Foreign Affairs Committee on Oct. 5th, 2026

[Yannick Mondy]

Thank you.

This is an important negotiation, and we recognize, certainly, that it affects a lot of families, workers and businesses.

I can refer you to the interview our chief trade negotiator, Janice Charette, gave to The House on August 28, in which she noted that we were at the outline of an agreement we could work towards but that there was still a lot of work to do, that we were looking for a mutually beneficial outcome to stabilize the relationship to avoid the 338 tariffs coming into effect and that we were looking for meaningful commercial relief. Ultimately, the U.S. was asking for too much and offering too little. That is what she said in the interview.

[Philip Lawrence, Conservative, Northumberland—Clarke, ON]

I would like to see a greater degree of detail, and the Canadian public would as well.

Thank you.

[The Chair, Liberal, Ahmed Hussen]

Thank you very much.

We go next to MP Clark.

You have five minutes.

[Braedon Clark, Liberal, Sackville—Bedford—Preston, NS]

Thank you very much, Mr. Chair.

Thank you to the officials for being here and for their work on behalf of all Canadians as always, but especially in recent months.

Over the last week, my colleagues and I were all at home in our ridings. My riding includes the largest business park in Atlantic Canada, the Burnside industrial park in Dartmouth, Nova Scotia, and there are hundreds of businesses over there, thousands, many of which rely very heavily—if not almost completely—on trade with the U.S. Of course, some of them are having a hard time.

I spoke with a business owner last week. Ninety per cent of their business is with the U.S., as it is for many others there—a majority and beyond—and they're struggling. They're facing hard decisions. They're doing all the right things. They're applying for the appropriate programs and we're hoping to support them, but what I hear from them pretty consistently, almost uniformly, is that even though they are in the crosshairs on this and they're affected negatively, they support what the government is doing on tariffs and countertariffs, because while this is an issue of economics, of course, it's also an issue of sovereignty. I think this is the position the government takes, and it's a position that I think a sizable majority of Canadians take as well, if you look at pretty much any polling on this issue.

I wanted to make that point fresh off the constituency week and talking with business owners at home.

Of course, as Atlantic Canadians, defence is always top of mind for us, and it's an area in which we see a huge amount of investment over the next number of years and decades and in the Halifax area in particular.

Mr. Larose, perhaps you could touch on this. I get a sense from your earlier comments that there are two streams in what we're talking about. One is economics and trade, and one is defence. Correct me if I'm wrong, but it seems to be your point of view that on the defence side of things, the security and defence arrangements between the United States and Canada are progressing on a rather smooth trajectory still, despite frictions in trade. Is it correct to summarize it in that way?

[Martin Larose]

Thank you for the question.

I think that's a fair assessment. We have daily co-operation between our soldiers and the soldiers of the United States. We usually have over 600 soldiers deployed in the U.S. in various missions, including at NORAD, the joint command in Colorado Springs. Roughly speaking, the Americans have about 300 soldiers and officers deployed in Canada.

On any given day, our men and women in uniform are serving shoulder to shoulder with their United States counterparts. I've fought in several wars together with them. Our servicemen and servicewomen died in Afghanistan and beyond. I think the collaboration on the defence side of things is very solid.

Thank you.

[Braedon Clark, Liberal, Sackville—Bedford—Preston, NS]

Thank you, Mr. Larose. I appreciate your comments on that.

You touched on NORAD in your answer. I know there's a major modernization of NORAD. As you alluded to, NORAD is one of the greatest postwar collaborations among countries anywhere and at any time, I would say. Could you give us a sense of the work that's going on right now between Canada and the United States to modernize NORAD and what results we might see coming out of that?

[Martin Larose]

The first thing I'd say, perhaps, is that Canada has lifted any policy restrictions to air and integrated missile defence: what the U.S. President called the “golden dome”. That is the first thing. We are in discussions with United States officials in this regard, but beyond that, we're building our capabilities, as I mentioned earlier.

For example, we are building over-the-horizon radar, which is extremely relevant for the NORAD organization. We're buying new tactical helicopters, new planes, new submarines and so on, and all these things, all these capabilities, are helping to detect threats from afar and to respond to these threats in a timely fashion. This is done jointly with U.S. counterparts.

Indeed, we are spending a significant amount of money in NORAD modernization to share the burden of the defence of North America.

[Niall Cronin]

The other place in which we're making investments that are being well received by the United States is in the Arctic. In March, the Government of Canada moved forward with a comprehensive plan for more than $35 billion in federal investments that includes $32 billion for forward operating locations in Yellowknife, Inuvik and Iqaluit and at our operating base, 5 Wing, in Goose Bay. These commitments also show how Canada is stepping up and supporting our sovereignty and resiliency, ultimately making us stronger at home and a better partner to the United States.

