International Trade Committee on Oct. 30th, 2025

[Simon-Pierre Savard-Tremblay, Bloc, Saint-Hyacinthe—Bagot—Acton, QC]

You spoke about the grandfather clause.

Are you proposing any other measures?

[Julie White]

Public sector procurement remains a significant issue for our members. They need liquidity and predictability. The companies want access to contracts first and foremost. They aren't necessarily asking only for subsidies.

Another issue is program flexibility. There are good and well‑designed programs, particularly programs that invest in innovation. That's great. However, some companies are currently facing a critical situation. They urgently need liquidity support. I'm thinking in particular of the kitchen and bathroom cabinet industry. Companies that manufacture their products in Quebec or in other parts of Canada are affected by the 25% tariffs. These tariffs will increase to 50% in January.

However, they export most of their products. If they don't receive support, they won't make it through until the end of the Canada‑United States‑Mexico agreement discussions. The government must show flexibility in order to pump liquidity into these companies at a certain point and under specific conditions.

This matters to us. We can see on the ground that some companies are currently at risk.

[Simon-Pierre Savard-Tremblay, Bloc, Saint-Hyacinthe—Bagot—Acton, QC]

Do I still have time left, Mr. Chair?

[Adam Chambers, Conservative, Simcoe North, ON]

You have 25 seconds left.

[Simon-Pierre Savard-Tremblay, Bloc, Saint-Hyacinthe—Bagot—Acton, QC]

Thank you, Ms. White. We'll come back to this topic in the next round of questions.

[Julie White]

Thank you.

[The Vice-Chair, Conservative, Adam Chambers]

Thank you very much.

We'll move to our second round.

We have Mr. Viersen for five minutes.

Welcome to the committee.

[Arnold Viersen, Conservative, Peace River—Westlock, AB]

Thank you, Mr. Chair.

Thank you to the witnesses for being here.

Mr. Krips, could you explain to us what the interaction is with Mexico and softwood lumber?

[Jason Krips]

My understanding is that it's not very much. It's predominantly a Canada-U.S. dispute.

[Arnold Viersen, Conservative, Peace River—Westlock, AB]

Ms. White talked about maintaining the “tri-ness” of the agreement. Is that an important thing? It doesn't sound like it would be an important thing from your perspective.

[Jason Krips]

From an industry perspective, we want to make sure that the governments have whatever tools they can at their disposal to ensure an appropriate settlement renegotiation mechanism.

If the government and the officials determine that a trilateral agreement is better to get the best deal for Canada, then it would be for us to say to the government officials, “Use whatever tools and means you think appropriate to get the best deal for Canada.” Whether that's bilateral or trilateral, they'll have the inner workings of what will need to be to actually understand whether it'll get us the best deal possible.

[Arnold Viersen, Conservative, Peace River—Westlock, AB]

Tolko just informed us that they have laid off one shift already. Across B.C., mills have been shutting down all over the place. This is affecting us quickly.

What is the urgency for the government to get a deal on this?

[Jason Krips]

The urgency is to at least try to get some stability so the purchasers of our product, whether it's lumber or pulp.... We haven't even talked about the derivatives that are an important part of the whole value chain. We need stability in the North American market so that there's a recognition for investment based on the agreement, based on ensuring that we have a stable economic outlook. That would be the urgency.

There have definitely been closures in British Columbia, and we're starting to see some downturn and curtailment in Alberta. I know Ontario has experienced the same thing, as well as Quebec. The urgency is from an employee or worker standpoint. The sooner we can get a deal, the sooner these workers can either get back to work or re-engage with their employers.

[Arnold Viersen, Conservative, Peace River—Westlock, AB]

Could you explain for the committee how the global tariff conversation is affecting pulp producers in northern Alberta?

[Jason Krips]

The pulp producers, in particular, have been struck by the dispute between the United States and China. In Alberta, about 80% of pulp is exported outside Canada. Out of that 80%, about 50% is U.S.-based. The other 50% is for Asia, and most of that is for China. There has been an indirect impact on the pulp sector thanks to the U.S.-China tariffs. These have caused an absolute reduction in pulp demand in China. As a result, on the pulp side in Alberta, we had three mills take some downturns over the summer months. That's not directly linked to the softwood lumber dispute. It's more directly linked to the U.S.-China tariff dispute going on.

This showcases how, if you take down the pulp mill, you put the sawmill at risk. The sawmill sells its chips to the pulp mill for the pulp to be made, and vice versa. If a sawmill goes down, the pulp mill can't get the chips—its derivatives—to make the pulp. It's a very symbiotic relationship in our sector. Outside softwood lumber, there are some impacts on the trade side for companies here in the country.

