Foreign Affairs Committee on Oct. 7th, 2026

[The Chair, Liberal, Ahmed Hussen]

I call this meeting to order.

Welcome to meeting number 44 of the House of Commons Standing Committee on Foreign Affairs and International Development. Pursuant to Standing Order 108(2) and the motion adopted by the committee on February 12, 2026, the committee is meeting regarding its study of the bilateral relationship between Canada and the United States of America.

Today's meeting is taking place in a hybrid format, pursuant to the Standing Orders. Members are attending in person in the room and remotely using the Zoom application.

I would now like to welcome our witnesses for the first hour.

From the Automotive Parts Manufacturers' Association, we're joined by Flavio Volpe, president, by video conference. From the Business Council of Canada, Goldy Hyder, president and CEO, is also joining us by video conference. From the Canadian American Business Council, we have Beth Burke, chief executive officer, who is appearing in person.

Welcome. Up to five minutes will be given for opening remarks, after which we will proceed with rounds of questions from members. I strongly urge folks to not speak beyond five minutes. If you wish to deliver longer remarks, you have the option of submitting your entire longer remarks to the committee on paper.

I now invite Ms. Burke to deliver her remarks of no more than five minutes.

Thank you.

[Beth Burke, Chief Executive Officer, Canadian American Business Council]

Thank you, Mr. Chair, Vice-Chairs and members of the committee. Good afternoon. Thank you for the invitation.

I'm Beth Burke, the CEO of the Canadian American Business Council. We are the only bilateral, non-profit, non-partisan organization dedicated to the Canada-U.S. relationship, representing close to 100 companies across sectors on both sides of the border.

Since 1987, we've advocated for free and fair trade between our two countries. Our members operate every day across what has long been one of the most integrated economic relationships in the world. They employ Canadians and Americans. They build products, sometimes even together. They share supply chains. They represent an integrated and successful North America.

That bilateral perspective is what I hope to offer here today. We sit at the table with American and Canadian companies alike—companies that bolster our economic resilience—and I want to share what I'm hearing from both.

Let me be direct about where we are.

Things are not where any of us want them to be. Talks are suspended, and 50% tariffs are in place on a broad range of Canadian goods. Canada has responded with tariffs on U.S. goods accordingly. However, I want to be clear: While we are in a difficult moment, this relationship is not broken.

Underneath the uncertainty and turbulence in this moment is an economic relationship that remains extraordinarily deep and difficult to replicate, one built on decades of integration and collaboration. Nearly two-thirds of our bilateral goods trade is intermediary inputs—components and materials that cross our border several times before they become a finished product. A tariff on either side raises costs for manufacturers, consumers and workers on both sides. Roughly 1.5 million American jobs and 2.4 million Canadian jobs are directly linked to this relationship.

This year, the CABC commissioned Oxford Economics to help move this conversation beyond the rhetoric with more evidence and an independent assessment of the USMCA, or CUSMA, and potential trade outcomes.

Here are the numbers at a glance: A successful renegotiation would add $253 billion Canadian to the Canadian GDP over the next decade; a breakdown would cost $271 billion. For a Canadian household, the difference between these two paths is about $846 a year. For the Canadian workforce, the difference is an additional 98,000 jobs or a loss of over 100,000 jobs.

Americans have real skin in this game too, and that is the message we, without a doubt, carry in Washington. Canada is the number one export customer for more than 30 U.S. states, including Michigan, Indiana, Texas and Arizona. Three in four Americans say that the USMCA-CUSMA is good for the U.S. economy, and more than eight in 10 say that trade with Canada strengthens U.S. national security.

One thing that can get lost in these numbers is that when you impose costs at the border, they rarely stop there. They trickle into workforces, communities and the individual homes of everyday people. However, here's what gives me hope: Business relationships aren't built on a political moment. Companies have deep, long-standing ties with suppliers and customers across the border, and those relationships are holding. We are relying on them, but they cannot carry the load forever.

Before I conclude today, I would offer three take-aways to this committee.

First, I hope both sides can get back to the table. Both governments need to return to negotiations with the goal of reaching a deal that restores predictability for both economies. Every day without a deal adds new hurdles for businesses and impacts investment decisions in ways that are difficult to reverse.

