Industry and Technology Committee on April 27th, 2026

[Michael Ma, Liberal, Markham—Unionville, ON]

Thank you, Mr. Chair.

Mr. Volpe, with your expertise, do you see the shift by the U.S. in trade policy as a temporary disruption or more of a long-term shift?

[Flavio Volpe]

It's a very good question. I think it's related to the man in the White House. At the USTR hearings on December 5, to which I was invited to give a deputation—the only Canadian industrial sector invited—most announcements showed that about 90% of the 149 witnesses, who were American, were very positive about the CUSMA for their businesses, and had showed an incremental benefit from when it was signed.

The President has decided that he wants to pick on Canada and Mexico. He started his second presidency with it. He is not speaking the same language that his industry is.

[Michael Ma, Liberal, Markham—Unionville, ON]

If there is a long-term shift, how do we build a more resilient domestic auto supply chain that will allow Canada to better adapt to this rupture in our trade relationship?

[Flavio Volpe]

What's difficult is that you can't change the geography and the return expectation. It's a 6% or 7% business. What's not difficult is convincing the Americans that if you stopped parts from Canada and Mexico, you would shut the industry down. I warned about it. Linda Hasenfratz warned about it. A few others joined us after. Last year, in May, we got a very quiet exemption from Commerce and CBP on parts.

I think what the question really speaks to is this: What if we don't get that market back for cars? That's a really tough prospect for our suppliers. One of the things I said today at the Canada-U.S. relations committee and have also been saying very publicly is that there is an opportunity to diversify locally, and that's our defence spend, but we need to get more clarity on earlier defence ramp-up, so that we're able to say to suppliers, look, we're going to build a bunch of stuff that rolls and a bunch of stuff that floats. Instead of that being in the 2030s, it has to be in the late 2020s, so that we have local diversification.

[Michael Ma, Liberal, Markham—Unionville, ON]

My next question is for Mr. Rioux.

How would you describe the role that interprovincial economic integration plays in shielding Quebec and Canadian firms from the sudden volatility of U.S. tariffs?

[Hubert Rioux]

Thank you for the question.

It is clear to us on our side, and this is our long-standing position, that interprovincial trade is one of the alternatives for diversifying our trade.

That said, the Canadian market is not as big as the American one. That's part of the leverage we can apply, but it won't solve the problem in the short term for the processors and manufacturers who are affected by the tariffs. It is clear that the priority must be to end the tariffs through negotiations with Washington. There's no alternative to that.

[Michael Ma, Liberal, Markham—Unionville, ON]

How can the federal government work with Quebec industries to advance a strong team Canada approach that puts our collective interests first in trade negotiations?

[Mathieu Lavigne]

I think the first thing we would ask of the governments of Canada and Quebec would be, as you said, to take a team approach, to work together, but also to go down to the United States to meet with our partners. It's not just the White House; it's also the senators, House representatives, governors and mayors. They are often, in fact, allies because they see the economic impact of Canadian and Quebec companies back home, but also on companies that have subsidiaries on both sides of the border. As we're also seeing now in a number of surveys, we have allies to work with on the other side of the border.

[Michael Ma, Liberal, Markham—Unionville, ON]

Are you suggesting, then, that we cannot rush into this and that it takes time to speak to all of these various stakeholders?

[Mathieu Lavigne]

It's clear that it is the number one priority of Quebec businesses. Therefore, we would like this to be resolved as quickly as possible. As we said earlier, it's all well and good to work on diversification projects or things other than tariffs, but that's the short-term priority of businesses in Quebec. I think the same is true in many other regions in Canada.

We want this to be resolved as quickly as possible. That's the priority.

[Michael Ma, Liberal, Markham—Unionville, ON]

Thank you.

[The Chair, Liberal, Ben Carr]

Thank you, Mr. Ma.

As I said at the outset, we are removing the last two speakers.

Mr. Ste‑Marie, you have the floor for one minute and you are the last speaker.

[Gabriel Ste-Marie, Bloc, Joliette—Manawan, QC]

I would like to take this opportunity to thank the four witnesses once again. We would have liked to ask more questions.

