International Trade Committee on Oct. 30th, 2025

[The Vice-Chair, Conservative, Adam Chambers]

You're right on time. Thank you very much, Mr. Verheul.

Mr. Wiens and Mr. Gobeil, you have five minutes.

[David Wiens, President, Dairy Farmers of Canada]

Thank you, Mr. Vice-Chair and committee members. I'm pleased to be here to present to you today.

My name is David Wiens, and I'm a dairy farmer from Grunthal, Manitoba. I also serve as president of Dairy Farmers of Canada. I'm joined today by Daniel Gobeil, who is also a dairy farmer, serves as the vice-president of Dairy Farmers of Canada and is also president of Les Producteurs de lait du Québec.

On behalf of our members and over 9,000 dairy farmers from coast to coast, I am pleased to be here with you today to share our perspectives on the upcoming review of CUSMA. Ninety-nine per cent of Canadian farms are family-owned and the average farm size in Canada is 105 cows, yet we support over 270,000 jobs and contribute $28 billion to our GDP.

I'd like to say how much we appreciate the commitments made by the Prime Minister and leaders of all parties to keep supply management off the table in any future trade discussions. Still, we remain very concerned about the U.S. administration's continued reference to Canadian dairy. We want to ensure that all parliamentarians understand that keeping supply management off the table in any future trade discussions means no concessions of any kind.

This extends beyond market access, including Canada's right to a tariff rate allocation, which has already been ruled upon. We want to ensure that we will be able to continue on, because the panel's decision was legally binding, so it shouldn't even be up for discussion. DFC estimates that the combined impact of the market access granted under CUSMA and other Canadian trade agreements, when combined with our WTO commitments, amounts to approximately 18% of Canada's domestic dairy production.

In addition to additional market access, the Canadian government had surrendered some of its sovereignty by giving the U.S. the right to be consulted on changes to the Canadian dairy system. It also conceded a threshold on the worldwide export of certain Canadian dairy products, like skim milk powder, milk protein concentrate and infant formula. This unprecedented concession applies only to Canada. Each time concessions are granted, they negatively impact our economic contribution, stifle growth and investment, and hurt the communities and farm families who depend on our sector for their livelihoods.

With this, I pass it over to Mr. Gobeil for concluding comments.

[Daniel Gobeil, Vice-President, Dairy Farmers of Canada]

Thank you, Mr. Wiens.

Good afternoon, Mr. Chair and members of the committee.

Thank you for having us today.

Although Mr. Wiens introduced me earlier, I would like to add that, with my nephews and children, I operate a dairy farm with a view of the bay.

Canada must adopt a “do no harm” approach in the next review, making it clear that the process is intended to assess and ensure the proper functioning of the agreement, not to reopen it to negotiate new provisions.

While the current agreement presents challenges for dairy farmers and offers few benefits, it provides predictability and contributes to the economy as a whole. That stability must be preserved, which is why it is important to have a review to ensure that the agreement works well.

As Mr. Wiens pointed out, the current CUSMA provides significant duty-free access for U.S. dairy products. Tariffs only apply if the U.S. exceeds the threshold that has already been negotiated.

Currently, the United States exports about 2.5 times more dairy products than Canada exports to the United States. Of course, 50% of dairy products imported by Canada come from the United States. Obviously, we're talking about really significant quantities, 100,000 tonnes annually. This increased reliance on dairy imports means that our food supply becomes more vulnerable to global problems beyond our control. I'm thinking in particular of extreme economic ups and downs, natural disasters, epidemics or conflicts involving governments.

In conclusion, I think the Canadian economy must be preserved in order to protect jobs and rural communities, while protecting food security and food sovereignty. Canada must ensure that no further concessions are granted in the next CUSMA review.

We are now available to answer your questions.

[The Vice-Chair, Conservative, Adam Chambers]

Thank you very much.

We will now move to Mr. Caron.

You have the floor for five minutes.

[Martin Caron, General President, Union des producteurs agricoles]

Thank you, Mr. Chair.

Thank you for having us here today.

With me is David Tougas, an agro-economist at the Union des producteurs agricoles.

I am the general president of the Union des producteurs agricoles, or UPA. I am also a dairy farmer and I farm field crops in Louiseville, Quebec.

The UPA represents all 42,000 agricultural producers operating more than 29,000 farms in all regions of Quebec. We therefore represent all production sectors active in local, national and international markets.

CUSMA is a critical agreement for Canada's agri-food sector. From the time it was signed in 2020, agri-food exports to the United States have increased from $35 billion to nearly $58 billion Canadian. The balance of trade went up 177% over the same period. Despite current tariff tensions with the United States, CUSMA has spared our agri-food sector from most tariffs, which confirms the strategic role it plays for the Canadian economy.

The UPA urges the Canadian government to do everything in its power to keep the agreement in its current form. Supply chains are deeply integrated across all three countries, and a small bilateral treaty approach would be ineffective. That approach would also be confusing for businesses.

