International Trade Committee on June 2nd, 2026

[Joseph Maloney]

Yes, absolutely.

We're an international union. Our parent is headquartered in Kansas City. We have, as I said, approximately 12,000 members here in Canada. There are about 30,000 in the United States. Those numbers may seem low in the bigger picture, but we are a highly skilled trade. It's a four-year apprenticeship program, as I explained, and we are comprised of boilermakers who put the mechanics together and the high-pressure welders who weld them together. We work very closely with our brothers and sisters in the United States. That's why, when we run short of people here—just like when they run short of people there—we'd like to be able to tap into each other's resources. We know that we're getting the same compatible skills that are required in each country because we train to the same apprenticeship standards.

[Gabriel Ste-Marie, Bloc, Joliette—Manawan, QC]

Thank you.

I believe the U.S. President’s tariffs are illegal. They're hurting our economy, and I think they're hurting the U.S. economy as well. I think a good way to increase the pressure is to call on our counterparts in the United States to put pressure on the U.S. government—which, unfortunately, doesn't seem to be listening much to the government here—to eliminate these tariffs.

Let's hope that workers continue to stand together.

[The Vice-Chair, Conservative, Adam Chambers]

Ms. Borrelli, you'll have four minutes, as will Mr. Ehsassi, to round out this panel.

[Kathy Borrelli, Conservative, Windsor—Tecumseh—Lakeshore, ON]

Thank you, Chair.

Welcome to all of our witnesses today.

A trade deal with the United States is critical to my community of Windsor—Tecumseh—Lakeshore. With the government's inaction to have a meaningful trade negotiation for over six months now, my community and the industries around it are facing uncertainty and are being forced to make decisions about their future in Canada.

How important, Ms. Malone, is a trade deal with the United States, and what risk does it pose to your dealers if a deal is not reached immediately?

[Nancy Malone]

It's very important to work with our closest trading partner. If there is no agreement reached, or if CUSMA is.... My understanding is that it continues. It takes a little while for it to unwind. It would be very difficult in terms of just re-establishing how to move equipment back and forth across the border.

Unfortunately, the likelihood is that some dealers would be downsizing a bit. They wouldn't have as many locations, which would impact service for customers, and that sort of thing. However, equipment is necessary for our agricultural community. It will come. It just would be potentially more expensive. As I say, the downstream impacts of service might take a little longer, and that sort of thing. It would not stop on a dime, but it would certainly become more challenging in terms of delivering the services that we deliver today.

[Kathy Borrelli, Conservative, Windsor—Tecumseh—Lakeshore, ON]

I imagine that, for your dealers, it would be very difficult to give them quotes on equipment that they may be ordering with the uncertainty that exists right now.

[Nancy Malone]

Right now, it's okay because there are no countertariffs. In terms of pricing of equipment, that's in the manufacturers' hands, and that is a global question in terms of where they are purchasing their steel and their aluminum; however, they have remained fairly consistent in terms of their pricing strategies.

Unfortunately, that doesn't mean they're going down, but they are they are staying consistent with how they approach that. Quoting machines is still straightforward right now. A year ago, when there really was that uncertainty of if we were going to have to charge an extra 25%, that was problematic, for sure.

[Kathy Borrelli, Conservative, Windsor—Tecumseh—Lakeshore, ON]

Okay, thank you.

Recently, the 232 tariffs were changed on steel and aluminum products. Because your manufacturer is in the United States, they are probably depending on some moulds from our Canadian suppliers. I'm wondering how that may have impacted the production or the pricing of this machinery.

[Nancy Malone]

In terms of the Canadian steel and aluminum content, I'm afraid I'm not sure what the percentages would be. It certainly impacted our Canadian manufacturing sector for ag equipment in that they're exporting the equipment across the border, and those 232 tariffs were a big hit. This morning, I believe the president brought that down a little bit.

[Kathy Borrelli, Conservative, Windsor—Tecumseh—Lakeshore, ON]

Oh, I didn't hear that.

[Nancy Malone]

Yes, I just learned it as I walked in. That will be a little bit of breathing room. For my dealers specifically, the 232 tariffs were also impacting when we would sell used equipment into the United States, and that created a bit of a barrier in terms of that market of moving used equipment.

