International Trade Committee on Oct. 30th, 2025

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

As Minister Lightbound said, what is best for our businesses are contracts, not subsidies. So we're on the same wavelength.

[The Vice-Chair, Conservative, Adam Chambers]

Thank you very much, Mr. Lavoie.

There will be a future round, hopefully.

We'll move to Monsieur Savard-Tremblay for two and a half minutes.

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

Thank you, Mr. Chair.

Ms. White, the issue of depoliticizing the CUSMA review was raised. Article 34.7 of that agreement provides for a joint review after six years. We're almost there. An annual review must also be conducted if a country doesn't wish to renew the agreement for a period of 16 years.

Depending on how it's used, it can become a tool for one partner to exert constant pressure on the other. In this case, it's easy to guess which one is more likely to use it.

Have you thought about that at all? If so, have you thought about solutions that would help us avoid that?

[Julie White]

It's an interesting question, but not a simple one.

Obviously, we've been thinking about this with our members. We held an initial consultation with them on the matter.

It's important that, during negotiations, rapid response mechanisms be included in the event of a unilateral imposition of a surtax. If this happens again and we manage to continue the negotiations, our members will certainly want the framework to be a little different.

When it comes to negotiations, predictability is important if we consider the situation more broadly. It's important to look at what's being proposed.

The one-time review that will be done is good news. We still have to adapt to the economic context and new sectors. The situation isn't simple, given the current U.S. government.

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

Have you observed any distortions between Quebec and the other provinces with regard to Canadian rebate quotas for vehicles and steel, for example? We know that these quotas were set up in response to tariffs.

[Julie White]

There isn't necessarily a distortion between the provinces. I do note, however, that the rebate process is very long.

One of our members told me this week that they've had to pay out about $3.4 million as a result of the retaliatory tariffs. He has been trying to get answers to his questions since June, but he is having trouble getting a follow-up from the Department of Finance. We'll be meeting with the department next week to talk about that.

There's obviously an issue with the delay on the rebates. If we want to help businesses have more cash flow, we need to fix that.

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

Thank you.

[The Vice-Chair, Conservative, Adam Chambers]

Thank you very much, Mr. Savard‑Tremblay.

For our final round, we'll have about three minutes each.

If that's okay, we'll start with Monsieur Groleau for three minutes and then go to Madame Lapointe.

[Jason Groleau, Conservative, Beauce, QC]

Good afternoon, Mr. Chair and witnesses.

Good afternoon, Ms. White. I hope you're doing well.

You are the president and CEO of Manufacturiers et Exportateurs du Québec. I come from the Beauce region, where there are a lot of factories. We're very proud of that.

If I understand correctly, the manufacturing sector accounts for 90% of exports and 500,000 jobs. Since 2010, those numbers have been fairly stable, if I'm not mistaken. We went from 500,000 to a little over 500,000. GDP has also been stable since 2010, which people don't see. That's very impressive. Your sector dominates the industry significantly, especially in Quebec.

We always hear about steel and aluminum. It seems like the sector you represent is always second or third.

What are your comments on that?

[Julie White]

Manufacturing is large, and steel and aluminum are part of that. We work with those sectors and we do processing, but it's true that it's much broader. You have to see it.

I've been in the media recently talking about furniture manufacturers. There are many other types of manufacturing in Quebec. Our sector is also highly integrated into supply chains. I'm thinking in particular of another major sector, aerospace.

All of these sectors need to be considered as part of the CUSMA review.

[Jason Groleau, Conservative, Beauce, QC]

At an event I had the opportunity to attend, you talked about the need to alert public authorities. You mentioned the number of temporary foreign workers, especially in regions like Beauce. For your information, the unemployment rate is 3% in Beauce. We in the Conservative Party want that rate to be at least 5.5% and continue to rise. I think reducing the percentage of temporary foreign workers from 30% to 10% has alarming repercussions.

What do you think about that?

[Julie White]

Quebec is a vast territory. Many manufacturing companies are far from major centres. There are, of course, manufacturing businesses in Montérégie and Montreal. However, from the southern part of Montérégie, to the Lower St. Lawrence, to Saguenay—Lac‑Saint‑Jean, unemployment rates are very low. Beauce is a good example.