A comprehensive agreement with the United States and Mexico remains essential to preserve the fluidity of trade and the competitiveness of North American businesses. It remains relevant, as demonstrated by multilateral initiatives like the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, or CPTPP, the Canada-Mercosur Free Trade Agreement or the new agreement between China and the Association of Southeast Asian Nations.

If negotiations are to take place as part of the 2026 CUSMA review, Canada must firmly defend the agri-food and forestry sectors, which are true economic drivers and pillars of our national security.

The 190,000 Canadian farm businesses support Quebec's entire food ecosystem, and they shine brightly on the markets. In 2024, they generated $92 billion in revenue.

The agri-food industry alone supported more than 541,000 jobs and contributed more than $67 billion to the GDP in 2024, which is five times more than the auto sector. Agri-food is present in every region of the country, from Saguenay to Saskatchewan, from the Okanagan Valley to Prince Edward Island, and it's a strategic source of economic growth and vitality in rural areas.

Defending agri-food is defending our economy, our food security and our sovereignty. Bill C‑202 is a major step forward to protect supply management by prohibiting the assignment of market share through tariff rate quotas. However, the pressure that the United States is putting on our system remains very real. Canada must take a firm stance against any attempt to weaken supply management and defend its national interests with the same determination as the United States, which protects its sectors.

One concrete way to facilitate trade between the three countries is to harmonize the rules. Reciprocity of standards would simplify market access, strengthen the competitiveness of Canadian farm businesses and promote a fairer trade environment.

The softwood lumber dispute unfairly penalizes Quebec's 31,100 private forest producers. These producers are subject to U.S. tariffs without support, unlike the factories and workers who benefit from support programs. Quebec's private forests generate more than 24,000 jobs and nearly $5 billion in revenue. It's time to recognize their strategic role and exempt them from punitive measures in CUSMA.

I will conclude with a call for vigilance. U.S. tariffs on foreign agri-food products are currently disrupting trade flows. Significant volumes of products originally destined for the U.S. market are diverted to Canada, often at prices akin to dumping.

Canada must take action to protect its agricultural producers from unfair trade practices that undermine our sectors and risk throwing our domestic market off balance. Canada must also act responsibly and meet its food obligations for Canadians. This is a real national security issue.

Thank you for your attention.

[The Vice-Chair, Conservative, Adam Chambers]

Thank you very much.

We will now enter our rounds of questioning. As a reminder, the first round is six minutes.

We'll start with Mr. Groleau.

[Jason Groleau, Conservative, Beauce, QC]

Good afternoon, Mr. Chair, witnesses and colleagues.

Mr. Gobeil, you are the president of the Producteurs laitiers du Québec. I come from Beauce. We're not going to argue much. There are a lot of dairy farmers in my region. I have some in my family as well. Although I'm not one of them, I know the sector well.

We're here to talk about the upcoming CUSMA review. People talk to me about it a lot, and it's stressing them out a bit.

I imagine you're also hearing the same thing from all your producers. It seems that the Liberals would be willing to drop a small part of the agreement. We in the Conservative Party find that unacceptable.

Are you confident that the dairy sector will be fully defended in the next renegotiation of this agreement?

[Daniel Gobeil]

Thank you very much for the question, Mr. Groleau.

Yes, you're in a very beautiful dairy-producing region.

Since the last election, we've heard about the commitments the government has made. Bill C‑202 was also discussed.

That said, as you know, the dairy sector has suffered successive concessions in the last three trade negotiations. I would say that we're at a breaking point. We gave up 18% of our market share. You talk to producers back home. The consequences are real.

We're counting on parliamentarians to ensure that those words translate into negotiations with the countries in question.

[Jason Groleau, Conservative, Beauce, QC]

I can tell you that we're watching carefully.

Do you feel that the government is consulting you enough?

[Daniel Gobeil]

Right now, we're receiving clear messages, but we have no direct link to the negotiating team.

[Jason Groleau, Conservative, Beauce, QC]

That's a bit concerning.

I want to talk a bit about supply management.

In your opinion, how important is the supply management system to the economic vitality of small regions like Beauce?

[Daniel Gobeil]

As you know, we have a model for regional economies. In Quebec, 4,215 farms across the province produce milk. On average, farms have 80 dairy cows. Our model is well suited for human-sized businesses, and it respects natural resources, land and water. We're seeing that more and more.

In addition, our farms are located near the factories. In your region, you also have processing plants, Mr. Groleau. Having processing plants nearby means that consumers have faster access to our products on grocery store shelves. It's essential to have short food circuits.

[Jason Groleau, Conservative, Beauce, QC]

What happens if the deal falls through?

[Daniel Gobeil]

Without going so far as to talk about worst-case scenarios, in our opinion, that's not an option. That's for sure.

We've done studies before. As you know, nearly 50% of our farms have only 75 dairy cows. We need to protect the supply management system.

