International Trade Committee on Oct. 30th, 2025

[The Vice-Chair, Conservative, Adam Chambers]

I call this meeting to order.

Welcome to meeting number 10 of the Standing Committee on International Trade. Pursuant to Standing Order 108(2) and the motion adopted by the committee on Thursday, September 18, 2025, the committee is resuming its study of Canada and the forthcoming CUSMA review.

We have with us today, on our first panel, Mr. Krips from the Alberta Forest Products Association; Ms. Tognarelli and Mr. Winterhalt from Export Development Canada; and from the Manufacturiers et Exportateurs du Québec, Madame White.

Welcome to all of our witnesses here this afternoon. We will all have opening remarks. You'll have five minutes each to do those opening remarks. For those of you who are in the room and can see me or those of you who are online, when you have 30 seconds left, I will raise my orange folder in an effort not to interrupt but to let you know you are approaching the end of your five minutes.

Mr. Krips, I invite you to make an opening statement for the next five minutes.

[Jason Krips, President and Chief Executive Officer, Alberta Forest Products Association]

Thank you, Vice-Chair and committee members. I really appreciate the time this afternoon.

The Alberta Forest Products Association, or AFPA, represents 29 forestry companies in Alberta. AFPA members range from publicly listed companies to family businesses that have been passed through generations, and we represent everything from sawmilling to pulp and paper, wood pellets and everything in between.

We're proud to be a part of the Canadian forest industry, which stretches from coast to coast, an industry that creates 200,000 direct jobs and is one of the largest employers of indigenous people in this country.

One of the key requests as it relates to CUSMA and the CUSMA review is to ensure that the forest sector has a seat at the table with an aim to include forestry products in the final renegotiated agreement, or at least be treated as a priority with other key sectors such as steel, aluminum, auto, dairy and agriculture at the same time as any CUSMA renegotiations.

Outside of the trade dispute resolution process, which hasn't functioned all that well for softwood lumber, past iterations of NAFTA or CUSMA have largely excluded lumber. This means that we've been singled out for additional duties and quotas and these have hurt communities, contributed to mill closures and cost Canadians throughout the country their jobs.

Destabilized and stifled trade isn't just bad for Canadians. It's also bad for the Americans as well. It results in American consumers paying more. In fact, the average American already can't afford to buy their first home until the age of 38. Adding costs through trade barriers exacerbates that situation further, and here's the real irony: While Canadian mills take downtime and communities suffer, American mills are taking downtime alongside us as well. They're being hurt by U.S. consumers who don't have the confidence to build homes, tariffs driving up their prices and other countries retaliating on their exports.

We need an agreement that is durable and creates certainty on both sides of the border. The U.S. supplies about 70% of its own lumber but they need to import 30%, especially species like spruce, pine and fir, which we produce here in Canada and particularly in western Canada, that play a unique role in structural building applications. The Americans can either get this lumber from Canada, or they can pay more and import it from Europe.

I speak for the Alberta forest industry but the reality is that this affects jobs in every corner of the country. Forestry is one of the foundational and fundamental industries, representing communities from Newfoundland right across to British Columbia, from southern Quebec to northern Manitoba. In fact, 300 communities throughout the country are forestry-dependent. It's a business that does the right thing for the environment, and it's a business where we have three generations of a family all working at the same mill. It's a business that needs certainty and stability. Investments to maintain and upgrade mills regularly run north of $100 million and that isn't possible when you don't know where your product will go or under what terms you'll be selling your product.

In the current situation, we are paying 35.5% duties and an additional 10% under the section 232 national security investigation for timber, and it's leading to mills across the country curtailing production and sending employees home.

We certainly laud efforts to use more of our lumber here at home—that's very important—and to diversify our markets abroad, which is also very important. These are good steps and things that we need to be doing, but the reality is that about 50% of our lumber goes to the United States. We also send large volumes of wood panels, pulp, newsprint and other forestry products into the United States market. We cannot diversify our way out of this problem. We need to work out a solution with our American friends and customers, and that's why it's important that our industry has a seat at the table with respect to the Canada-U.S. trade negotiations, along with other key industries like steel, aluminum, auto, dairy and agriculture.