Right now, we are losing workers, and that is causing slow downs in production. Businesses have already shut down evening shifts, night shifts and weekend shifts. That must be happening in your riding as well, Mr. Groleau.

We're seeing a slowdown in production in a number of businesses. It also results in lost contracts and lost growth. Business owners tell me that they would be able to take on a new contract and that their business is fine, but they won't be able to hire workers for production.

[Jason Groleau, Conservative, Beauce, QC]

The fact that negotiations aren't moving forward also creates instability.

If I'm not mistaken, 15% of your members no longer want to invest because there is no predictability. They're also stressed about the new negotiations that Canada will undertake with the American government.

That's what's not working, isn't it?

[Julie White]

Investment has indeed slowed. We've been seeing it for a year, since Mr. Trump was elected.

Our members are waiting, even though they have the money to invest. They're being told to invest, but certainly, if you give them a loan but they have to pay a 50% tariff on their exports, they're not going to be very tempted to invest right now. They're taking a step back, and they're waiting to see what's going to happen.

So this period of uncertainty does indeed hurt the affected sectors, but it also hurts those that are affected less directly. Members from all over are experiencing this.

[The Vice-Chair, Conservative, Adam Chambers]

Thank you very much.

Go ahead, Madame Lapointe.

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

Thank you very much, Mr. Chair.

I would like to welcome the witnesses.

Everything they said and expressed is very interesting, but I only have three minutes of speaking time, so I have to make a choice.

I'll turn to Export Development Canada.

Mr. Winterhalt, you said earlier that your clients were trying to diversify their exports to all places where free trade agreements already existed.

Some of your clients are turning to Africa. They are taking advantage of the fact that French is spoken there to do business.

Is that correct?

[Todd Winterhalt]

Thank you for your question.

I would say that Africa probably still rests as the last region of interest, broadly speaking within Canada. We've seen the most increase in attention paid to the Indo-Pacific, in the recent three or four years. I would say that, in the last six months, Europe has become, again, very interesting for Canadian companies, regardless of region or sector. We are starting to see a bit more interest in the Middle East, after a number of years of quieter activity there. Africa, for many companies, remains the final frontier in many respects. It's very specific to sector or to region.

To your point, then, with the Francophonie and French west Africa, there are very good connections there. They have been maintained. South Africa holds some opportunity. Again, in the global sense, its probably the area of least interest at this point.

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

Thank you.

We're going to try to get the best agreements we can.

With regard to the intellectual property, knowledge and digital industry, which is growing a lot in the Montreal region, I know you're going to guarantee loans and client accounts.

However, do you have any suggestions for us so that we can better protect this industry?

[Todd Winterhalt]

I think it's a wonderful area of growth for Canada and for companies in Quebec, in Montreal in particular. With the strength of the AI industry there, digital technologies are very much in demand. All of our products and services at EDC, in terms of risk mitigation, would apply equally to companies in that space.

What's interesting is that they have a real head start, though, on goods exporters, in some senses. Only 50% of exports for services are destined to the United States. It's already about half-and-half. There's more opportunity for even faster growth and diversification to other markets and services than there is for goods. I think that is an area of additional growth.

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

Thank you very much.

Ms. White, you said earlier that Quebec had to be represented at the negotiating table for CUSMA.

In the last negotiations on this agreement, which took place in 2018, did the presence of a Quebec representative help and contribute to achieving good results?

[Julie White]

We believe so. I would say that there seems to be a consensus among Quebec's economic groups.

Our economy has its own unique characteristics. They are part of who we are, and they have worked for us. CUSMA was signed, and it was a good agreement. We were satisfied. Overall, it provided favourable conditions for Quebec businesses.

It certainly helped.

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

Thank you very much.

[The Vice-Chair, Conservative, Adam Chambers]

Thank you very much. We appreciate the presence of our witnesses here this evening for our first panel.

We will suspend for a few minutes. We have a number of witnesses online, whom we will have to test, so we'll suspend this meeting and come back in about four minutes.

Thank you.

[The Vice-Chair, Conservative, Adam Chambers]

I call this meeting back to order.