If a piece of machinery is being manufactured in the U.S., they are sourcing their raw materials from around the world and there are tariffs on those raw materials, 232 or otherwise, the end product ends up being more expensive.

[The Vice-Chair, Conservative, Adam Chambers]

Thank you very much.

We're going to go to our final questioner, Mr. Ehsassi.

[Ali Ehsassi, Liberal, Willowdale, ON]

Thank you very much, Mr. Chair.

Thank you also to the witnesses. It's great to see you and great to hear from you.

Madam Malone, we've had the opportunity to speak. As you know, our government really values your perspective and your expertise. I was wondering if I could pick up on Mr. McKenzie's question and Madam Borrelli's.

As you've indicated, most of the manufactured goods we import are from the U.S.; that's where they're manufactured. You also said that these manufacturers obviously do have inputs that come from around the world, but steel and aluminum are, I would assume, big components in that.

Am I correct that you said that so far what you have seen is that prices have remained stable for imports that are coming to Canada?

[Nancy Malone]

The larger manufacturers have a very wide variety of machines and equipment families, and the prices are all a little different. What they have tried to do is, rather than put all of the tariff or the price increases onto one machine, smooth that out across the families of machines across the world.

They've been able to do that successfully so far. I believe they're coming to the end of that path and they're not going to be able to do that as successfully. With the tariffs and the costs of manufacturing, they're going to have to start recouping some of those expenses. It might land entirely on agricultural equipment, but there's also construction equipment, forestry and road-building equipment. Again, it depends on the manufacturer and what their product family is.

[Ali Ehsassi, Liberal, Willowdale, ON]

What are your estimates going forward?

[Nancy Malone]

In normal times or usual times, a price increase of 2% or 3% per year is acceptable. We don't know whether it would go beyond that at this point.

[Ali Ehsassi, Liberal, Willowdale, ON]

But you suspect that it will.

[Nancy Malone]

It could. As I said, if they can't sort out the current complexities of the U.S. trade negotiations around the world, then it becomes very difficult for manufacturers to plan and diversify their own suppliers, so it wouldn't be surprising to see higher price increases. For the moment, I believe that they've been able to hold the line in terms of not doing anything too excessive.

[Ali Ehsassi, Liberal, Willowdale, ON]

As you can imagine, your sector is integral to our food security. You did touch on it in your opening remarks, but would you like to elaborate on that just so every member here fully appreciates the significance of your sector?

[Nancy Malone]

Sure. Early on, last year when the tariffs began and the countertariff conversations were happening, our message to officials was that there was a lot of focus on farmers and producers, and food moving back and forth, that sort of thing. We had to remind everybody. Guess what? Our dealers are the ones in there helping the farmers plant their crops, take care of them, harvest them, move them into market, that sort of thing. We feel we are fairly integral in that sense—we are the tools that the farmers use to feed the world. We are a very large employer as well, a very large supporter of rural communities—names on hockey rinks, supporting teams in the community, that sort of thing. That's why we say we're often forgotten in the grand scheme of things. We appreciate the ability to deliver that message and educate a little bit about the types of machinery and technology, and the jobs that are out there that our dealers are providing.

[The Vice-Chair, Conservative, Adam Chambers]

Thank you very much.

We appreciate the testimony today from our witnesses. Thank you for your appearance. If there are any follow-up questions, then members can feel free to contact you directly, or you can send your comments to the clerk or the chair, and we can distribute them to committee members.

We will have a brief suspension while we get our second panel ready.

[The Vice-Chair, Conservative, Adam Chambers]

I call this meeting back to order.

Thank you to our witnesses for appearing.

We have with us three witnesses today. From the Canadian Chamber of Commerce, we have Matthew Holmes and Catherine Fortin Lefaivre. From the Global Automakers of Canada, we have Lucas Malinowski, president and CEO. From Restwell Sleep Products, we have Troy Zanatta and Tom Witowich.

Welcome to our witnesses. Each group will have five minutes for opening statements.

We will have opening statements from the three organizations. We will start with Mr. Holmes and Ms. Fortin Lefaivre.

You have the floor for five minutes.

[Matthew Holmes, Executive Vice-President, International and Chief of Public Policy, Canadian Chamber of Commerce]

Thank you, Mr. Chair and members of the committee.

Good afternoon.

