Evidence of meeting #43 for Foreign Affairs and International Development in the 45th Parliament, 1st session. (The original version is on Parliament’s site, as are the minutes.) The winning word was defence.
A video is available from Parliament.
Liberal
Bloc
Alexis Brunelle-Duceppe Bloc Lac-Saint-Jean, QC
Thank you, Mr. Chair.
Ms. Lilly, the auto industry accounts for 125,000 direct jobs in Canada. The oil and gas sector accounts for 192,000 direct jobs, and surprisingly, the forestry industry accounts for 200,000 direct jobs across Canada. Of the three sectors, forestry is the hardest hit by the tariffs. It's facing countervailing duties on one hand and tariffs from the U.S. on the other.
You said you had taken part in a number of trade agreement negotiations. Don't you think it would be normal for the government to prioritize the forestry industry in the negotiations, since we know it's the most affected by the tariffs and the biggest employer in the country?
Isn't it wrong that all the talk during the tariff war has been about the auto and oil and gas sectors, not about the forestry sector?
Full Professor, Simon Reisman Chair in International Economic Policy, Carleton University, As an Individual
It's really vital that more be done to support the forestry sector in Canada. It does provide a great deal of jobs. A big difference between the forestry sector and the auto sector is that those jobs are often in rural communities; as I said earlier, when those jobs go, it's much more difficult to find replacement employment.
A lot should be done to support the forestry sector. Unfortunately, we have been without a softwood lumber agreement in Canada since 2016. This is an ongoing, long-term challenge. A huge problem is that the United States doesn't really want a solution. They have been open about this. I do think about the forestry sector, and I believe a lot more should be done.
Bloc
Alexis Brunelle-Duceppe Bloc Lac-Saint-Jean, QC
Ms. Charron, given the current state of our relationship with the U.S., a number of people have said that it would be a good idea to suspend the agreement to purchase the F‑35 fighter jets until proper negotiations resume and a deal is reached. I'm not for or against the proposal. I would just like to hear your expert opinion, since that's why you're here.
Is suspending the agreement a good or bad idea?
Prof. Andrea Charron
I can't really speak to the tactics and decision of the government to delay. My concern is having the capabilities. There are certainly problems if we have multiple platforms, because the competitors—the Gripen and the F-35—have different capabilities, different platforms, different training, different doctrine and different pilot skills needed.
We need a decision because delays mean that right now we have CF-18s and we have some F-35s. We really need a full complement to maintain both our NORAD and our NATO operations.
Liberal
The Chair Liberal Ahmed Hussen
Thank you very much.
Next we will go to MP Duncan.
You have five minutes.
Conservative
Eric Duncan Conservative Stormont—Dundas—Glengarry, ON
Thank you, Chair.
Thank you to our witnesses for being here today. It's been informative.
Dr. Lilly, I want to follow up. We talked about countertariffs in the first hour, as well, and some transparency around those. You've worked in the Prime Minister's Office before, have been an adviser and have been around a lot of information and data collection when it comes to international trade issues.
I'm not sure what is more concerning for me. We had panellists earlier today who didn't confirm whether they have the data. To me, this is a problem of either not having the data or refusing to share it.
Can you speak to the importance, when it comes to countertariffs, of understanding the impacts, the costs of goods and job losses that could come from this? How important is it to have this in the conversations from a transparency perspective for Canadians to judge so that while we find the tariffs the Americans have imposed on us unfair and unjust, we make sure that the countertariffs we're putting on aren't a double whammy to Canadian businesses and jobs?
Full Professor, Simon Reisman Chair in International Economic Policy, Carleton University, As an Individual
As far as information goes, in my view, there's nothing secret about retaliatory tariffs. The government should be very forthcoming and transparent about the level of tariffs, who's being impacted and what it's costing. The information should be forthcoming.
Part of the challenge, perhaps, for government officials may be that the finance department often holds the bag, so finance is the one with the answers.
In my view, all of this should be open, transparent and available to Canadians.
Conservative
Eric Duncan Conservative Stormont—Dundas—Glengarry, ON
I appreciate that, and I would agree.
Ms. Tronnes, from the defence perspective, I want to speak about Canada and the U.S.'s relationship within NATO. Canada has increased its defence spending to the 2% target, and it's continuing to grow from there.
In a story from Politico last week, we see that the Pentagon's policy chief, Elbridge Colby, is organizing a meeting—they're calling it the Bergen group—of select countries that are meeting later this month to talk about the future of NATO. Canada's been excluded from the meeting.
Do you want to speak a bit to the difficulty? Although we are stepping up on that front, do you have any advice on how we can make sure we are inserted in those conversations on something so important as the future of NATO and what it's going to mean? For Canada to be excluded speaks to the difficulty when the Americans are leading those meetings.
Executive Director, Center for North American Prosperity and Security, As an Individual
Yes, I would say that Canada needs to demonstrate its ability to ramp up faster. To do that, one of the biggest signals that the U.S. and other allies are looking for is a rehaul of our procurement system that, quite frankly, isn't happening. I would say that we don't have the capacity to move as fast as we need to on the defence procurement side, as we do with the “one policy, one procedure, one review” position of the government.
Just as we're trying to move fast to get the economy moving, we also need to start moving faster on procurement. This is a signal to our allies that we're getting serious. Indecision is a decision. Our allies are looking at us dithering yet again on an airplane when other countries are getting way ahead of us, even though we invested hundreds of millions of dollars to develop it and we have the rights to fly that aircraft. We need to start stepping up and demonstrating to our allies that we take our own security very seriously and that we aren't just throwing money into the ether but actually have a way to spend it.