We ask that committee members advocate to help ensure we get that seat and that this issue remains a top priority for this government. Once negotiations start up, we ask that the Government of Canada ensure a new agreement contains enhanced dispute mechanism processes, including enforceable timelines for binational panel appointments.

Thank you very much. I look forward to your questions this afternoon.

[The Vice-Chair, Conservative, Adam Chambers]

Thank you, Mr. Krips.

Ms. Tognarelli and Mr. Winterhalt, you have five minutes.

[Todd Winterhalt, Senior Vice-President, International Markets and Head of Communications and Public Affairs, Export Development Canada]

Mr. Vice-Chair and committee members, it's a pleasure to be here today.

At the best of times, business and international trade are risky and rife with uncertainty. The uncertainty takes many forms: extreme weather, election outcomes, conflicts, disease and, of course, trade barriers.

One thing that helps us manage through these downturns and even maximize opportunities contained therein is the presence of strong and reliable partnerships. Export Development Canada is one part of Canada's international trade ecosystem—a system that helps build these strategic partnerships.

For people who are less familiar with Export Development Canada, or EDC, let me quickly provide an overview.

EDC is a crown corporation. Our mandate is to support and increase Canadian exports through a range of financial solutions that help reduce the risks for Canadian exporters and investors.

Together, these products and services first give Canadian companies the tools needed to reduce financial risks. They then provide the capital support needed to break into new markets and invest with confidence. Lastly, they help the companies grow internationally.

To provide some context, last year, these products and services helped to support almost 28,000 companies and to facilitate export, foreign investment and trade development activities totalling over $123 billion.

EDC is a counter-cyclical organization. We step to the fore in the most difficult moments. We operate on commercial terms, which helps to ensure that our work is complementary to the private sector. Consistent with this model, EDC is financially self-sustaining, does not provide grants or subsidies, and regularly returns dividends to the Government of Canada.

As all of us here know well, Canada is a trading nation. Our prosperity relies on a steady flow of goods into and out of the country. Together, imports and exports account for about 65% of this country's GDP. Exports, specifically, are about a third. This year, however, the country that was, for generations, our most reliable trading partner started moving in a different direction. There is currently little certainty around Canada's trading relationship with the United States and, at EDC, we are now starting to see the effects of that. Canadian exports contracted in August, pushing the trade deficit to the second-highest level on record.

We also see these feelings reflected in our biannual trade confidence index, with our mid-2025 release pegging the index at 65.7, which is down 3.3 points from the 2024 year-end survey. It also found that 40% of our respondents are experiencing a decline in their U.S. orders. Six months earlier, in our last survey, only 16% said the same thing.

Perhaps on a more encouraging note, the survey also found that exporters are now actively exploring new markets as a means of growing their customer base. Most of the respondents—72% in fact—said they plan to be in new markets within two years and are focusing on countries that have existing free trade agreements with Canada.

There is no doubt about how difficult it is for Canadian business owners to muster confidence when each day seems to bring a new challenge.

I want to be clear, though. At EDC, we remain very confident in Canada's exporting and partnering opportunities. We see this country at an inflection point, where Canada truly has what the world needs. Our natural resources and world-leading clean technologies have a key role to play in the energy transition. Our innovative high-tech ecosystem has the potential to lead the way as industries, economies and societies progress in their technological transformation. As one of the world's most agriculturally self-sufficient countries, Canada's agri-food supply chain can help pave the way globally.

To accomplish all of this, at EDC, we believe that Canada must shift from a predominantly continental trade system to a more global one. With still approximately 75% of Canadian goods exports headed to the United States, it's no surprise that the impacts of the tariffs have been felt so broadly across the economy. The proximity of the U.S. to Canada, our highly integrated supply chains, supportive infrastructure and a strong and long-shared history make it the perfect trading partner. For all of those reasons, we believe the U.S. will remain Canada's largest trading partner going forward.

For Canada to prosper and for our economy to grow, Canadian exports require an incremental strategy, one where we add to and diversify our markets—not replace the world's largest consumer nation. We need to position our companies to weather the challenges of the U.S. market through a presence in new ones.

