International Trade Committee on May 26th, 2026

[Sima Acan, Liberal, Oakville West, ON]

Sure.

Given the increasing geopolitical and supply chain pressures globally, how is Taiwan balancing innovation, export competitiveness and economic security in critical ICT sectors?

[Harry Ho-jen Tseng]

That is a very important question. It is actually the challenge we are facing now.

Fortunately, it isn't only the government that is very cautious in moving on that path in our development of the AI industry. We have a very robust civic society in Taiwan. People are there all the time to remind the government if they think it is getting a little distracted. It is a process of self-rectification in Taiwan.

I cannot say that here, but we touched upon Taiwan's maybe moving away from its policy of being a nuclear-free homeland. If I say this in public, I may be inviting trouble, but it is something in the public discussions in Taiwan.

[The Chair, Liberal, Judy Sgro]

Thank you.

Are there any outstanding questions?

Representative, thank you so very much. Your information was invaluable to all of us. I will say that I am very proud to support Taiwan. It's a democracy that I believe is leading the way in a very important part of our world. Thank you, all, for your work, and God bless Taiwan. Thank you.

I will suspend until the other group comes over.

[The Chair, Liberal, Judy Sgro]

I'm calling the meeting back to order.

Pursuant to Standing Order 108(2) and the motion adopted by the committee on Thursday, September 18, the committee is continuing its study of Canada and the forthcoming CUSMA review.

We have with us today, from the Canadian Home Builders' Association, Kevin Lee, chief executive officer. From the Pacific Manufacturing Association of Canada, we have Brendan Sweeney, president and chief executive officer.

Welcome to both of you. Thank you for taking the time to come to speak to the committee today on a really important topic as we continue to do a review of the CUSMA and move forward.

I will turn the floor over to Mr. Lee for five minutes, please.

[Kevin Lee, Chief Executive Officer, Canadian Home Builders' Association]

Thank you for having me today.

The Canadian Home Builders' Association, or CHBA, represents over 8,500 member firms across the country, including builders, developers, renovators, trade contractors and all the support services and suppliers that make up the residential construction industry. Our members build low-rise, mid-rise and high-rise homes, both for ownership and for rent.

As you know, Canada is in a housing supply and affordability crisis. CHBA's housing market index, a leading industry sentiment indicator, shows that for Q1 of 2026, we're at near record-low builder confidence in the single-family market and at a new record low in the multi-family market, signalling fewer housing starts ahead for home ownership. In studying the forthcoming CUSMA review, it is therefore critical that the impact on housing be top of mind.

The sector continues to deal with many challenges, including high taxes, overly restrictive mortgage rules, labour shortages, high material costs, municipal process delays and other barriers that are resulting in not enough homes being built. These challenges are directly related to affordability issues and are impacting Canadians who wish to own a home. Added to these are the challenges of the big issue of diminished consumer confidence, very much driven by the uncertainty over trade and tariffs with the United States.

CHBA's number one recommendation on the trade war has always been to avoid Canadian retaliatory tariffs on construction materials. Where countertariffs are deemed necessary, CHBA has advised the government to look to product categories where there is ample supply within Canada or from other countries. During the CUSMA negotiations, CHBA advises that any final agreement not result in exacerbating the ongoing housing affordability issues in Canada or result in long-term actions that will negatively affect businesses and consumers where housing and home ownership are concerned.

Home construction is deeply connected to North American trade, and supply chains vary significantly across regions in Canada. In many cases, the north-south trade for some products has been more prevalent than east-west. For example, distributors in Alberta source their drywall from completely different manufacturers than distributors in Ontario do.

CUSMA is designed to reduce trade barriers, effectively allowing buy or make options. This has previously resulted in efficient and effective distribution chains, including specializations in plants north and south of the border, so any changes to trade rules, whether through tariffs, rules of origin or administrative requirements, will have a direct and immediate impact on housing costs and timelines.

Trade tensions and tariffs are already contributing economic uncertainty to already higher input costs. CHBA's Q1 HMI survey found that material costs on a typical 2,500-square-foot detached home have increased by $110,000 since the start of 2020. Statistics Canada reports that builder costs, including labour, have risen by 70% over this same period. Thanks to CUSMA, thus far these prices have not been driven up further. Those increases are really not driven by the trade tariffs at this stage, so it could be much worse.