Second, look beyond tariffs. As we've long advocated, regulatory alignment and mutual recognition deliver real savings, and governments on both sides are listening. While tariffs have largely been the focus of the conversation, there remain opportunities outside those negotiations to bolster our economies together.

Third and finally, use the business community. CABC stands ready to convene, to share data and to make the case for this relationship to the American lawmakers, governors and businesses that have a stake in getting it right.

Free and fair trade, CUSMA and integration aren't favours one country does for the other. These are frameworks that benefit workers, businesses and consumers in both countries. The question isn't whether Canadians and Americans will keep doing business together. We will. The question is whether it will be stable and profitable or costly and turbulent. When we work together, we compete better, create more jobs and keep our people safe together.

Thank you. I look forward to your questions.

[The Chair, Liberal, Ahmed Hussen]

Thank you very much for your statement.

I now invite Mr. Volpe to deliver his remarks.

[Flavio Volpe, President, Automotive Parts Manufacturers' Association]

Mr. Chair and members of the committee, thank you for the invitation once again.

I've spent over a decade representing companies that sit in the middle of the Canada-United States automotive supply chain. If I can leave the committee with one idea today, it's this: The Canada-U.S. economic relationship is not simply trade across the border. In many sectors, it's a production system built across that border.

Nowhere is that clearer than in the automotive sector. We don't really trade automobiles with the United States. We make automobiles together. Canadian parts go into American vehicles and American parts go into Canadian vehicles. Components, materials and tooling can cross the border several times before a finished vehicle reaches a consumer. A tariff on one side of this industry does not stay on one side of the border. A tariff raises costs inside the same production system, affecting not just Canadian plants but also American assembly plants, suppliers, dealers and consumers.

That reality should give Canada confidence. It should not make us complacent.

The assumptions that governed this relationship for decades are being tested. Canada, therefore, has to be clear about what it is trying to preserve: productive capacity, investment, skilled employment, intellectual property and an ability to make things here.

We should not negotiate against ourselves. A plant that closes, a tooling capability that disappears or skilled people who leave this industry cannot simply be recreated when political conditions improve. Industrial capacity is economic security. Increasingly, it's national security as well, and that requires us to be much more deliberate about how Canada uses its own economic power.

Take defence spending. Canada is preparing to spend substantially more on national defence. We should absolutely meet our security obligations, but we should also recognize that defence procurement is one of the most powerful industrial policy tools available to any national government. If Canadian manufacturers can build something here, Canadian public procurement should begin with the presumption that we should build it here. That doesn't mean closing ourselves off from allies or pretending that Canada can produce every platform on its own. It means using major defence expenditures to create Canadian capacity, Canadian intellectual property, Canadian supply chains and Canadian jobs wherever that is practical. We should not spend billions of Canadian taxpayer dollars strengthening someone else's industrial base and then spend billions more trying to rebuild our own.

That same realism should apply to automotive policy.

Canada is a major vehicle market. Canadians make choices every day that create enormous value for global automakers. We should think more seriously about the relationship between a carmaker's success in the Canadian market and its manufacturing footprint here.

I'm not suggesting that governments tell Canadians what vehicles to buy or dictate where every model must be built, but we should stop trading market access, consumer demand and production decisions as if they exist in a completely separate universe. When governments design incentives, procurement programs, regulatory frameworks and investment supports, there should be a clear advantage for companies that make long-term production commitments to Canada, in Canada, particularly when that production reflects the vehicles that Canadians are actually choosing to buy. If an automaker is gaining market share in Canada, we should want Canada to gain some production share as well. It's not protectionism. It's reciprocity.

More broadly, I'd suggest three principles going forward.

First, defend the North American rules that we negotiated. If a vehicle or a part satisfies North American rules of origin, it should receive North American treatment. Businesses make investment decisions years in advance. Rules only have economic value if compliance produces predictability.

Second, make Canada's case in the United States in terms of American self-interest, not Canadian grievance. Our strongest argument in Washington is not that Americans should be nice to Canada. It's that Canadian production makes American production stronger. Canadian suppliers invest in the United States and employ tens of thousands of Americans. Canadian components keep American assembly lines going. Canada is not going to outmuscle the United States. That's not our leverage. Our leverage is that after 60 years of building together, replacing Canadian capacity is often expensive, disruptive and sometimes impossible in the short term.