[The Chair, Liberal, Ahmed Hussen]

Thank you very much to the witnesses for appearing before the committee today and for your testimony.

We will now briefly suspend in order to prepare for the next panel.

Thank you.

[The Chair, Liberal, Ahmed Hussen]

I call the meeting back to order.

I would now like to welcome our witnesses for the second hour of this meeting.

First, we have Professor Andrea Charron, the director of the centre for defence and security studies at the University of Manitoba, who is appearing by video conference.

Next, we have Dr. Meredith Lilly, who is a full professor and the Simon Reisman chair in international economic policy at Carleton University.

Finally, we are joined by Jamie Tronnes, the executive director of the Center for North American Prosperity and Security.

Up to five minutes will be given for opening remarks, after which we will proceed with rounds of questions.

I now invite Professor Andrea Charron to make an opening statement of no more than five minutes.

Thank you.

[Professor Andrea Charron, Director, Centre for Defence and Security Studies, University of Manitoba, As an Individual]

Thank you for the invitation to speak today. I will confine my remarks to my area of research expertise and focus, specifically the defence relationship and, in particular, NORAD.

The good news is that NORAD continues to function as intended. At the operational level, the command remains effective and continues to provide a framework through which Canada and the United States co-operate on continental defence. However, several persistent issues warrant close attention.

My central message today is straightforward. Canada largely gets the NORAD it wants because the command is not a politically salient issue in the United States, relative to other defence priorities such as homeland defence and the golden dome. That arrangement has worked well for Canada, but it could change, and it could change quickly. Some strategic manoeuvring now would be prudent.

The first long-standing irritant in the bilateral defence relationship has been Canada's position on ballistic missile defence, now more accurately discussed in the broader context of integrated air and missile defence. This issue has been partially mitigated by Minister McGuinty's July 16, 2025, statement that the government has removed all restrictions on air and missile defence of Canada. While this does not signal policy change per se, it does create some strategic flexibility.

A second issue concerns possible changes to the U.S. unified command plan and the implications these could have for NORAD's command and control arrangements. At present, the commander of NORAD also serves as the commander of U.S. northern command, a dual-hatted arrangement that has provided continuity and efficiency. Should the United States revisit proposals to establish an Americas command, for example—as was suggested after the 9/11 attacks—or fundamentally change the geographic distribution of commands in a way that would bifurcate Canada from the continental United States, the underlying NORAD command structure could require reconsideration. It's important to remember that the NORAD agreement itself can be terminated by either party with 12 months' written notice.

Third, Canada should continue exploring opportunities to broaden participation in continental defence arrangements. Greenland, both geographically and strategically, makes considerable sense as a future partner. Canada, the United States, Greenland and Denmark already co-operate closely in the resupply of Canadian Forces Station Alert through Pituffik Space Base, and Denmark and Canada have a new defence co-operation memorandum of understanding.

There are, however, potential organizational changes that could weaken NORAD's distinctly binational character. For example, if USNORTHCOM and NORAD were to merge any operations positions within the command, Canada would need to insist on separate positions for NORAD and USNORTHCOM. The two organizations have different mandates, responsibilities and political foundations, and preserving those distinctions remains important.

What should Canada do?

First, with the Permanent Joint Board on Defence currently in abeyance, now is the time to reinforce the Military Cooperation Committee and begin to identify a future Canadian co-chair for a revitalized defence dialogue mechanism. Rather than selecting a sitting parliamentarian, consideration should be given to an individual with deep expertise in Canada-U.S. political, diplomatic, economic and military relations.

Second, Canada should restore a Global Affairs Canada political adviser position at NORAD headquarters in Colorado Springs. The current Department of National Defence technical adviser is essential, particularly given the scale and complexity of NORAD modernization projects. However, modernization is only part of the challenge. The agreement itself requires stewardship, and that is fundamentally a diplomatic and political function best performed by Global Affairs Canada.

Third, as the U.S. military reassesses future billet allocations, Canada must likewise continue to evaluate which positions best serve Canadian interests. In my view, Canadian billets within the United States military remain essential, particularly the deputy command positions in the Alaska NORAD region, the continental NORAD region and the NORAD headquarters itself. These posts provide Canada with influence, situational awareness and direct access to decision-making.

