Madam Chair and committee members, thank you for this invitation to take part in your meeting on Canada-U.S. trade issues.
The Business Council of Canada is composed of 175 chief executives and entrepreneurs from Canada’s leading enterprises. Our member companies directly and 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 been a priority for our members. We played a critical role in supporting the development of the first free trade agreement and its expansion into NAFTA and into our new framework, the CUSMA.
Today Canada and the United States enjoy a strong, mutually beneficial trade and investment relationship. In 2022 we had a record year of exports. In the big picture, the future of bilateral trade looks bright, in large part due to the greater certainty provided by the CUSMA. Unfortunately, this certainty has not extended to the softwood lumber industry, nor to the various industries that rely on lumber inputs, such as home builders.
We believe the only workable long-term solution to provide certainty and stability for the industry would be a new softwood lumber agreement. We are disappointed that eight years after the expiration of the last softwood lumber agreement, there is no new agreement in place, nor are there active negotiations toward one. A new agreement would clearly be in Canada’s interest, but it would also be in the interest of American consumers.
We understand that there has been resistance by certain industry groups in the United States to negotiate a new deal, and as a result, this has not been a priority for the administration. However, we know that there are many supporters in the United States as well. Just last year, members of Congress called on the United States to return to the negotiating table. We were especially encouraged to see United States senators Menendez and Thune, a Democrat and a Republican respectively, call on the administration to negotiate a new deal to benefit industry and consumers, particularly to reduce home building costs and housing costs.
Following up on this initiative, the Business Council of Canada sent a letter to the government, calling on the government to work with congressional leaders as well as other supporters in the United States to build some renewed pressure toward a new deal. This is still possible. We encourage Canadian officials to intensify efforts with like-minded partners in the United States to make progress toward negotiations this year.
Securing a deal becomes more important as we approach the review and what we hope will be a smooth extension of the CUSMA in 2026. While there is still considerable support for the agreement across a range of stakeholders, we should not take this support for granted. To create the conditions for expansion, it should be a priority for Canada to reduce the number of irritants and disputes facing the trilateral trade relationship. Reaching a long-term solution for softwood lumber would certainly improve this discussion.
Another challenge in resolving this dispute has been the current state of the WTO appellate body. This concern extends well beyond softwood lumber, but this dispute demonstrates just how important this institution is for Canada. We were encouraged that at the 12th ministerial conference, the United States and other WTO members agreed to restore full functionality of the dispute settlement system by 2024. We urge Canada and its partners in the Ottawa Group to work closely with the United States this year to overcome long-standing concerns and restore this important system.
The recent expansion of buy America rules to include a broad range of construction materials further threatens to harm Canada-U.S. lumber trade. We reiterate the importance of Canada's securing a carve-in to proposed restrictions placed on government procurement.
In conclusion, we urge Canada to prioritize securing a softwood lumber agreement. 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.