When the government was considering phase two tariffs, CHBA's analysis found that those tariffs would have been far more comprehensive in increasing the cost of construction. Canada's homebuilding industry is particularly exposed through its reliance on imports of construction machinery, appliances, HVAC systems, electrical components, plastics like PVC, and windows and doors. Glass, and metal and wood windows and doors, are identified as large vulnerabilities across the country, and CHBA supported a successful remission request on the window and door imports relative to the steel tariffs, given the exposure in these product categories.

Given the housing affordability and supply crisis, CHBA implores you to recommend that the government maintain stability and predictability whenever possible. Securing an extension of CUSMA with minimal disruption should, of course, be a top priority for the government. Stability supports investments, protects jobs and ensures that housing projects move forward without unnecessary risk.

CHBA also recommends avoiding tariffs on construction inputs, should CUSMA start to fail. During the current trade war, CHBA has consulted with government to avoid applying retaliatory tariffs on building materials. When countermeasures are necessary, they should be carefully targeted to avoid products that are essential to residential construction and products for which alternative supply is limited, as I mentioned previously.

Overall, trade decisions made in this review will directly affect the cost of housing in Canada—and the United States, for that matter—and we encourage the government to explicitly consider housing affordability in its negotiations to assess how any proposed changes would affect building costs and supply.

Thank you, and I look forward to your questions.

[The Chair, Liberal, Judy Sgro]

Thanks, Mr. Lee.

We'll move on to Mr. Sweeney.

[Brendan Sweeney, President and Chief Executive Officer, Pacific Manufacturing Association of Canada]

Good afternoon.

My name is Brendan Sweeney, and I'm the president and CEO of the Pacific Manufacturing Association of Canada, or PMAC. PMAC represents the two largest automotive manufacturers in Canada: Honda and Toyota. Thank you for inviting me to contribute to this important study on trade with the United States.

The tariff-free trade of vehicles with the United States is vital to the competitiveness of PMAC's members. As such, PMAC and its members are urgently seeking, first, the elimination of section 232 tariffs, and second, the renewal of CUSMA. Doing so will help ensure the viability of PMAC members' operations in Canada.

In 2025, PMAC members, Honda and Toyota, assembled more than 938,000 vehicles in Canada. This represents 77% of Canada's total vehicle production. A majority of the vehicles made in Canada by PMAC members today are hybrid electric. They're electrified, and they're hybrid electric. Approximately 85% are exported to the United States, and the remaining vehicles are sold in Canada.

At the moment, there are no other viable markets for vehicles made in Canada that could replace the volume of our members' exports to the United States. PMAC members represent more than 60% of active vehicle assembly plant employees in Canada, and PMAC members have never laid off assembly plant workers in Canada. They operate alongside a Canadian network of more than 40 Japanese tier-one automotive parts manufacturers that supply our members primarily or exclusively. These suppliers employ more than 20,000 people in Canada, or about 30% of Canada's active automotive parts manufacturing workforce.

PMAC members assemble more vehicles in Canada than they sell in Canada. In 2025, that ratio was nearly 3:1. They do so because of competitive advantages when compared to U.S.-based assembly plants that assemble similar vehicles. These competitive advantages are the result of several factors, including higher quality and the productivity of the workforce in Canada, and the efficient and integrated trade networks facilitated by agreements such as CUSMA.

Those competitive advantages have eroded since April 2025. This is a direct result of section 232 tariffs imposed by the United States, which has emphatically stated its intention to reshore vehicle production. Irritants such as import quotas offered to non-market actors and environmental policies that are not aligned with the types of vehicles manufactured in Canada have further eroded competitiveness or risk doing so. If section 232 tariffs remain, those competitive advantages will erode further and, if CUSMA is not renewed, they will erode further still.

While the near-term future of PMAC members' Canadian assembly plants is not in question, their long-term viability is at risk if section 232 tariffs are not eliminated and if CUSMA is not renewed. Conversely, if section 232 tariffs are eliminated and if renewed or updated CUSMA terms are favourable, PMAC members can re-establish competitive advantages, which will support our members' long-term commitments to Canada and the communities in which they operate.