Fourth, and most importantly, NORAD modernization projects must be accelerated, especially those related to domain awareness and continental defence. Improved detection, tracking and attribution capabilities are foundational to every other aspect of continental defence. Canada cannot afford to wait for improvements to arrive according to a 20-year budget cycle.

In closing, NORAD remains valuable to both countries. However, successful institutions require constant tending. Canada should not assume that decades of stability guarantee future continuity. The best way to preserve the NORAD we have is to actively shape the NORAD we will need.

Thank you.

[The Chair, Liberal, Ahmed Hussen]

Thank you very much, Professor, for your statement.

I now invite Dr. Lilly to make an opening statement of no more than five minutes, please.

[Dr. Meredith Lilly, Full Professor, Simon Reisman Chair in International Economic Policy, Carleton University, As an Individual]

Good afternoon, Mr. Chair and members of the committee. It's a pleasure to be with you today.

My name is Meredith Lilly, and I am a professor of international trade at Carleton University.

A lot has changed since my last appearance at this committee, and Canadians across the country are closely following developments in Canada's trade dispute with the United States.

I'd like to use my time to encourage members to look past whether Canada returns to the negotiating table and instead focus on how we prepare to re-engage, because the details of an eventual agreement deserve our attention. I'm concerned about the perception that negotiations with the U.S. are frozen indefinitely. I don't believe this is accurate, and I anticipate that negotiations will resume in the coming months.

For example, if Mexico and the U.S. reach a bilateral agreement on tariff relief this fall, Canada would be urgently pushed back to the table. The Prime Minister has expressed a willingness to resume negotiations when a mutually beneficial agreement can be reached, and President Trump has suggested that talks could resume within weeks. Therefore, it is necessary to prepare for what a new bilateral agreement could look like.

In mid-August, both sides believed they had reached agreement on a set of terms before talks broke down. It is reasonable to expect those terms to now form the basis of the next round of negotiations, yet I expect even those elements Canada was prepared to accept in August to become more difficult to achieve now. The political context has shifted even further since the talks collapsed, and there is little appetite on the part of the general public to reach a deal.

Nevertheless, as Canada weighs the political downsides of re-engaging the U.S., our government must also calculate the cost of ongoing uncertainty for the Canadian businesses and workers most negatively impacted by tariffs. For example, we have witnessed several high-profile layoffs in Canadian manufacturing since the Trump administration announced tariffs on Canadian steel and vehicles: at Stellantis in Brampton, at Algoma Steel in Sault Ste. Marie and just last week at Stelco in Hamilton.

We know from decades of research that workers who lose their jobs in these circumstances often struggle to find new employment. This is especially difficult for workers who are older, who have less education or who live in smaller communities with few alternative sources of employment. Statistics Canada studies tell us that even those who find new jobs are likely to earn lower wages in their new roles.

Meanwhile, goods tariffed at 50% under the U.S.'s section 338 tariffs are effectively priced out of the U.S. market, and some Canadian products are now banned outright. The full impact of this most recent U.S. action and Canada's retaliation will only emerge in the coming weeks and months.

In addition, because of the deals other countries have reached with the U.S. to achieve their own tariff relief, those like the U.K., the EU, Japan and Korea enjoy simpler and often better tariff treatment for finished vehicles in the U.S. than Canada and Mexico do, further reducing our competitiveness.

While all of these challenges are very real, we cannot lose sight of the fact that CUSMA remains in place and that up to 80% of all Canadian goods continue to enter the U.S. tariff-free, provided that they are CUSMA-compliant. While I do not expect the U.S. president to withdraw from CUSMA, we must not underestimate the vital economic importance of this stable market access for the vast majority of our exporters to the U.S. That stability is what Canada must protect in any new agreement.

As the government considers the right conditions to resume negotiations, I urge it to set aside the impossible challenge of achieving trust with the Trump administration—the signature-in-pencil problem described by the Prime Minister in August. Instead, we must focus on the details of an agreement that Canada can live with whether it's in place for three months or three years. To me, there are too many more difficult scenarios facing Canada than the Trump administration reneging on the agreement.

The first would be reaching no tariff relief deal at all and the potentially devastating consequences for the most impacted Canadian sectors. The second would be reaching a really bad deal that cripples the long-term viability of Canada's manufacturing sector and potentially having to live with the agreement for several years after Trump leaves office. I believe our negotiators are acutely aware of the challenges presented by both scenarios and will work to achieve the right deal for Canada in these conditions.

To that end, I would encourage members of this committee to engage closely on the details of a potential deal, because that's what can best inform whether an agreement is in the interest of Canadians.

Thank you, Mr. Chair.

I'd be pleased to answer questions at the appropriate time.