Allow me to conclude with this. Diversification to the Indo-Pacific, Europe, Latin America and beyond is the key to unlocking a transformational opportunity for Canada, to help us move away from the economic dependencies of the past and toward a competitive, resilient and secure economy built on reliable trading relationships with markets across the globe.

Joanne and I look forward to offering more information and addressing your questions. Thank you so much for time and your interest today.

[The Vice-Chair, Conservative, Adam Chambers]

Thank you, Mr. Winterhalt.

Ms. White, you have the floor for five minutes.

[Julie White, President and Chief Executive Officer, Manufacturiers et Exportateurs du Québec]

Thank you, Mr. Chair.

Members of Parliament, I'm pleased to be here with you today.

First, I would like to thank you for giving us the opportunity to speak on behalf of Quebec manufacturers and exporters on an issue as important as the review of the Canada‑United States‑Mexico agreement, or CUSMA.

Manufacturiers et Exportateurs du Québec, or MEQ, is a business association dedicated to the growth of the manufacturing sector. It has a network of over 1,000 manufacturing companies of all sizes throughout Quebec. We're also part of Canadian Manufacturers and Exporters, the country's largest trade and industry association, which was founded in 1871.

First, keep in mind that the manufacturing sector is a pillar of the Quebec economy. It ranks first out of all the sectors in terms of its weight in the gross domestic product, or GDP. It employs over 500,000 Quebeckers, contributes to 12.3% of the GDP, accounts for 86.1% of our exports and includes more than 13,600 companies. In 2024, Quebec's manufacturing sector generated almost $220 billion in total sales. This makes the sector a cornerstone of our economy.

MEQ considers CUSMA a good agreement overall. However, the agreement is good when all partners comply with it. Our companies have been able to develop their exports and grow as a result of this agreement and previous free trade agreements.

We surveyed our members in recent weeks about their views on the CUSMA review. Almost all members surveyed, or 96% of respondents, want to see CUSMA renewed. In addition, 90% of the members support the integration of our economy with the American and Mexican economies. However, 75% of respondents want stricter measures for the countries that fail to comply with the agreement.

Obviously, the events in recent months involving the American administration have significantly disrupted the manufacturing sector. The ongoing tariff war must come to an end. This tariff war is damaging a number of our manufacturing subsectors that play a key role in the Quebec economy, such as wood, aluminum and steel. It's also creating a general sense of uncertainty for companies.

For the purposes of the review, our preferred approach is based on the following five principles.

First, we must preserve the spirit of CUSMA, in particular by avoiding permanent tariffs as much as possible.

Second, we must maintain the preferential access to the American market developed through the signed free trade agreements. The American market will always remain the main client for manufacturing companies given its geographic proximity and also its size and influence in the consumer market.

Third, we must continue to support a trilateral approach that includes the United States and Mexico. Over the past few decades, we've worked with these partners to develop a strong and integrated North American economy. Our companies have been built and expanded with all three markets in mind. We have companies with production facilities in the three countries. Any change to this approach would be detrimental.

Fourth, Quebec must have a voice at the negotiating table and in discussions. As in previous negotiations, we're calling for Quebec to take an official seat at the table, with the Quebec government appointing a chief negotiator. This person should have extensive knowledge of the Quebec economy and experience in negotiation. This person should be able to build a broad consensus in order to ensure legitimacy.

Fifth, we must encourage predictability and stability in trade relations. As I said earlier, we need to find common ground. Rules that change frequently and without notice harm companies, investment, innovation and the economy in general.

Thank you. I'm available to answer your questions.

[The Vice-Chair, Conservative, Adam Chambers]

Thank you very much, Ms. White.

We'll now move to our questioning rounds. The first round is six-minute questions.

Mr. McKenzie, you are up for the first round.

[David McKenzie, Conservative, Calgary Signal Hill, AB]

Thank you very much, Mr. Chair.

Thanks to all of our witnesses for their time and input today.

Mr. Krips, I think you touched on—or came close to—this issue concerning a forest manufacturing tax credit. Could you elaborate a little bit on what it is that your members would be seeking there and what response you've had from the government to date on that issue?

