Madam Chair and committee members, thank you for the invitation to participate today in your meeting on the Canada-U.S. relationship.
The Business Council of Canada is composed of 170 chief executives and entrepreneurs of Canada's leading enterprises. Our members directly or indirectly support more than six million jobs across the country and hundreds of thousands of small businesses.
Since our establishment more than four decades ago, the Canada-U.S. partnership has always been a top priority for our members. We played a critical role in supporting the development of the first trade agreement in 1987 and its expansion to include Mexico in NAFTA, as well as in our new framework, CUSMA.
Canada is a trading nation. Our prosperity and living standards depend on it. Sixty per cent of our GDP is tied directly to trade. The bulk of this trade is with the United States. As of 2020, it accounted for 73% of Canada's merchandise exports and 53% of our services exports. Two million Canadian jobs are related to exports to the United States.
This relationship is mutually beneficial. Nearly nine million jobs in the United States depend on cross-border trade and investment with Canada, and we are the largest or among the largest export customers for most states. From financial institutions and auto parts manufacturers to energy, aerospace and high-tech industries, our members have deep connections to the U.S., creating jobs and benefiting communities on both sides of the border.
The long-standing Canada-U.S. economic partnership has been tested in recent years and is in jeopardy of further deterioration if we do not take steps to strengthen it. We believe Canada needs a new strategy to do that.
Today I'm going to speak about three ideas that we believe can advance our relationship with the United States.
First, with respect to our relationship with the Biden administration, and as we have heard from Ambassador Cohen, we have a useful tool to enhance bilateral ties with the road map for a renewed U.S.-Canada partnership. This document has considerable breadth, and we have already made progress in certain areas. However, as the federal government thinks about its international and domestic policies going forward, including in the upcoming budget, it should consider what actions we can take to make progress on this road map and to accomplish the objectives our countries share. These include efforts to enhance supply chain resiliency and improve North American competitiveness. There is also considerable scope for collaboration to combat climate change and facilitate energy transition, including by enhancing the cross-border clean electricity grid, expanding production of battery electric vehicles, and stimulating the development of low-carbon opportunities such as critical minerals, carbon capture, hydrogen, and small modular reactors.
Second, Canada is fortunate to have CUSMA—a modern, progressive, and enforceable framework for trade. We cannot take this agreement for granted. We need to ensure that there's continued support for the agreement through implementation and by proactively communicating its benefits and presenting it as a foundation for regional competitiveness. Canada must work closely with our American and Mexican allies to promote this shared priority.
Third, we need a new, permanent team Canada to address the challenges of today and in the future. This team should leverage people-to-people ties, both in Washington and at the state level, to constantly communicate the shared benefits of Canada-U.S. trade and investment, as well as to ensure that government, business, labour, and other stakeholders are working toward shared objectives. This requires being proactive rather than waiting for the next trade irritant to arise. The team must develop a plan to advance Canada's interests and be ready to act quickly in a coordinated fashion.
Canada faces various challenges—some new and some old. While not everything is linked to a shift in trade policy, we should all focus on what we as a country can do to change the direction and prospects of this critical relationship. The Business Council of Canada and its members stand ready to support efforts to build a more stable and prosperous Canada-U.S. relationship and a competitive North America.
Thank you for this opportunity. I look forward to answering questions.