International Trade Committee on Oct. 30th, 2025

[Steve Verheul]

I don't think there's any alternative to a lot of work, a lot of conversations and a lot of contact.

I think that we got off to a bad start with respect to Mexico. Certain comments by some provincial premiers made our relationship with Mexico much weaker than it would have been otherwise. They're trying to repair it now, but we need to try to get on the same page as Mexico and to work with them to confront the challenge we're facing from the United States.

I also think that we could be doing so much more to ensure that we have industry on side and provinces and territories on side, all understanding what it is the government is trying to achieve and being consulted on strategy, fallbacks and different scenarios, to make sure that we can move more easily at the negotiating table.

I think this is the one issue that I'm probably most concerned about because, when we went to the negotiating table to negotiate the CUSMA, Canada knew far more about every single issue on the table than the other two parties did. They knew that because we spent so much time consulting with industry. At the end of the day, we're negotiating these agreements for industry, so if we're doing that, we'd better make sure we know what it is they need before we lock something in.

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

Thank you very much, Mr. Verheul.

[The Vice-Chair, Conservative, Adam Chambers]

Thank you very much, Ms. Lapointe.

Mr. Savard‑Tremblay, you have the floor for six minutes.

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

Thank you, Mr. Chair.

I'd like to thank all the witnesses for their presentations.

My first question is for the representatives of the Dairy Farmers of Canada and the Union des producteurs agricoles.

I represent the riding of Saint-Hyacinthe—Bagot—Acton. As you might suspect, there are farm businesses in my region too. We also do a bit of agri-food processing, but I wouldn't say that the region is the processing capital.

The issue of supply management was raised before our committee. In fact, we heard from Mr. LeBlanc, the Minister responsible for Canada-U.S. Trade, Intergovernmental Affairs and One Canadian Economy. He told us that touching supply management was out of the question.

What came out of the discussion wasn't really about the loopholes in the system or the tariff quota rates. It was more about working on import rules in a variety of ways.

Can you explain how this exercise amounts to trading four quarters for a dollar?

It's a fact; it won't run counter to Bill C‑202. However, if the rumours were founded and it had to come to that, it could nevertheless do you very real harm.

That said, it's okay to give that the benefit of the doubt.

[Daniel Gobeil]

I'll answer your question first.

Obviously, people talk when we say that there will be no concessions. This is also about allocating tariff rate quotas.

In terms of stability, as you know, producers have lost market share. Processors are not processing that product. Right now, Global Affairs Canada has granted TRQs to dairy processors. We believe that's essential to retain stability. Details can lead to an imbalance in the market.

Many focus groups have discussed the Americans allocating TRQs. These focus groups were all in Canada's favour in terms of administering the agreement. Why give something that's regulatory and has been done right? We don't want to make any concessions at all.

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

Mr. Caron, would you like to add any comments?

[Martin Caron]

A few weeks ago, we had a meeting with the organization that represents American producers and with some Mexican producers. That's not what producers want, far from it. Instead, they have tariff problems with China, and that's what they'd like to resolve.

I agree with Mr. Gobeil; we agree on that. That's not what producers want. When we ask them if they agree with the tariffs the Americans are imposing, they really don't agree with them. They're not happy about this situation because it brings up inflation.

There's an economic imbalance. Between 20% and 25% of farm businesses in the U.S. are in financial trouble right now. In our producer-to-producer exchanges, it's clear that this is not what they're asking for. On the contrary, we need to go back to an established way of doing things.

We also need to recognize that CUSMA carries added value for our three countries. I talked about it earlier. I would add that BRICS member countries, such as Brazil, Russia, India and China, are also signing trade agreements. Countries are coming together to present a common front in other markets.

We need to maintain CUSMA and not open the door to increasing import TRQs.

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

As I understand it, Mr. Caron, you agree with Mr. Gobeil's statement that the community is calling for loopholes to be closed. That does not exclude the possibility of exploring various ways to reach an agreement.

Is that correct?

[Martin Caron]

Yes, that's right.

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

You also said that retaliatory tariffs should be astutely chosen.

First, were they? How can we do better?

[Martin Caron]

As we heard, when Canada imposes counter-tariffs, it may end up penalizing itself. The government really has to approach that judiciously.

Furthermore, as I said in my speech, now that the Americans have imposed tariffs on market garden and horticultural products as well as vegetables for processing, those products are coming in from other countries that previously exported their products to the United States, but are now exporting to Canada because of the tariffs.

This is problematic and has major consequences for our producers in terms of their products and processing activities. Production at our processing plants is declining. Some of these imports come from China, Brazil, Egypt and Thailand. We therefore need to find a way to improve the situation.