That's why our engagement cannot stop at the White House. It has to include Congress, governors, automakers, suppliers, unions, investors and the communities whose jobs depend on this system.

Third, Canada needs to build resilience at home. That means diversifying markets, but it also means building more things here. It means using procurement strategically. It means making defence spending an industrial opportunity as well as a security obligation. It means making sure that our automotive policies reward companies that see Canada not simply as a market of 40 million consumers but also as a place to invest, engineer and manufacture.

Diversification should not mean disengagement from the United States. We should build more with the rest of the world without pretending that we can or should build less with our largest customer and closest industrial partner.

Our competitors will not wait to see us settle our differences, so we should approach the U.S. neither anxiously nor angrily, but confidently.

What we make is for sale. Who we are is not.

[The Chair, Liberal, Ahmed Hussen]

Thank you very much, Mr. Volpe, for your statement.

I now invite Goldy Hyder to deliver his remarks.

[Goldy Hyder, President and CEO, Business Council of Canada]

Good afternoon, Mr. Chair, Vice-Chairs and members of the committee, and thank you for the invitation to appear before you today.

To my dear colleagues Flavio and Beth, it is an honour to be here with you.

It is a privilege to be here to share the perspective of Canada's business community on one of the most consequential relationships for our country, which is our relationship with the United States of America.

I'm appearing today as president and CEO of the Business Council of Canada. Our members are the chief executives of Canada's largest companies, operating across virtually every sector and region of the country.

Let me begin with a simple proposition: Canada's relationship with the United States is too important to be defined solely by the disagreements of the moment.

For generations, Canadians and Americans have built one of the deepest economic, social and security partnerships in the world. Our economies are deeply integrated. Our supply chains cross the border many times before a product reaches a customer. Our energy systems are interconnected. Our workers, investors, entrepreneurs and communities depend on this relationship, and our countries share something even more fundamental—a continent, a neighbourhood and many common interests. That reality has not changed.

However, the environment in which we operate has changed profoundly. The United States is changing. The global economy is changing. Geopolitical competition is intensifying. Governments are placing greater emphasis on economic security, resilience and sovereignty. Businesses are reconsidering where they invest, where they source and where they build.

For Canada, this creates both a challenge and an opportunity. The challenge is that the uncertainty is in itself an economic cost. Businesses can manage tariffs. They can manage regulation. They can manage competition. What is much harder to manage is uncertainty about the rules under which they will be making billions of dollars of investment decisions for five to 10 to 20 years or more from now.

That is why the ongoing review and renewal of the Canada-United States-Mexico agreement is so important.

From the perspective of Canadian business, the objective should be clear: to preserve and strengthen the predictable rules-based economic relationship that has served all three countries well. A renewed agreement would provide something investors desperately need—confidence.

I would emphasize that this is not simply a Canadian interest. American businesses benefit enormously from integrated Canadian supply chains. Canadian companies are major investors in the United States and employ hundreds of thousands of Americans, and this relationship creates jobs and prosperity on both sides of the border. We should therefore approach the relationship not simply as a matter of managing bilateral friction but as an opportunity to demonstrate why North American economic integration remains a competitive advantage in a world of intense global competition.

At the same time, we must be clear-eyed. Canada cannot build its economic future on the assumption that the world will return to the way it was.

This brings me to what the Business Council calls the U.S.-plus approach. U.S.-plus does not mean less United States. It means a stronger Canada that can be an even better partner to the United States while developing deeper economic relationships with the rest of the world.

Our objective should not be to choose between the United States and the rest of the world. Our objective should be to have the capacity to succeed with both. That means making Canada a more attractive place to invest and a place where major projects get built, improving our transportation systems and our trade infrastructure, reducing the internal trade barriers and improving our labour mobility. It means making our tax and regulatory environment competitive with the jurisdictions with which we compete for capital, and it means using our extraordinary advantages of energy, critical minerals, agriculture, technology, finance and human talent to build products and companies that the rest of the world wants to buy.

I will leave the committee with three priorities.

First, protect and strengthen the North American relationship. We should work constructively towards a renewed CUSMA that provides long-term predictability and supports the competitiveness of our three countries.