Conservative
Eric Duncan Conservative Stormont—Dundas—Glengarry, ON
To build on that as a connection—speaking about the forced labour issue and the tariffs, the section 301 investigation that was imposed on Canada and about 60 other countries earlier this year—I'll ask you this: Would you agree with me that the piece of legislation the Liberals have introduced to counter that, Bill C-35, is one thing, but it's going to be a matter of the actual implementation at a fast speed, giving more tools to the CBSA and then using those tools and stopping forced labour, turning shipments around or confiscating them and disposing of them, and penalising the importers that are doing that? Do you agree with me that it's not so much the legislation, when it comes to NATO's 2% target, but following through in a timely manner on the implementation?
Executive Director, Center for North American Prosperity and Security, As an Individual
I think the section 301 forced labour tariffs have nothing to do with forced labour. We can demonstrate that we'll do better, and morally as Canadians, we should do better on forced labour. This is a position we should take as a government. I think pending court decisions that are upcoming will argue that the section 301 tariffs have nothing to do with forced labour and, while I'm not a lawyer, I see merit in that argument.
October 5th, 2026 / 12:55 p.m.
Conservative
Liberal
The Chair Liberal Ahmed Hussen
Thank you very much, MP Duncan.
We go next to MP Dhillon.
You have five minutes.
Liberal
Anju Dhillon Liberal Dorval—Lachine—LaSalle, QC
Thank you, Mr. Chair.
Thank you to our witnesses for being here today.
I'll start my questions with Mrs. Lilly.
You said something very interesting during your testimony: that you're concerned about perceptions that negotiations are frozen. Can you please elaborate a bit on this?
Full Professor, Simon Reisman Chair in International Economic Policy, Carleton University, As an Individual
Yes, I'm concerned that it would appear in the public media environment that Canada will not be back at the table any time soon. I think the vast majority of Canadians believe this to be the case, and I think they would be surprised to learn that Canada will be back at the table. I think signals suggest that Canada may be back at the table very soon, and it would be worthwhile to prepare Canadians for that.
Liberal
Anju Dhillon Liberal Dorval—Lachine—LaSalle, QC
You've mentioned that up to 80% of CUSMA products are going into the U.S., so can you explain why some people are painting a picture of gloom and doom? What are you envisioning in the coming weeks and months—which is also something you very elaborately explained before?
Full Professor, Simon Reisman Chair in International Economic Policy, Carleton University, As an Individual
The number one issue that Canadians are polled on that they're concerned about is affordability in the economy, and the number two issue is the Trump administration. It is politically expedient to spend time focusing on disputes with the Trump administration, because that is what sells newspapers.
Liberal
Anju Dhillon Liberal Dorval—Lachine—LaSalle, QC
Thank you.
In your role, can you please tell us what you think would be a fair and mutually beneficial agreement between our two countries?
I know it's a large question.
Full Professor, Simon Reisman Chair in International Economic Policy, Carleton University, As an Individual
Yes, it is a large question. I don't want to dodge it, but at the same time, it will come down to very specific outcomes.
As I mentioned earlier, what we achieve on autos matters a great deal down to small percentages. What we achieve on steel and aluminum matters a great deal if this is broadly applied or if it's full of carve-outs—to the point Ms. Tronnes made. Our negotiators will have to strike a deal that includes a number of elements, and some groups will be more satisfied than others in what those are. I can't tell you what a mutually beneficial agreement would be, because there could be several scenarios that would be mutually beneficial. It really does come down to the details, and I would encourage us to think about the details as the potential outlines of a deal emerge.
Liberal
Anju Dhillon Liberal Dorval—Lachine—LaSalle, QC
You mentioned the manufacturing sector, as well as the fact that our leaders will eventually change in both countries, and that a bad deal should not be had at this moment because it will have impact for years to come for Canada, and for the U.S. as well. In your opinion, what would a bad deal be in today's context?
Full Professor, Simon Reisman Chair in International Economic Policy, Carleton University, As an Individual
We don't know how long a very bad deal could remain in place. It could be gone in a matter of weeks, but it could also last years. My concern is that, particularly in the United States, we don't know what administration will follow the Trump administration. While I anticipate it will likely be more stable and offer more certainty to trade partners, I still anticipate that, regardless of whether that's a Republican administration or a Democrat-led administration, tariffs from the United States will be here for the long term. I also anticipate protectionism to continue, so we shouldn't assume that, if we sign a very bad deal now, we'll be able to roll that back in two years' time. That is the reason our negotiators really have to be laser-focused on the exact levels of tariff relief that will provide the stability and certainty that Canadian businesses need.
Liberal
Anju Dhillon Liberal Dorval—Lachine—LaSalle, QC
Thank you for pointing out to our committee, and to the Canadian public as well, that we have to think in terms of our long-term future and not be tied in by these contracts. You also mentioned, interestingly, that there is less of an appetite...among the Canadian public as well.
Why do you think that August's negotiations will be even more difficult going into the future? This is also something you mentioned briefly in your opening statement.
Full Professor, Simon Reisman Chair in International Economic Policy, Carleton University, As an Individual
Thanks for the question.
I think that Canada was prepared to concede some very difficult things in August. Unfortunately, now, as a result of the shift in political context, if the exact same set of outcomes were presented again, I think it would be more difficult for the government to accept them. That was all I meant.