What is unacceptable, in my opinion, is that our health centres and hospitals are opting for imported products instead of purchasing from our local producers. It's just not right. Canadians want to prioritize Canadian products. The government must tackle this problem.

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

Mr. Caron, what about a scenario in which we hurt the Americans who want to hurt us? For every one of their tariffs, we apply a countermeasure without hurting ourselves.

What do you think of that scenario?

[Martin Caron]

We have trade tools that give us that protection, such as the national priority for the agriculture and agri-food sector. We have to use these types of tools to counter the effects of tariffs. If we do not impose counter-tariffs on products that are being dumped, we have to protect our rural economies by finding other ways to block those products from coming into the country.

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

Thank you both.

[The Vice-Chair, Conservative, Adam Chambers]

We'll move to our second round.

We have Mr. McKenzie.

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

Thank you, Mr. Chair.

Mr. Verheul, I want to say that I really appreciate your bringing your experience here before this committee at a very critical time in our country right now with respect to our most important and largest trading relationship.

As you see what's unfolding now, do you support a larger, more comprehensive negotiation approach versus what we seem to be getting pushed into now, which is a series of smaller and individual industry or segmented negotiations?

[Steve Verheul]

From my perspective, if you pursue smaller, more segmented negotiations, Canada is not in a good position for those kinds of discussions. It essentially means that the U.S. would be able to use considerable leverage on a handful of issues and then do it again on another handful of issues.

The only way Canada has more extensive leverage is if it's in a broad discussion where various issues can be played off against each other. You can start to look at an overall package that can be balanced. It's highly unlikely that you can ever get a balanced outcome out of those smaller handfuls of issues and dealing with them one at a time.

If I could just extend that a bit, if we're talking about steel, aluminum and energy, it's really not going to be an outcome that is going to really advance us. We're not going to get a great outcome on steel and aluminum because the U.S. will protect enough room to ensure that they can bring manufacturing into the U.S. We're not going to get a great outcome there.

On energy, we're going to pay. We're going to pay for a not great outcome, which I don't think is where we want to be. I think we need to be looking at trying to recover some of our leverage and position ourselves to be able to use that.

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

This committee has heard in previous testimony that one of the great strengths that we took into the negotiation of CUSMA was something you referred to today. It was the extensive preparation and consultation domestically here in Canada in order for Canada to be prepared for those negotiations.

If I understood you, sir, and I just want to confirm, we're not in that position today.

[Steve Verheul]

We are not in that position today. From what I understand, the consultations are taking place, but they are taking place at very high levels. There will be calls from ministers and the Prime Minister to CEOs.

That's not what gets discussed at the negotiating table. Negotiations are all about the fine detail of the very specific issues that you're dealing with. The consultations need to take place with the experts on the industry side and the experts on the government side, so that they have the common understanding of what the concern is and what the objective is to try to address it. That's the part that's missing, from everything I've seen.

As I said earlier, our greatest advantage when it came to the negotiating table, even when the political figures were there, was that Canada knew far more detail than anybody else because of that consultation process.

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

It seems to me that in this challenging time, when decisions are being made by a partner that we don't control, this is an issue that we do control.

[Steve Verheul]

Absolutely, we do control it. It's up to us to do that.

We've seen increasing tensions between the federal government and provinces on various issues. I think if you have an ongoing process of consultations, then everybody starts to buy in to what the plan and the process is. If we arrive at the table with a unified position, with the support of industry and labour and with provinces and territories behind us, then we can move more quickly at the table too. We can do fallbacks. We can be much more agile.

I'm concerned that if we are just going to have very high-level consultations and rely mainly on high-level officials to have conversations, then we are just putting ourselves in the same place as the U.S. and we're losing our advantage.

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

Sir, it makes me think that if the captain of the team is not strong, then the individual players tend to go in their own different directions. That's a little bit of what seems to be happening when our provincial premiers are feeling the need.... I don't know what they're feeling, but what they're doing is acting. Perhaps we need that stronger leadership in respect of this file.

[Steve Verheul]

I would just say that when we dealt with provinces—and Premier Ford and others were there at that time—we had an elaborate system of consultations at the officials level between federal officials and provincial officials.

When a premier was getting a briefing on what was going on, it came out of those discussions that we had already had. We were already building that unity in from the bottom up. We didn't have those kinds of problems at all during the negotiations.

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

Everybody was singing from the same song sheet.

I just wanted to ask you one more question.

[The Vice-Chair, Conservative, Adam Chambers]

Mr. McKenzie, we have expired the time. Thanks very much.

Go ahead, Mr. Lavoie.