Mr. Lavigne and Mr. Rioux, could you explain to us again how the latest order affects businesses through the drawback program and what you suggest we do to help businesses in this regard?

[Hubert Rioux]

There are two things. The drawback program is for export processors, who can be reimbursed for Canadian countertariffs when they export a finished product, such as an input that they imported from the United States. In our opinion, this program should be publicized more because many processors, particularly SMEs, are relatively unaware of it. It's also hard to access, in the sense that they have to provide a lot of documentation and the response times to requests from businesses can be long. That's number one.

The second program, the horizontal remission of retaliatory tariffs on American steel, was abolished last January. We are asking that these “horizontal”, meaning automatic, remissions be reinstated for all processors and manufacturers that use American steel. Right now, we're shooting ourselves in the foot with this measure.

[Gabriel Ste-Marie, Bloc, Joliette—Manawan, QC]

Thank you.

[The Chair, Liberal, Ben Carr]

Great.

Thank you, Mr. Ste‑Marie.

Thank you to the witnesses, Mr. Lavigne, Mr. Rioux, Mr. Aalbers and Mr. Volpe, for being here with us.

Thank you very much for availing yourselves to the committee on very short notice. We know how much pressure there is on your time right now. We appreciate the insight and the guidance.

Colleagues, what I'm going to do is suspend for about three minutes to afford everyone an opportunity to prepare for the next discussion. I had hoped initially, as I raised at the outset of the meeting, to have a couple of moments to talk about future planning. I'm just simply going to move that to the end of Thursday's meeting. You might want to let your teams know in advance now that I'm going to be adding an extra 30 minutes to Thursday's meeting for committee business. It might not have to be that long, but we need to figure out what the next week or two look like, particularly given that we're on the verge of two consecutive break weeks.

Having said that, I'm going to suspend momentarily. I'm starting in a crisp three minutes.

We're suspended.

[The Chair, Liberal, Ben Carr]

Colleagues, in the spirit of the collaboration that we have established quite well since the start of this session, we will honour the commitment to return to debate on the motion presented by Madam Dancho.

I understand that this should now be in the hands of members in both official languages. There's an opportunity for members to speak. I did not have a speaking list.

I have Mr. Bardeesy first and then Ms. Borrelli.

Just keep your hands up. You know how it goes. A lot of people want to speak.

Mr. Bardeesy, why don't you start while I take note of whose hands are up? I already have Borrelli, Lewis, Bains, Dancho, Ste-Marie, Groleau, Falk and O'Rourke.

The floor is yours, Mr. Bardeesy, on the motion.

[Karim Bardeesy, Liberal, Taiaiako'n—Parkdale—High Park, ON]

Thank you, Chair.

I appreciate the chance to speak to this motion. This committee, as with other emergency meetings, has done good work. We haven't actually concluded the work of the committee. We had a shortened period of time with our second round of witnesses just now. I think it was the intent, at some point in this meeting, to get to some of the particulars around how we were going to do report writing, because I know the motion that we agreed to on this side, the original motion that struck this emergency set of meetings, was to report to the House. I think it's important that we look to do that work.

This motion seems to come in an odd way at an odd time, given that we were towards the end of doing the work of hearing from witnesses and then getting to the kind of report writing that I believe is necessary to do the work of reporting to the House.

I also argue that the motion here is a very partial, very incomplete and very misdirected approach that I don't think captures the spirit or the content of what we heard in this set of hearings and that we would want to, I think, continue to work through, including written submissions. I'll give some examples.

Even in our hearings today, we heard about the need to diversify to markets beyond the United States. We heard that in all three meetings in the study. I know that we're getting submissions that I think will fill out our understanding of the diversification that we're looking to achieve, diversification that, incidentally, is already starting to happen broadly for Canadian exporters. We know that Canadian exports to Europe are up 31% year over year. We know that foreign direct investment is at an 18-year high, so we know that diversification is a key aspect of this issue.

We heard from most witnesses, even as they were sharing their very frank and very significant challenges with the section 232 tariffs of April 2, that the need for diversification and support for that diversification were something that was requested and something that our government is already working on through the expansion of trade corridors and through the opening up of new trade agreements and new trade opportunities. We don't see that reflected in the motion.

