related to the implementation of retaliatory tariffs. Obviously, regardless of the tariffs or circumstances, there will always be someone with an opposing point of view.

[Alexis Brunelle-Duceppe, Bloc, Lac-Saint-Jean, QC]

To what extent is there consultation? What we're hearing a lot is that Quebec and the other provinces don't seem to be consulted about implementing retaliatory tariffs or discussing things with the Americans. I'm not making this up; many media outlets in Quebec and, I imagine, in the rest of the country have reported this. This shows that when the federal government is taking action on our relationship with the Americans, it does not take that into account as much as it should.

[Yannick Mondy]

What I can say about that is the Prime Minister was in contact with his provincial counterparts when the negotiations ended, just before August 21.

I can also say that, since then, we have been consulting regularly with provincial and territorial officials. We met with them in Ottawa two weeks ago to discuss these issues. We work with them all the time. Provinces are being consulted.

[Alexis Brunelle-Duceppe, Bloc, Lac-Saint-Jean, QC]

You said earlier that negotiations ended in August, but before that, in 2025, the digital services tax had already been dropped. We even intervened somewhat in the affairs of an independent organization, the Canadian Radio-television and Telecommunications Commission, or CRTC, by asking it to abolish royalties for content creation. Those are two things that were dropped.

Can you tell the committee what we got in exchange for these concessions to the Americans?

[Yannick Mondy]

I can't really discuss the logic that was followed at the time, but I can repeat what was said publicly about royalties—

[Alexis Brunelle-Duceppe, Bloc, Lac-Saint-Jean, QC]

Many people say it didn't make sense.

[Yannick Mondy]

What I can say is that the logic behind the policy is not just related to the negotiations.

[Alexis Brunelle-Duceppe, Bloc, Lac-Saint-Jean, QC]

At the department, you're responsible for trade relations with the U.S., correct?

[Yannick Mondy]

Yes.

[Alexis Brunelle-Duceppe, Bloc, Lac-Saint-Jean, QC]

In 2025, Mr. Trump tweeted calling for the digital services tax to be abolished. The next day, following a tweet, Mr. Carney cancelled the implementation of this tax, saying it would allow us to make gains and return to the bargaining table. However, we never went back to the bargaining table.

I imagine Canada got some benefit from that concession. If not, are we saying we dropped the digital services tax and got absolutely nothing in return?

[The Chair, Liberal, Ahmed Hussen]

We'll have to stop there because you're over time.

We'll go next to MP Duncan.

You have five minutes.

[Eric Duncan, Conservative, Stormont—Dundas—Glengarry, ON]

Thank you, Mr. Chair.

Thank you to our witnesses for being here this morning.

I want to follow up on the countertariffs, if I could, Director General Mondy, and on what Mr. Mantle was asking about regarding the data collection that is being done either by Global Affairs or by the Department of Finance. You mentioned it's in review right now. On the idea of collecting data on, for example, the impacted costs of goods that are being tariffed and on job losses, are you quantifying this and gathering information? Is the idea of doing that something you would share with the committee, or is it still under review?

When we have tens of billions of dollars in countertariffs being proposed, I would think the government would be doing a very close study and analysis of the figures to understand the costs of goods, the job losses that are happening and the impact they are having on Canadian businesses.

[Yannick Mondy]

We are in close and constant contact with our stakeholders, including companies affected by the countertariffs, to understand precisely not only jobs affected but also costs for businesses. This is also part of the information collected whenever we are considering remissions on countermeasures.

That's what I can say about this.

[Eric Duncan, Conservative, Stormont—Dundas—Glengarry, ON]

It sounds as though there's not a lot of formal data collection going on when it comes to tracking the impacts of the costs of goods on job losses. If there isn't anything, I think it's something the government should be doing to understand that Canadians are being asked to buy into tens of billions of dollars in countertariffs, which have an impact on the Canadian economy, on jobs and on the cost of goods, without really being able to quantify that and understand one way or the other. That's enough information there.

Mr. Cronin, I want to ask you about Bill C-35 and the section 301 tariffs on forced labour that the American administration brought in earlier this year.

Have you had any conversations with your American counterparts on this specifically since Bill C-35 was tabled by the government to address this issue, and what has their reaction been to the change in legislation or the attempt to address this in an effort to get this 10% tariff removed?

[Niall Cronin]

Thank you for the question.

To respond directly, I have not spoken to my counterpart at State Department about this specific issue. However, I am aware that colleagues across our network of the embassy and consulates general have engaged with the Americans to explain our approach on forced labour. On the steps Canada has taken, it's an education process, and we need to explain and advise, but generally they have been received well.

[Eric Duncan, Conservative, Stormont—Dundas—Glengarry, ON]

Is that “well” as in you believe it would be enough to warrant the removal of them, or are they waiting for more information? That it's going well is a very general response. If the legislation passed, would they consider the removal of those, or are they looking for further substantiation of the policy?

[Niall Cronin]

Our position has always been that tariffs the U.S. administration has imposed on Canada are unjustified and unfair. I think we stand behind the systems we have in place to promote free and fair trade with the United States.

This is another example of steps that the government is taking and considering to move forward and to explain to the United States, and our counterparts across that country, that they have a reliable, dependable partner and that there are advantages to the United States in having Canada as their northern neighbour.

[Eric Duncan, Conservative, Stormont—Dundas—Glengarry, ON]

In relation to forced labour and the work the American administration does, they have banned and turned around thousands of shipments in recent years. In Canada we've done drastically less in terms of enforcement and being successful when it comes to the issue of forced labour in our supply chains.

In the context of the Canada-U.S. relationship, when it comes to the implementation of this legislation, can you talk about how Global Affairs Canada and their partner, the CBSA, will work better with our American counterparts to identify regions, countries and sources? Part of the responsibility of the minister is to publish a list of products or of companies or regions that are suspected of taking advantage of forced labour.

Have you begun conversations about who might be listed and who won't be? What will your relationship with the United States be when it comes to working together to identify those?

[Niall Cronin]

One point I would like to emphasize in the Canada-U.S. relationship is the importance of co-operation around ensuring that our border is secure. The government has invested $1.3 billion in a border plan to strengthen resources at the border. Those efforts have been well received, positively received, by the U.S. administration. I think that co-operation and collaboration between our law enforcement agencies is strong and deep, and at the operational level, it is very successful.

That is another area in which co-operation, and the strength of that co-operation, is in not only Canada's interest; it's also in the interest of the United States. It brings benefit to our people on both sides of the border.

[The Chair, Liberal, Ahmed Hussen]

Thank you very much.

We will go next to MP Vandenbeld.

You have five minutes.

[Anita Vandenbeld, Liberal, Ottawa West—Nepean, ON]

Thank you, Mr. Chair.

I'd like to direct my questions to Mr. Cronin.

Of course, in addition to the unjustified tariffs that are having an impact on what has been decades of mutual prosperity between our two countries, you mentioned in your remarks—I wrote it down, because I thought it was quite poignant—that we have a “broad-based, deep, multi-dimensional and enduring” relationship with the United States.

I wonder if you could elaborate on this relationship.