[Arnold Viersen, Conservative, Peace River—Westlock, AB]

I think we need to clarify this fact a bit. It's not directly tariffs that are the problem. It's because there is less trade happening between the United States and China. There is no demand for our product in China. There are no tariffs being charged on our pulp products.

[Jason Krips]

There aren't on our products, but the tariff situation between the U.S. and China has reduced the demand for products coming out of China. This has, in turn, reduced the demand for pulp going into China.

[Arnold Viersen, Conservative, Peace River—Westlock, AB]

I'll throw it over to Export Development Canada for 30 seconds.

How important is it for us to maintain the “tri” part of the CUSMA agreement among Mexico, Canada and the U.S, rather than having a deal with just the United States and a deal with just Mexico?

[Joanne Tognarelli, Vice-President, Global Business Development, Export Development Canada]

I think it's important to recognize that Mexico is also a key trading partner for Canada.

As well, there are many Canadian exporters looking to diversify their exports to—

[Arnold Viersen, Conservative, Peace River—Westlock, AB]

Would there be a problem if we had separate deals with Mexico and the United States? Some people are talking about that. Is this realistic?

[The Vice-Chair, Conservative, Adam Chambers]

You're going to have to do this with a very quick answer, please.

[Joanne Tognarelli]

A trade agreement with both parties is important. As Mr. Krips mentioned, that which gets us most effectively to trilateral trade—

[The Vice-Chair, Conservative, Adam Chambers]

Thank you very much.

Mr. Lavoie, go ahead for five minutes.

[Steeve Lavoie, Liberal, Beauport—Limoilou, QC]

Thank you, Mr. Chair.

I'm very pleased to be here with you by video conference today.

Good afternoon to all the witnesses. I'd like to thank them for accepting the invitation to appear before us.

For the information of the committee, I would like to say that Ms. White and I know each other. We worked together when I was president of the Chamber of Commerce in a previous life. I'm very happy to see her again today.

My first question is for you, Ms. White.

You said in your presentation that the tariff war must come to an end. My initial reaction was that we would like that too. You also talked about doing business in the United States, the trilateral approach, predictability and stability.

As you know, “predictability” was the word I used most often when I was president of the Chamber of Commerce. My colleagues, who have listened to me over the past few weeks, can see where I'm going with this. Other witnesses have told us that they have never seen a situation like this in 40 or 50 years of negotiating.

Considering that we are living in a world of unpredictability for perhaps the next five to 10 years, how can the government help manufacturing companies cope and thrive in this new world?

It's important to keep in mind that predictability won't be there, because if we wait for it, we risk missing the boat.

With this new lens of unpredictability, how can we help you?

What do manufacturers need to continue to move forward in this new reality?

[Julie White]

Thank you for the question.

We are aware that negotiations with the U.S. administration aren't easy at present. We see it, and we understand it. However, the reason we're repeating ourselves is that some sectors have very high tariffs. A 50% tariff rate is significant. We have to be able to take the pressure off these companies.

As you said, we are obviously in a world of uncertainty. I often think that we're on a roller coaster and that the ride will never stop. That's our current situation.

To support manufacturing companies, the government must first look at what it is able to control in its business environment.

I talked about temporary foreign workers earlier. I know that the situation isn't the same in all Canadian provinces, but we're in a unique situation in Quebec because of our permanent immigration system. It's something that needs to be looked at.

We also need to look at public contracts and make sure that we prioritize manufacturing companies that manufacture in Canada, not those that only have a commercial establishment. Guidelines have been announced. So we look forward to seeing the result on that front.

Beyond these important measures, we need to look at the financial issue. Struggling companies are working with EDC or the Business Development Bank of Canada, or BDC, to explore financing options. That's very good, we have to do it and we have to keep working on it.

That said, some companies are having cash flow problems, so we have to be able to put flexible programs in place. I talked about it briefly earlier. For example, Canada Economic Development for Quebec Regions announced the regional tariff response initiative, or RTRI. This initiative goes a bit in that direction for projects of a certain size. It has a liquidity component and a loan component.

So it's important to be able to adapt the programs. Obviously, it isn't necessary to do that for everyone. It's not a matter of being an open bar; it's a matter of targeting the businesses and subsectors that are the most affected by the tariffs. The goal is to be responsible with government money. Then you have to look at those options.

In addition, we obviously have to continue making efforts to negotiate new markets, both within and outside Canada.

That said, EDC knows better than I do that it takes time to develop a new market. Developing a new trading partnership in a new country is complex. These solutions will therefore be put in place in the longer term.

When we talk about significant investments in defence, that's good news and very important for our Quebec manufacturing companies, but it's not going to happen tomorrow morning.

We have to be able to build bridges and ensure that our businesses will always be there, that they will be strong and able to win these contracts when the government is ready to propose them.