International Trade Committee on Sept. 18th, 2025

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

Thank you, Madam Chair.

I'm going to go a little further back than Parliamentary Secretary Naqvi in terms of where trade all started here in Canada. We really could start at the beginning of Canada, with our fur trade, and jump to 1965, as we heard, with the Auto Pact. We continue to be a trading nation.

Canada is 0.5% of the world's population but makes up 2.5% of the world's trade, so we punch well above our weight. That is because we have always looked out towards trade. We see it as an opportunity for growth and also for our workers and for our businesses. The way that we do it has always been around trade, but fair trade.

The agreements that we have looked to set up.... I had the opportunity to sit on this international trade committee back in 2015 as we were going through the renegotiations of the NAFTA, the new NAFTA or the CUSMA as we call it today; the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, the CPTPP, that we have; as well as the CETA with Europe. Within those agreements—and this speaks also to Monsieur Vaillancourt's point—we always wanted to bring in those elements of a level playing field when it came to labour standards, environmental standards, etc. I know this speaks well to how Mr. Kingston and his association feel.

We saw that we needed much more diversification. That's why we set up those agreements. In 2018, we set a target through Global Affairs Canada to increase our exports to markets other than the United States by 50% by 2025. Well, we achieved that stretched goal by 2024. We hit that target of 50%, thanks in part to groups like the Pork Council. The Pork Council has done an outstanding job. Actually, some of the members of this committee—Madam Chair, the PS, MP Chambers and a number of others—were at the Indo-Pacific meeting yesterday for the heads of mission. Japan's ambassador to Canada, Ambassador Yamanouchi, raved about Canadian pork, asking how they could get more Canadian pork and what we could do for those exports.

Through these agreements that we've had and to achieve what we've been able to achieve, this 50% increase.... Take us through what was put into those agreements that allowed an industry like the pork industry to expand so much and enabled it to export. I heard that 70% of our product here is exported.

[René Roy]

Yes, indeed, the pork industry, in general, has been really proactive in trade, notably in Japan. I will use Japan to exemplify what you were mentioning.

The fact that we have science-based rules allows us to have a common language. Once we have this common language, we can easily solve challenges, because we are speaking the same language.

A good example is that we have a CFIA office in Japan. The fact that we have people on the ground there helps a lot with making sure that we are able to communicate and also find solutions when there are technical challenges. This success is clear today. Now, in terms of value, Japan is our first export market in the world, in front of the United States. This has never been seen before. This just shows you how successful we can be by implementing science-based rules.

We have heard about the budgetary challenges, and for sure, these kinds of CFIA offices are important for us. They are a stepping stone to promote how we do business with the rest of the world.

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

Thank you.

Do I have some time?

[The Chair, Liberal, Judy Sgro]

You have 30 seconds.

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

I don't know if there will be 30 seconds here.

Mr. Kingston, as you know, we're getting into the review of CUSMA. What are your thoughts on where the opportunities are and where some of the threats or risks are as we go into this review?

[Brian Kingston]

The objective has to be achieving certainty. Uncertainty right now is killing the Canadian business community. We don't know what the rules of the game will be. I think the objective has to be to renew the deal and give the economy certainty that this will continue.

[The Chair, Liberal, Judy Sgro]

Thank you very much.

Mr. Savard-Tremblay, you have two and a half minutes, please.

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

Let's get into it, Mr. Vaillancourt.

We were talking about the rules-based order. You were saying that the government needed to ask questions and examine who benefited from those rules, how they were established and their actual results.

If you had to name a few rules that you think deserve to be reviewed thoroughly, even challenged or overturned and replaced, what would they be?

[Claude Vaillancourt]

After all these years of free trade, I see two fundamental flaws, two things that nobody seems to take into account in free trade agreements and the rules they make.

The first is a much greater level of environmental protection than what we have now. These days, governments have a tendency to drop environmental protection for economic reasons, but there's no real justification for that because the environment should be a top priority. That's the first thing.

The second problem that free trade agreement rules haven't solved is social inequality, which is steadily growing. Free trade agreements don't cover tax policy at all, but perhaps they should, considering that it directly affects competition between countries and marketplace competitiveness. Social inequality is getting worse with every passing year. We haven't found a solution, and we see this issue as very problematic.

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

Should we consider a minimum corporate tax rate like the one in the agreement among OECD countries?

[Claude Vaillancourt]

Yes, but that agreement is totally inadequate, I have to say. A 15% minimum tax rate actually makes some countries reduce their tax rate, so this is not good enough.

Plus, there are all kinds of loopholes. It's an extremely complex agreement, and the intentions are good, but it's not working out in practice. It is better than nothing at this point, though.

Unfortunately, President Trump is trying to get the agreement scrapped. Instead of improving it, it seems headed for the scrap heap. This is very disheartening for people who've been working for social justice for years. It feels like we're backsliding at a time when our civilization should be making significant progress.

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

Thank you.

[The Chair, Liberal, Judy Sgro]

Thank you very much.

Mr. Mantle, you have five minutes, please.

[Jacob Mantle, Conservative, York—Durham, ON]

Thank you, Madam Chair.

Mr. Kingston, correct me if I'm wrong, but I think I heard you say that one of the outcomes you desire is for no differentiated outcomes for auto trade between Canada and the U.S. Did I hear that correctly?

[Brian Kingston]

Yes, that's correct. Given the integration, we've always tried to have the same access as the U.S. would have.

[Jacob Mantle, Conservative, York—Durham, ON]

Is that the case right now?

[Brian Kingston]

No. The U.S. has been very active in both putting up tariffs and negotiating bilateral agreements with other markets. That objective is becoming a little more challenging to achieve.

[Jacob Mantle, Conservative, York—Durham, ON]

In the situation we have right now, that would be a failure, in your opinion. We don't want to stay where we are right now.

[Brian Kingston]

No. The one area that is positive, though, is on the China surtax and the fact that Canada matched the U.S. action. That was necessary and must be maintained.

[Jacob Mantle, Conservative, York—Durham, ON]

Thanks. I'll get to that in a moment.

Can you tell us a little about the current economic impact to our auto industry of the U.S. tariffs on Canadian autos?

[Brian Kingston]

It's significant. Right now, through the first and second quarters of 2025, automakers have reported a total of $12 billion U.S. in tariff costs. That makes it extremely challenging to continue to produce at the levels that automakers traditionally have produced here. If this persists, it could have an impact on jobs and production. It's extremely damaging.

[Jacob Mantle, Conservative, York—Durham, ON]

In a worst-case scenario where there's no larger deal, whether that's CUSMA or something else, and there's no sectoral deal with respect to autos, what happens to the industry?

[Brian Kingston]

The worst-case scenario is that we go back to a pre-Auto Pact environment, where you have to produce in Canada to access the Canadian market. The federal government has set up what's called a performance-based remission framework, which effectively puts that in place.

That is where things would go. You would have a far less efficient industry that is focused solely on Canada, and the same thing would take place in the United States.

[Jacob Mantle, Conservative, York—Durham, ON]

Do you think, in that situation, that the auto industry in Canada would be viable?

[Brian Kingston]

It would be viable, but it's hard to see a scenario where it would be as productive and as large and have as big a footprint.