If the deal falls through, we could lose more than half of our farms.

[Jason Groleau, Conservative, Beauce, QC]

I can confirm that we Conservatives are on the same page as you, Mr. Gobeil.

Thank you very much.

Mr. Caron, you are the president of the UPA. Earlier, you said that Quebec had more than 29,000 farm businesses.

Is that right?

[Martin Caron]

That's correct.

[Jason Groleau, Conservative, Beauce, QC]

That's a huge number.

Farmers today are entrepreneurs. We're talking about big businesses now. I know a lot about this environment.

For weeks now, we've been hearing a lot about the aluminum and steel sectors. My many contacts tell me the same thing, that the agricultural sector always comes in second or third.

Do you see it the same way?

[Martin Caron]

Thank you for the question.

Right now, people take the agriculture and agri-food sector for granted sometimes in our country. As I mentioned earlier about the GDP, it's been demonstrated that the agri-food industry contributes five times more than the automotive sector.

People want to protect the automotive sector, but the fact remains that agriculture and agri-food are high-performance sectors. The agri-food industry is evolving, and I think there's enormous development potential in agriculture.

That said, we need programs tailored to our reality on the ground. Above all, we need agreements, as we've already said. Predictability must be provided. To do that, we need to be able to put programs in place.

Mr. Gobeil mentioned the fact that the supply management system must be protected. I would add that, beyond supply management, we have to consider the whole collective marketing aspect.

I'm sure you're familiar with the maple sector, which produces our maple syrup. We export 62% of that product to the U.S. An agreement like CUSMA allows us to maintain those direct exports and secure that predictability.

[Jason Groleau, Conservative, Beauce, QC]

Thank you very much, Mr. Caron.

[The Vice-Chair, Conservative, Adam Chambers]

Thank you very much, Mr. Groleau.

Ms. Lapointe, you have the floor for six minutes.

[Linda Lapointe, Liberal, Rivière-des-Mille-Îles, QC]

Thank you very much, Mr. Chair.

I'd like to welcome the witnesses.

I'm pleased to be able to ask them questions.

Mr. Verheul, we've met before at the Standing Committee on International Trade when you were Canada's chief trade negotiator for NAFTA. I had the opportunity to take part in that meeting, and it turned out to be a very good experience.

You spoke earlier about a provision that bothers Mexico and Canada. The provision had been adopted, but you didn't agree to include it in the agreement.

Can you tell us more about that?

I'd also like you to tell me about the rules of origin issue. You said earlier that negotiations would be difficult.

What would you suggest?

[Steve Verheul]

First of all, I would say the rules of origin issue is going to be a challenging one because we had a fairly big challenge with that in the negotiations to begin with, particularly on autos. The U.S. wanted to initially have a provision that said a certain proportion of autos had to be manufactured within the U.S., which would have effectively destroyed the Canadian auto manufacturing industry at that time. We rejected that and went in a different direction.

I do have fears that the U.S. will come back and try to include maybe not just in autos but in other places as well this notion that a certain percentage of production has to happen in the U.S. at the expense of Canada and Mexico.

With the respect to the review clause itself, I would say that none of us around the table, with the exception of the U.S., really thought this was a wise provision to put into a free trade agreement. The whole purpose of free trade agreements is to provide assurance so that companies, exporters, understand what the rules of the game are. If those rules are going to come up for review every six years or more often, it's very difficult to make investments or to do long-term planning because you don't have the security that you would get from an agreement that doesn't have that kind of provision. That's why we were against it. We knew it would be disruptive. We knew it would lessen confidence in investing in North America.

[Linda Lapointe, Liberal, Rivière-des-Mille-Îles, QC]

Thank you very much for that.

You said a little earlier that Mexico and Canada had to pool their efforts to convince the United States. Together, we would be stronger and we'd all have a better economy. We have to try to convince them.

The last time you negotiated the trade agreement, the same president was in office.

What would you suggest to reach an agreement?

[Steve Verheul]

I think it's a different kind of discussion taking place now, in part because we have two separate sets of negotiations in front of us. The one is the short-term arrangements that the U.S. is trying to do. They have done it with the EU, Japan, Korea and others. Canada has been pursuing that kind of short-term deal. Mexico has been pursuing that as well. Mexico is making a lot more progress than Canada is to date.

Those kinds of agreements in my view aren't worth all that much. What's critical, I think, for Canada and Mexico is to ensure that we are aligned for the review of the agreement when we get to that. We have much more value, all three of us, in having a trilateral agreement rather than two bilaterals. That's going to be preserving the integration of the North American market, which is serving us all well with respect to prosperity and with respect to addressing challenges posed by others outside of the region, such as China. It makes us all more competitive in relation to the rest of the world.

[Linda Lapointe, Liberal, Rivière-des-Mille-Îles, QC]

Who should parliamentarians be pressuring?

How do we make sure that people understand the importance of the trade relationship between the two countries?