Second, strengthen Canada at home. We need to make it even easier to invest, build, move goods, hire people and grow businesses here.

Third, expand Canada's options abroad. We should deepen our relationships with Europe, the Indo-Pacific and other trusted partners—not as an alternative to the United States but as an essential complement to our North American partnership.

The goal should be a Canada that is confident enough to have a strong relationship with the United States, capable enough to withstand uncertainty and ambitious enough to build opportunities around the world.

Thank you.

[The Chair, Liberal, Ahmed Hussen]

Thank you very much, Goldy, for your statement. I also want to thank you for joining us all the way from the United Kingdom. I know how late it is there. Thank you for taking the time to join us. We really appreciate it.

We will now proceed to questions from the floor, beginning with MP Majumdar.

You have six minutes.

[Shuv Majumdar, Conservative, Calgary Heritage, AB]

Thank you very much.

Mr. Volpe, thank you. Few Canadians have spent more of the last 18 months in this fight than you have.

In March of last year, you said the relief on vehicles and potash came from American industry reaching the Oval Office, not from Ottawa. Is that still your reading of where that relief came from?

[Flavio Volpe]

Yes. It was really important that our American counterparts, the ones who are responsible for profit and loss and employment in key sectors, agreed with our position. They agree with the common market. They got through to the people who were setting up these emergency tariffs, and they—

[The Chair, Liberal, Ahmed Hussen]

Mr. Volpe, please briefly wait for a second. We have to solve a technical issue with the volume of the communications. The members are saying they can't hear.

[Flavio Volpe]

Shall I try again?

[The Chair, Liberal, Ahmed Hussen]

Yes, please continue.

[Flavio Volpe]

I was saying that what was critically important was that our counterparts who have the same view on profit and loss and employment within this continent got through to the people who were putting emergency tariffs in place and convinced the White House to back off on a few things that were going to be really bad for American industry.

[Shuv Majumdar, Conservative, Calgary Heritage, AB]

You sit on the Prime Minister's own advisory committee. Can you name one sectoral tariff on steel, aluminum, autos or lumber that this government has lifted through its own negotiation?

[Flavio Volpe]

Are you talking about Canadian countertariffs, or are you saying that Canadians were able to get the Americans to back off?

[Shuv Majumdar, Conservative, Calgary Heritage, AB]

It's the second.

[Flavio Volpe]

On the balance, it's been tough. I will say that the industry that I represent—auto parts—was threatened with a 25% section 232 tariff last year. We managed to get an exemption for Canadian auto parts. There are still tariffs on cars, but the auto parts exemption kept the industry open.

[Shuv Majumdar, Conservative, Calgary Heritage, AB]

Thank you for that. It's 100% tariffs now, stacked, when you think about it.

Mr. Volpe, I'll stay with you for one more.

Washington declined to extend CUSMA on July 1, and the U.S. Trade Representative said Canada was behind Mexico in these talks. From where your members sit, is this government ahead of events or are they chasing them?

[Flavio Volpe]

That's really interesting phrasing.

I will say this: The government in Washington isn't concerned with the commitments it made to its trading partners. We've seen them go back on commitments they've made to other trading partners a week or two later. By definition, Canada is reacting to Washington, but so is the rest of the world.

I just came back from Mexico City, where I spoke at the INA conference and attended the North Capital Forum that Mr. Hyder and others were so good to organize. What we found on the ground in Mexico is that they're actually not, at least in our space, any further ahead or behind than Canada is in these negotiations.

[Shuv Majumdar, Conservative, Calgary Heritage, AB]

Mr. Hyder, you told the USTR last December that businesses invest when there is certainty and that the review must preserve it. I agree with every word of that.

Briefly, let me ask you some quick questions.

Did CUSMA receive its 16-year extension on July 1?

[Goldy Hyder]

No. That's because the Americans had indicated that they would be withdrawing in 10 years.

[Shuv Majumdar, Conservative, Calgary Heritage, AB]

Is there a date for formal Canada-U.S. negotiations today?

[Goldy Hyder]

I believe talks are informally happening, but there's no date to formally re-engage.

[Shuv Majumdar, Conservative, Calgary Heritage, AB]

Are steel, aluminum, autos and lumber still under sectoral tariffs?

[Goldy Hyder]

Yes.