PMAC members are committed to Canada, continue to operate assembly plants at full capacity or above full capacity and have not engaged in layoffs. We hope to see that commitment reciprocated through swift and meaningful action on section 232 tariffs and on CUSMA.

Thank you.

[The Chair, Liberal, Judy Sgro]

Thank you very much, Mr. Sweeney.

We'll move on to Mr. Mantle for six minutes, please.

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

Thank you, Mr. Lee and Mr. Sweeney, for being here. I appreciate your valuable testimony on your industries.

I'll start with you, Mr. Sweeney, with respect to automotives. Last year the Japanese ambassador to Canada said that access to the U.S. market through USMCA or CUSMA was essential—his word—to both current and future investment by Japanese companies. In that same year, Mr. Templin, Toyota's executive VP, said that U.S. tariffs on Canadian autos were unsustainable.

Are both those things as true today as they were in 2025?

[Brendan Sweeney]

PMAC members build where they sell, and that's North America. We assemble vehicles in Canada. About 85% of those go to the United States. Virtually all of the remainder stays in Canada.

This is the result of a competitive manufacturing ecosystem based on integration with the United States. That's why PMAC members are here and that's why they can establish these large-scale operations and these positive 3:1, 2.6:1 and 2.8:1 production-to-sales ratios.

There may be incremental opportunities in markets outside the United States and outside of Canada, but the real opportunities are in the United States and—to the extent of the size of the Canadian market—in Canada, but access to the United States is essential.

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

If the government fails to secure some sort of resolution to the 232s, or is unable to get a favourable outcome on rules of origin, which may be changed, what will happen to the PMAC members—Toyota and Honda—in Canada? Do they have any reason to continue building vehicles in Canada without access to the U.S. market?

[Brendan Sweeney]

For the foreseeable future, the plants are running, and they're running at capacity.

These types of decisions get made seven, eight, nine and 10 years out, and anything that changes the competitiveness and that competitive calculus is going to change decisions that are made—some that are made in Canada and many which are not. That's why in this case we really just want to see a laser focus on section 232 tariffs moving forward.

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

In that vein of long-term investment, did Honda decide to suspend its investments in Canada because Canada no longer has that tariff-free access to the United States?

[Brendan Sweeney]

I don't want to conflate that 232 and the Honda investment, because, as you know, today Honda's plants are running at capacity and, as you know, there were different reasons related to the market. Again, Honda is at capacity—no layoffs—and that's the case for the foreseeable future.

What I think is important is that section 232 tariffs can affect the competitiveness of PMAC members in Canada, and that should be the focus, the primary focus, moving forward.

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

Are you happy with the government's progress to date on that issue for your industry?

[Brendan Sweeney]

I could not tell you one way or another. I'm not privy to what progress is being made in Washington, D.C.

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

The government isn't informing your members of the progress on this issue, which is critical for your industry.

[Brendan Sweeney]

We're having conversations, but I imagine there are conversations happening that—

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

You can't comment.

[Brendan Sweeney]

I've been at it for a month.

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

Mr. Lee, I have just a couple of questions for you on housing from a generation that can't afford to buy homes. It's been like that for a few years. It's only getting worse, it seems, despite assurances to the contrary.

In the opposition, we've proposed a few ideas that we hope might spur some of this.... I want to put them to you and hear your thoughts on whether you think this would help the situation or would not. We propose to cut the GST on all new homes up to $1.3 million, which we think will save about $65,000 for a family. Is that a good idea or not?

[Kevin Lee]

Yes, absolutely, and it's definitely something that we've been asking for as well.

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

The second idea we've proposed is to tie federal infrastructure funding municipally to homebuilding and require municipalities to permit additional homebuilding development each year. What do you think of that?

[Kevin Lee]

Yes, that's also really important and is something that the current government has started.

It's something that for quite some time we've been advocating for. The federal government doesn't have direct access, in many cases, to these issues, but by using the levers they have through investment, they can make a big difference. Those kinds of recommendations are exactly the type of thing that we'd like to see continuing to move forward.

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

Thanks.

In the last few seconds I have, I want to give you this opportunity. What do you say to people, Canadians of my generation, who are trying to get into the housing market and trying to work hard, save their money, buy a home and start a family? What's your message to them as the Home Builders' Association?