We heard today and from other witnesses the very specific and real desire for other forms of relief, work-sharing arrangements and various forms of subsidy and tariff relief. Again, these are things that this government has been doing with the regional tariff relief initiative and through the RDAs.

We have seen a variety of supports, including through the workforce alliances and a number of supports that our government has proposed. I believe this study was filling out our understanding of the very specific needs.

Mr. Volpe, in his testimony today, referred to the age and profile of some of the mould-makers and manufacturers who are being captured in this April 2 initiative by the administration to the south, which we continue to believe is illegal and unjustified. We have been speaking quite clearly and loudly on that, yet the motion makes no reference to the calls at this committee, including today, for that form of relief.

The motion makes no mention of the defence sector. We've heard in a variety of places that the pivot towards defence investment, something we foreshadowed with our defence industrial strategy study, significantly informed the release through the testimony and through the briefings that happened while our study was taking place. I think it significantly informed the government's defence industrial strategy policy document that came out. We heard multiple times in these three sessions and other sessions, including during our productivity study, that defence opportunities are being created, including by meeting our two per cent NATO commitment that we've already met this year. We are reaching towards five per cent.

We know that there's a lot of excitement in some of the various sectors that were touched by this study and in some of the various witnesses we heard from in the last three sessions—there's an appetite to be a part of that defence diversification. Again, that's not something that happens overnight but something that we know from the testimony and from the other forms of supports that are available is going to be part of the response more broadly to this effort, yet the motion does not touch on this.

I wrote down a quote from Mr. Aalbers earlier today, who said, in response to a question by Mr. Ma or Ms. O'Rourke about tariff relief and support for workers, “I think that would be an assistance.” That is a very important testimony. It's very important that we have relevant, useful responses to this committee, which we can then take to the government.

We also see in this motion a desire to rush into an agreement—I'll just quote it—“that ends these tariffs, restores stability, and protects Canadian jobs and the long-term competitiveness of Canada's industrial base”. The actions we're taking are all about restoring stability and protecting Canadian jobs and the long-term competitiveness of Canada's industrial base. We heard from the testimony today that the impacts of these tariffs are being felt not just in Canada but also in the United States. We heard that these are counterproductive and harming the very U.S. industries the U.S. administration claims to be trying to reshore or repatriate investment towards and protect.

We had some very useful testimony that can and should be part of not only our advocacy, but also the advocacy by American business interests, which we know are unified in their opposition to this. We heard testimony today about the loss of 100,000 manufacturing jobs, yet the motion chooses to bypass all of that and seeks to have us rush into a deal that would not be in our interest.

I know that the motion calls on the Prime Minister to act. The good news is that he has been very engaged, including in the House of Commons, on these issues. He was very engaged just recently in a CBC interview, in which he said the following. I want to read this into the record, because it is from a CBC interview today:

A lot of countries rushed into deals with the U.S. They weren't really worth the paper they were written on.

In my riding, I have heard since March and April 2025 that Canadians made a choice for this government, this party and this Prime Minister because they trusted him to have our best interests in mind and to get the best possible deal for Canada. The Prime Minister is very perceptive when he observes that a lot of countries rushed into deals with the U.S. that “weren't really worth the paper they were written on.” What does he mean by that? It means they embedded—

[The Chair, Liberal, Ben Carr]

Mr. Falk has a point of order.

[Ted Falk, Conservative, Provencher, MB]

Just to correct the record a bit, Canadians never gave the Prime Minister a majority mandate.

[The Chair, Liberal, Ben Carr]

Mr. Falk, I'm going to—

[Ted Falk, Conservative, Provencher, MB]

They actually gave him a minority mandate, and a majority was stolen—

[The Chair, Liberal, Ben Carr]

—take the floor back because we can't....

Mr. Falk, I don't want to give a headache to our interpreters. You're an experienced member, sir, and you know that correcting the record is not a point of order that I can honour.

I am going to turn the floor—

[Ted Falk, Conservative, Provencher, MB]

I thought it was a procedural thing.

[The Chair, Liberal, Ben Carr]

No, sir, unfortunately it's not.

I'm going to turn the floor back to Mr. Bardeesy.