Thank you, Chair, and thank you, committee members, for having me here today on behalf of the Canadian Manufacturers and Exporters.
Since 1871, CME has been helping manufacturers grow and improve the well-being of their workers and the communities in which they operate. We are pleased to participate in your study on the 2026 review of the Canada-United States-Mexico Agreement.
Unlike Canada's other trade relationships, which are primarily about competing for market share, our partnership with the U.S. and Mexico is about working together to compete with the rest of the world. We talk about Canada and U.S. trade, but that trade is really us making things together. Members of this committee will know better than most that the North American manufacturing bloc is world class in the quality and the cost of the things that it makes.
Building on NAFTA, CUSMA has succeeded in providing a solid foundation for North American trade by strengthening our regional economic ties while modernizing the provisions that govern them. While Canadian manufacturers consider CUSMA a success, Canada has not yet realized the full potential of the agreement in the first four years. There are under-utilized features, such as the competitiveness committee and the good regulatory practices committee, that have the potential to help propel Canadian and North American manufacturing even further forward.
For Canada's industrial economy, deeper North American economic integration is not only desirable but a necessity to compete at a time when the global economic and security environment is shifting beneath our feet. There are specific trade irritants, as there always have been and there always will be, that Canada must and should continue to try to address, both through the agreement itself and through sustained and serious bilateral and trilateral engagement with U.S. and Mexican decision-makers.
The ever-present buy American provisions that accompany U.S. federal investments stand out. Just earlier this week, I was speaking with a small manufacturer of large industrial mixing tanks. They do all of their manufacturing in Canada, with two-thirds of their sales into the U.S., which includes government procurement for municipal water treatment systems. They estimate that, because of the most recent “Build America, Buy America” provisions, they've lost approximately 300,000 to 400,000 dollars' worth of business, and they expect that trend to continue.
Unjustified tariffs on softwood lumber products, automobile rules of origin, Line 5 and Keystone pipeline issues, Mexican energy policies and even the ban on GMO corn have all come up and lingered since CUSMA came into force.
We also know that China's neo-mercantilist approach to international trade in the North American market will, as Catherine just alluded to, loom large in this review.
CME is supportive of efforts to improve Canada's trade remedy and import monitoring systems to defend from unfair practices, and we recognize that Canada is going to have to confront the rules-of-origin issues that have strong bipartisan support in Washington.
In addition to these, Canada has its own domestic issues that its CUSMA partners may describe as irritants, which we don't think can be avoided in the context of the upcoming review. One issue that we hear about most commonly from our CUSMA partners and manufacturers, specifically in the United States, is the increase in labour-related supply chain disruptions in our country. That includes, of course, last year's B.C. ports strike and the St. Lawrence Seaway strike, along with the threat this year of a stoppage at the port of Montreal, as well as a potential Canada-wide rail stoppage.
Transportation is the connective tissue that holds the North American trading relationship together. CME recommends that Canada do something to show it is serious about preventing these disruptions. In addition to the immediate direct harm that they impose on Canadian manufacturers, workers and their families, these disruptions undermine North American supply chains and the reputation of Canadian manufacturers with their cross-border partners and customers. CME was disappointed earlier this week that the House of Commons passed Bill C-58, which is legislation that will make this problem worse.
As we approach the 2026 review, Canada will also be faced with ongoing questions regarding its investments in national defence. As we saw from members of the U.S. Senate last week, we should not be surprised if decision-makers in the U.S. do not bifurcate their consideration of CUSMA and other major bilateral irritants, including Canada fulfilling its NATO commitments.
U.S. trade considerations are increasingly being driven by economic, national and supply chain security considerations and this trend will continue no matter who is in the White House. Notwithstanding these challenges, Canadian manufacturers are fortunate to be the participants in and beneficiaries of a regional economic relationship that is envied around the world.
As Canada navigates the next several months in the lead-up to the review, Canadian manufacturers will continue to work closely with governments, our colleagues at the U.S. National Association of Manufacturers and the Confederation of Industrial Chambers of Mexico to offer our support to preserve and promote a trade agreement that is, by and large, working well.
As part of those efforts, in November of this year, just a couple of weeks after the U.S. presidential election, CME will be hosting manufacturing leaders and senior decision-makers from across Canada, the U.S. and Mexico, just a few blocks from here in Ottawa, at a North American manufacturing summit. This will provide an important inflection point for our sector to take stock of the agreement and the political forces influencing it, and to reaffirm our joint commitment to continue to build the manufacturing ties between our countries.
Thank you, and I look forward to your questions.