[The Chair, Liberal, Ahmed Hussen]

Thank you for your statement.

I now invite Ms. Tronnes to make an opening statement of no more than five minutes.

[Jamie Tronnes, Executive Director, Center for North American Prosperity and Security, As an Individual]

Thank you, Mr. Chair and members of the committee.

I want to use my time to take the longer view of where this relationship stands, how we got here and what Canada must do next. If Canada wants to be taken seriously in Washington and beyond, we must begin with an honest accounting of how we were seen before Donald Trump returned to office. This relationship was not perfect before him, and it will not be perfect after him.

Canadians believe that Canada is a very well-respected country. We believe we've done something to earn our seat at the international table. We have fought and bled for the NATO alliance in the fields of Kandahar. However, what kind of ally have we been since then? Are we trustworthy?

In 2023, leaked Pentagon documents reported that Prime Minister Trudeau had privately told allies that Canada would never reach the 2% NATO spending target. In May 2024, 23 U.S. senators from both parties warned that Canada was failing its NATO obligations. Canada's answer was a promise to reach 2% by 2032 and to fund the NATO Climate Change and Security Centre of Excellence in Montreal. The NATO delegations were furious.

The same pattern held on energy. In August 2020, Chancellor Olaf Scholz came to Canada looking for an alternative to Russian gas. He was told there was no business case for it. Japan came asking a few months later. Our allies needed oil, gas, critical minerals and deterrence, but they were too often offered only speeches in return. It needs to be said plainly and with some humility: Canada was not seen by others the way we saw ourselves.

Donald Trump has shaken Canada out of our complacency. We have had to take a long look at what it would mean to lose tariff-free access to our largest trading partner and our biggest military defender. We also need to understand what it is our friends around the world want from us.

The response has been real. Canada reached the 2% NATO spending target within the 2025-26 fiscal year, years ahead of the previous government's timeline. Parliament passed the Building Canada Act. The new Major Projects Office has received 28 nation-building initiatives. On October 1 the government designated the Pacific link pipeline as the first project of national interest under that law. It will carry an additional million barrels a day to Asian markets. West coast LNG is being accelerated. Canada is expanding market access for foreign investors, offering globally competitive tax incentives and strengthening the case for business here.

More has been done in 18 months to clear the path for major resource and energy projects than in the decade before. This is a decisive break from the years of economic policy that treated our resource wealth as an embarrassment rather than an asset.

Canada is right to seek new partners, but history warns us about how far that impulse can carry us. In 1957, John Diefenbaker pledged to shift 15% of Canada's imports from the United States to Britain. It never happened. After the Nixon shock, the government of 1972 adopted the “third option”, to reduce our reliance on the American market. Within two decades, we were more dependent on it, not less. Geography is stubborn.

The Prime Minister has said that the long era of ever-closer economic integration with the United States is over. He may be right, but the end of ever closer is not the beginning of ever further. The government's own goal is to double our non-U.S. exports within a decade, not to halve our U.S. ones. That is the right frame. Diversification is not an either-or; it is a “yes, and”. Our shared geography, history and infrastructure mean that the American market will remain essential to a strong and prosperous Canada.

Nowhere is this clearer than in security. Five Eyes has been overwhelmingly beneficial to Canada. Our co-operation on border security, criminal investigations, law enforcement and intelligence keeps Canadians safe every day. NORAD remains essential.

In 2024, Canada, Finland and the United States launched the ICE pact to rebuild our allied icebreaking capacity in the Arctic. Although Washington is now moving to strip Canadian goods from federal civilian procurement, Canadian defence firms remain exempt from the buy American restrictions under the DPSA. We should not hand anyone an excuse to change that.

This brings me to defence procurement. Canada has moved fast to secure its economic health. We must move with the same urgency to rebuild our military. This requires a clear-eyed overhaul of how we buy. We have committed to NATO's new target of 5% by 2035, but money is not capability. Capability comes from decisions.

The F-35 procurement fiasco has shown us that indecision is itself a decision. We pay for it in pilot training, basing and readiness. Canadian firms build components for F-35s flying in the air in countries all around the world. The American defence industrial base supports tens of thousands of Canadian jobs.

Canada should broaden its suppliers when that serves our interests, but no procurement decision should be made to win a news cycle in a trade dispute.

The Canada-U.S. relationship may never fully heal, but it remains in Canada's best interests to stay aligned with our neighbour economically and—we must hope—strategically.

Tariffs now threaten Canadian jobs, Canadian prosperity and ultimately Canadian sovereignty. Our response has been to match the moment with speed and decisive leadership, even if it means breaking a few things along the way.

