International Trade Committee on Oct. 30th, 2025

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

Thank you.

What are the instructions to EDC from the Government of Canada respecting trade between Canada and China. Is that an area of growth or increased emphasis? Has that changed recently?

[Todd Winterhalt]

I think it's a very timely question. I think there is existing, I guess, engagement taking place shortly. EDC has remained open and on cover for the Chinese market over the course of the last decade. I think it's fair to say that's been a fairly narrow part of our portfolio and largely revolves around our accounts receivable insurance for Canadian companies that continue to export to China. The market is not particularly friendly for financing and direct lending.

As a result, the portfolio is relatively small, but we would say that China and India remain two of the anchor markets for all growth in Asia going forward.

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

Thank you.

[The Vice-Chair, Conservative, Adam Chambers]

Thank you very much. The first round has expired.

Mr. Fonseca.

[Peter Fonseca, Liberal, Mississauga East—Cooksville, ON]

Thank you, Chair.

My first questions will go to Mr. Krips.

Mr. Krips, we know these tariffs on softwood lumber are unjustified. In your opinion, how best do we convince the Trump administration to understand this and to reverse course?

[Jason Krips]

Thank you very much for your question, Member.

Softwood lumber is probably the longest-standing trade dispute between Canada and the United States. It doesn't just go back decades. It actually goes back centuries.

Part of the issue is how we actually produce, grow and then harvest our lumber—the broader forestry sector—versus the United States. Here in Canada, about 90% of the forestry products are developed from public lands. There's a symbiotic relationship with companies, which actually pay timber dues to each of the different provinces they're active in for the right to harvest, but with those dues and the agreements they form with the provinces come responsibilities.

As companies, they need to harvest and replenish, and they have to do consultation with first nations and other communities. They have regulated needs so that, within two years of harvesting, we need to reseed. We typically grow three seeds for every seed we harvest. We have to reclaim the lands and the roads afterwards. All of that is actually baked into the cost of production, whereas in the United States—

[Peter Fonseca, Liberal, Mississauga East—Cooksville, ON]

I'm going to jump in.

What is it that will convince the Trump administration that this is unjustified in terms of the way we do our business here and the way the forestry sector works? We've gone to the WTO. We've won numerous times at the WTO. We've come back again.

What is it that is not getting through to the Trump administration that these are unjustified?

[Jason Krips]

My sense is that we need to showcase the partnership approach of our different sectors and the fact that they have needs we can actually supply. Historically, and going forward, they will need to import about 30% of their products. Their home builders actually demand our product. They like working with it.

We need to make sure the administration recognizes that it's their own producers of houses who like our product, use our product and need our product. The more we have tariffs on it, the more expensive it is for them to build houses, which means that their consumers are paying more. We need to actually get that message out.

[Peter Fonseca, Liberal, Mississauga East—Cooksville, ON]

On those U.S. home builders you're speaking to and also the American consumers of homes, is that not an opportunity to put pressure on the administration to understand that these are inflationary, that this is costing Americans thousands of dollars to purchase a home?

As you said, it's very difficult for a new homeowner. I think you mentioned that the average age is 38 now in the United States.

Would that be an approach that should be taken?

[Jason Krips]

We certainly need to amplify the inflationary pressures that these duties put on the United States for home building and home purchasing, for sure.

[Peter Fonseca, Liberal, Mississauga East—Cooksville, ON]

What has allowed us to succeed when we've won those WTO cases? Why does this continue to reoccur when it comes to the industry?

[Jason Krips]

That's why I was going into how we actually produce our lumber versus how the United States does. A company that purchases their timber actually purchases at gate, so they don't have those other responsibilities. Therefore, with our cost structure, it's more expensive to produce here. That has been typically how the systems operate, and that has been part of our challenge: articulating that structurally they're just different production systems.

[Peter Fonseca, Liberal, Mississauga East—Cooksville, ON]

I think what you were asking was for forestry to be at the table when we go into this CUSMA review.

Is that to make it a continental industry so that we would not have this friction over and over again, and every country would understand the importance of that flow through?

[Jason Krips]

Absolutely, and it's making sure we are part of the larger equation with the other priority sectors such as steel, aluminum, auto, dairy and agriculture.

[Peter Fonseca, Liberal, Mississauga East—Cooksville, ON]

Thank you.

My next questions are going to be for Mr. Winterhalt and Ms. Tognarelli.