Thank you very much. We have to begin our second panel.

This evening we have with us Mr. Verheul, who is appearing as an individual, but he is well-known to members of the committee for his expertise in trade. We have the Dairy Farmers of Canada, represented by Mr. Wiens and Mr. Gobeil. The Union des producteurs agricoles is represented by Monsieur Caron and Monsieur Tougas.

I will open the floor for opening remarks. These are five minutes each, or five minutes for each organization. I will give you notice by showing an orange folder when you have 30 seconds left, so you can begin to wrap up your remarks and avoid my cutting you off. Thank you very much.

Mr. Verheul, we'll start with you for five minutes.

[Steve Verheul, Principal, GT and Company Executive Advisors, As an Individual]

Thank you, and good afternoon, everyone.

Good afternoon, Mr. Chair and committee members.

My name is Steve Verheul. I am the former chief trade negotiator for Canada, and I was Canada's chief negotiator for the CUSMA negotiations.

I am currently the Canadian co-chair of the Coalition for North American Trade, a group of companies and organizations from Canada, the U.S. and Mexico dedicated to a successful review of the CUSMA. I am also a member of the Prime Minister's council on Canada-U.S. Relations, and I am a consultant with GT and Company Executive Advisors.

To start with, the review clause in article 34.7 of the CUSMA was not a provision that Canada or Mexico wanted to see included in the agreement, but now that the review is rapidly approaching, we need to recognize that even in these challenging times, the review presents both challenges and opportunities.

The key challenge, of course, is around the tariffs that have been imposed by the Trump administration. Given that there doesn't appear to be a satisfactory or sustainable deal on the table at this point, it seems unlikely that these issues will be resolved before the review. Canada will need to push hard to both maintain the current CUSMA exemptions and address the U.S. section 232 tariffs that are causing so much damage to our steel, aluminum, auto and softwood lumber sectors, and various others. These tariffs are clearly inconsistent with the CUSMA and, indeed, with any free trade agreement, and that will likely be our biggest challenge.

Issues in the review that we anticipate include rules of origin, certainly, as well as various bilateral issues, as the U.S. has a long list of bilateral issues with both Canada and Mexico. There will also be a number of new issues that will pose challenges in the review as well.

There will also be issues like aligning and strengthening North American economic security and competitiveness. These issues were specifically highlighted by the U.S. side in its consultation notice, and I think that's very important because it offers us the opportunity to pursue common causes across North America with the U.S., and that's a big part of the path forward.

The biggest challenge Canada and Mexico will face is to convince the U.S. of the reality that extending the agreement is the most effective way to promote economic growth and prosperity in all three countries, that this is essential to ensuring that economic security can be most effectively addressed, and that the U.S. will be far more competitive in the world with an integrated North American market than with a go-it-alone approach.

The deadline for written submissions in the public consultations on the review in Canada and the U.S. is on November 3, and it is a couple of weeks later for Mexico. These consultations provide an important opportunity for stakeholders in all three countries to demonstrate broad support for the CUSMA and an integrated and competitive North American market.

The USTR is obligated to provide a report to Congress in January with its assessment of the operation of the agreement, specific recommendations for action to be proposed and the U.S. position on whether to extend the term of the agreement. To put further pressure on Canada and Mexico, the U.S. is unlikely to take a position that supports an extension of the agreement at this time. They're going to try to use that as leverage.

The period between January and June will be critical to the future of the CUSMA and to our trading relationship with the U.S. Discussions during the review will provide opportunities for Canada to exercise broader leverage than it has in the more narrow discussions that have been pursued more recently, but it will be important for Canada to ensure that it is well prepared, and there is much work to be done.

Canada consulted extensively with industry, labour and provinces and territories throughout the CUSMA negotiations on strategic approaches, on detailed positions and on fallbacks. As a result, Canada had the advantage at the negotiating table of having more detailed knowledge of the issues, more awareness of the pros and cons of various proposals and more extensive preparation for various scenarios. We also had the advantage of a highly unified Canadian position across industry, labour and provinces and territories, which gave us the ability to be agile at the table, with strong support behind us. We need to make sure we enter the review with those same advantages.

Thank you, Mr. Chair.