[Jason Krips]

Our sister association, FPAC, Forest Products Association of Canada, has been doing excellent advocacy to try to land a tax credit. My understanding is that those conversations have gone well. Certainly, our members would be interested in having that type of a tax credit to help support revitalizing some of their mills, increasingly refurbishing equipment and making them more operational.

[David McKenzie, Conservative, Calgary Signal Hill, AB]

That would be a credit for additional investment in the plant facility.

[Jason Krips]

That's my understanding.

[David McKenzie, Conservative, Calgary Signal Hill, AB]

Those are good nation-building projects, I think.

[Jason Krips]

Absolutely.

[David McKenzie, Conservative, Calgary Signal Hill, AB]

Thank you very much.

You've noted that Alberta-made lumber and wood panels facilitate the affordable construction of American homes. I'm curious. It must be that the American customers and the consumers of those forest products—and products generally—appreciate the value that Alberta forest products give to them.

Are they speaking out in the U.S. about the trade circumstances we find ourselves in?

[Jason Krips]

We have a real, natural ally in the National Association of Home Builders in the United States. They have been long-standing allies against the softwood lumber duties.

Just to step back.... Fifty per cent of the lumber that's produced in Alberta stays domestic. By “domestic”, I mean all of Canada. Out of the other 50%, about 96% to 97% goes to the United States. It is, by a large margin, our largest trading partner. The lumber is predominately used in home building, for sure, and we produce lumber made out of spruce, pine and fir, which are longer growing. It's more flexible, and the builders actually really enjoy working with it. It doesn't splinter when you use nails.

It's actually the housing market and the demand down there that very much appreciates, wants, demands and has a demand for our product. That's why you see that 70% and 30%. They can produce 70% of their needs, but the 30%, especially related to housing and refurbishment, is done with spruce, pine and fir.

Associations like the National Association of Home Builders have been long-standing supporters of ours. We continue to work with them closely to voice our view that it's a partnership approach and that it's not just spruce, pine and fir. It's also southern yellow pine used for decking and that.

In our mind, it's a symbiotic relationship between our different types of products.

[David McKenzie, Conservative, Calgary Signal Hill, AB]

Thank you very much.

Mr. Winterhalt, the information I have available to me is that Taiwan, the Philippines, Poland, Japan, South Korea, Germany, Latvia and Ukraine all want Canadian natural gas. Is EDC responding to these requests?

[Todd Winterhalt]

EDC remains a steadfast supporter of the Canadian oil and gas industry here domestically, and it continues to provide support across all of our product lines to Canadian producers here in Canada domestically, who have identified many of those markets as target markets.

[David McKenzie, Conservative, Calgary Signal Hill, AB]

I understand that EDC adopted a policy that it would not support any investment or development of traditional energy sources. Has that changed, or did I misunderstand that?

[Todd Winterhalt]

Following the Glasgow agreement at COP26, there was a decision taken by the Government of Canada to preclude additional investment in international oil and gas projects. That does not curtail our efforts to support domestic oil and gas companies, including their operations in Canada.

[David McKenzie, Conservative, Calgary Signal Hill, AB]

From my experience, I know that EDC is very active in markets around the world in terms of assessing risks, needs, opportunities, etc. That is key to your financing role. Would you be in a position to comment on what the demand is for Canadian liquefied—for shipping purposes—natural gas around the world?

[Todd Winterhalt]

We certainly have seen, I would say, an increasing interest in LNG. In Asia in particular over the last number of years, EDC has invested significantly in deepening our Indo-Pacific footprint—that's in the last three years—now having 12 offices in the region. We do hear of the interest across the region in Canadian energy and, I would say, writ large—so, traditional energy but also renewables, and energy and energy transition-type products.

[David McKenzie, Conservative, Calgary Signal Hill, AB]

From your perspective, there is certainly a business case for the export of liquefied natural gas.

[Todd Winterhalt]

The demand is clear, and I think we're seeing that take place in Europe as well, given recent crises there and a growing need for the European continent.

[David McKenzie, Conservative, Calgary Signal Hill, AB]

We're talking specifically about European nations, our allies and trading partners, having the opportunity to get away from Russian and Qatari supplies of natural gas. Is that right?

[Todd Winterhalt]

That's correct.