We had some businesses here that we're discussing the challenges they have now with the de minimis and getting through in the United States. These are small businesses that are selling products that are maybe $20, $50 or $150, and now with these new duties and again that friction at the border, this is impeding their ability to do business with the United States.

Are you helping those SMEs with their businesses, and could you take us through how you are helping them?

[Todd Winterhalt]

Sure, I'm happy to do that.

The smallest of the businesses tend to be clients of the Business Development Bank or BDC . In the small and mid-sized range, we certainly have seen our customers express significant struggles with the changing tariff regime, so in March of this year, EDC launched a program called the trade impact program, or TIP. We put an additional $5 billion in capacity available to, in particular, small and medium-sized exporters to help them with some of the risks they were seeing. That could include things like an increase in a tariff rate after they had signed a contract and then the buyer in the United States repudiating that contract, saying that it's too expensive for them. We introduced an insurance policy that would help them mitigate the risk of that happening and offset the differential in tariffs.

We've also provided additional working capital support for many Canadian small and medium-sized exporters to allow them to ramp up their production, hopefully to look at secondary or tertiary markets and mitigate some of the risk of a U.S. buyer market only approach. That's been largely successful. To date, we've seen—we just got the numbers today through October 2024—roughly 761 companies apply to that for lending or working capital support. About 30 of those have been successful, and we've supported them to the tune of about half a billion dollars Canadian. On the insurance side, which is perhaps more important for the smaller companies, we've helped 2,700 companies mitigate some of the risk with respect to the U.S. tariff regime to the tune of about $800 million Canadian. So far, there's been about $1.3 billion in support since March.

[The Vice-Chair, Conservative, Adam Chambers]

Thank you very much, Mr. Fonseca.

Mr. Savard-Tremblay, you have the floor.

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

Thank you, Mr. Chair.

I want to thank all the witnesses for their remarks.

Ms. White, I just want you to clarify something for me.

When you talked about an ideal negotiator, so to speak, you were referring to someone from the economic sector.

You prefer this field over law or politics.

Is that right?

[Julie White]

Thank you.

We want someone who has both a sound understanding of the economic environment and a good grasp of negotiations.

It could be someone from the legal profession. In the past, there have been lawyers, former politicians and people who worked in the government and who had extensive knowledge of all Quebec's economic sectors.

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

I see.

According to a June 2025 survey of Canadian manufacturers and exporters, I believe that 16% of respondents said that they had moved some or all their operations. Most of these companies already had facilities in the area in question.

Do you have any data on Quebec manufacturers and exporters?

Have you seen anything similar?

[Julie White]

Our latest data specific to Quebec dates back to May. I'll give a somewhat cautious response.

That said, we see similar things happening. The people moving their operations are usually people who had already set up shop in other places, such as the United States. They already had production targets or they had started the process and then fast‑tracked it to see what would happen.

Not everyone has really moved their operations entirely, as we perhaps anticipated at the start of the tariff war in February and March. However, some have prepared a relocation plan.

Obviously, we're deeply concerned about this. The manufacturing sector is the largest industry in Quebec, but it has also been in decline in recent years.

When we see companies relocating parts of their operations, we find this worrying.

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

You said that companies that relocated part of their operations to the United States often already had facilities in that country.

This is a general observation, but does it apply more to certain industries in particular?

[Julie White]

Many of them are companies that produce building materials or that process metal. These products are used in large infrastructure projects and the clients are mostly Americans.

Certain types of products don't have a large enough market in Quebec or Canada. As a result, companies turn to the United States. These companies are often manufacturers of metal parts or products.

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

Your organization has often criticized the fact that federal programs fail to take regional realities into account. Please feel free to elaborate on this if you wish.

Your organization has also often spoken about the federal government's lack of flexibility regarding temporary foreign workers.

Does the federal government's red tape around hiring foreign workers, such as skills recognition, and contract requirements hinder competitiveness more than tariffs?

[Julie White]

We're in a difficult economic situation. We don't need to shoot ourselves in the foot.

The business environment must be cleaned up. Right now, the biggest issue for our members concerns temporary foreign workers. Quebec's permanent immigration system is different from the system in the rest of Canada. This must be recognized. Hence our request to the federal government for a grandfather clause on temporary foreign workers.

All the aspects that you listed are currently undermining companies. They add an unnecessary burden under the circumstances.