Thank you very much for the opportunity to appear.

It's a great pleasure for the Canadian Chamber of Commerce to return to the Standing Committee on International Trade to provide further comments on the 2026 CUSMA joint review.

Today, I will split my time with my colleague Catherine Fortin-LeFaivre, the senior vice-president of international policy and global partnerships at the Canadian Chamber.

When the Canadian Chamber appeared last fall, we shared insights from our extensive member consultations on the CUSMA review, reflecting businesses of all sizes and sectors from across the country, plus numerous North American partner organizations with which we work. This important member and partner feedback formed the basis for our official submission on the CUSMA review to Global Affairs Canada, the United States Trade Representative and Mexico's Secretaría de Economía.

After a year of new tariffs and repeated trade disruptions, most firms are still adapting cautiously. While exports to non-U.S. markets are up by 17%, this is driven by existing exporters selling more, not by new firms entering global markets, which have only grown by 6%.

Most businesses are not fundamentally changing course. The most common response to market pressures remains raising prices or delaying decisions, rather than diversifying markets or supply chains, which takes time and investment.

In fact, CUSMA utilization is at a 20-year high, underscoring its importance. From the Canadian business community's perspective, the priority remains extending and enhancing North American competitiveness.

Therefore, our recommendations regarding the CUSMA joint review remain the same today and can be summarized in three key points: prioritize the continuity of the agreement and its existing key provisions; implement targeted measures to strengthen the agreement and enhance North American economic security; and strengthen North American economic integration by reducing or eliminating recently imposed tariffs within North America, such as the 232 tariffs.

The Canadian Chamber continues to reassert that, given the uniquely integrated nature of North American economic and commercial ties, our close proximity and extensive trade flows, Canada, the U.S. and Mexico share a common interest in CUSMA that strengthens North American economic growth, prosperity and competitiveness. Our counterparts in Mexico and the U.S. share this view.

[Catherine Fortin LeFaivre, Senior Vice-President, International Policy and Global Partnerships, Canadian Chamber of Commerce]

Good afternoon.

As we get closer to the official review date of July 1, 2026, Canada must be careful to differentiate signal from noise, because the noise will only get louder and the pressure to get a deal will only increase. Public positioning and efforts to build negotiating leverage are to be expected by each of the three parties.

During this time, we will need to trust Team Canada and our expert negotiators to do their jobs behind closed doors. It will be appropriate for some information to be shared in public, but not all, and that's okay.

Moreover, it's important to remember these key facts. Canada still has the best deal in the world with the United States, whereby approximately 85% of its goods are being traded tariff-free. Contrary to frequent misconceptions, CUSMA does not expire or sunset on July 1, 2026, if no agreement is reached between the three parties. While our economies understandably seek certainty as quickly as possible, the runway to renewing this important agreement is in reality longer than a few weeks.

Based on Ambassador Greer's public remarks, we expect the United States will opt to start an annual review, which could last up to 10 years. While this scenario isn't as desirable as a quick rubber-stamping, it does mean the agreement continues to be in force until at least 2036.

What's urgent in the immediate term is for Canadian firms impacted by section 232 tariffs, those in the aluminum, steel, copper, softwood lumber and auto parts sectors, to see relief. We urge the Canadian government to prioritize their removal or reduction. We note that the recent changes to 232 derivatives are especially problematic for not only the originally impacted sectors but now also the downstream firms.

While 232s are not officially part of the CUSMA review, there's ample reason to believe that such actions are intertwined. However, Canada cannot wait for the CUSMA review to play out to resolve this issue.

Moreover, the Canadian Chamber of Commerce maintains that, during its pursuit of a renewed CUSMA, Canada must in parallel continue to implement a variety of strategic measures to diversify our nation's trade globally.

We do not believe that the two are mutually exclusive.

The Canadian Chamber is undertaking a number of initiatives to support this national priority of trade diversification, including leading missions to target markets such as Mexico, the EU and Japan, advocating for increased export support for SMEs and tangibly enhancing its collaborations with Canadian chambers and other local business partners abroad.

We look forward to continuing to engage with this committee on CUSMA and other trade matters.

Thank you.

[The Vice-Chair, Conservative, Adam Chambers]

Thank you very much.

Mr. Malinowski, you have the floor.