Economic complacency leads to economic dependency. We have tried complacency, and we know where it leads. Canada must build a stronger, more prosperous and more secure country, one that commands respect in the world because it has earned it.

Thank you, and I look forward to your questions.

[The Chair, Liberal, Ahmed Hussen]

Thank you for your statement.

We now go to questions from the floor, beginning with MP Mantle.

You have six minutes.

[Jacob Mantle, Conservative, York—Durham, ON]

Thank you, Mr. Chair.

Thank you to our witnesses for appearing and providing valuable testimony on this important issue.

Dr. Meredith, you implored members of this committee and, I think, all parliamentarians to take a keen eye and look at what a potential deal in the future might look like with the United States.

My question for you is, how should members of the opposition do that when the government refuses to provide any information about what's on the table for a deal? All we're left with is essentially, “Just trust me, bro”, from the Prime Minister. How shall we assess whether a deal is good without any details?

[Dr. Meredith Lilly]

Thank you for the question. It's a good one.

Certainly, continuing to ask for details is important. I accept and respect that there are reasons for negotiations and that some parts of them need to be conducted under the mantle of secrecy.

However, there is a lot opposition MPs can do, including meeting with stakeholder groups to find out what would be acceptable to them in various scenarios.

The reality is, you can't just take what you see in the paper.

For instance, there are many different stakeholders in the auto sector, and their interests don't always align. Therefore, if you really want to understand what needs to be achieved on tariff relief for autos, you need to understand what different players in the sector want; they don't all want the same things. In my experience, they'll be pretty forthcoming in telling you what they want.

I would encourage you to spend quite a bit of time understanding that and speaking to small businesses in your constituencies to understand what they need. We know that, for instance, only about 20% of small businesses in Canada export at all, and those that do export most likely export to the United States. What are they looking for specifically?

That would be my suggestion.

[Jacob Mantle, Conservative, York—Durham, ON]

Do you think it's fair to ask the government to provide a bit more detail on what's on the table?

[Dr. Meredith Lilly]

It's fair to ask for anything. What the government chooses to share is the government's prerogative. However, I think it is worthwhile for opposition leaders to receive confidential briefings. This probably happened a few times when I previously worked in government. There are ways for the opposition to receive information. You may be asked for assurances.

[Jacob Mantle, Conservative, York—Durham, ON]

That's fair enough. Thank you.

In your view, are Canada's countertariffs helpful or harmful to Canadian businesses, or is it somewhere in between? What's your view on them?

[Dr. Meredith Lilly]

It's very specific. You asked about businesses. If inputs from the United States are now much more expensive, that's going to hurt their interests.

At the same time, in my understanding, having looked at the retaliation and particularly the August list, much of what the government did was try to control the effects of the 338 list.

Take one category of products, which is skin care and makeup, something women wear. A lot of women wear it, anyway. The U.S. put 50% tariffs on Canadian skin products going into the United States. This was retaliated for by Canada.

I imagine the economic logic would have been to level the playing field for Canadian businesses, which will now effectively be pushed out of the U.S. market. A tariff of 50% would make those items very expensive, and Americans would be unlikely to purchase them. Therefore, to level the playing field, the tariff was put in place. This means Canadians are likely to be spending more on those products.

[Jacob Mantle, Conservative, York—Durham, ON]

Thank you.

I have one last question on the tariffs and then one question for you, Ms. Tronnes.

My understanding, from the negotiating side, is that imposing these tariffs is supposed to put us in a better negotiating position. We impose them to perhaps create some sort of leverage in the eyes of the government, although I would dispute this.

Do you have any evidence that imposing these tariffs has put us in a better position?

[Dr. Meredith Lilly]

The discussion that's being had among trade experts is less about using retaliation as leverage and is instead more about using retaliation as what we call a safeguard, in trade terms, to protect the Canadian market from the damage of U.S. tariffs.

For this reason, there is discussion among trade experts that perhaps the way Canada has gone about this is actually more compliant with international trade rules than the way the U.S. has gone about it.

[Jacob Mantle, Conservative, York—Durham, ON]

Thanks.

I have about 40 seconds left, so I want to ask one question of our other witness.

Last year, you were before the trade committee talking about foreign interference. You said at this committee that they—referring to the United States—want to know that Canada is going to take foreign interference seriously.

The deadline for registrations for Canada's foreign agent registry was on Friday. If you look at the registry this morning, you'll see that there are two registrations. What's your response to that? Is two what we should expect, or should we have expected hundreds on this registry?