International Trade Committee on June 2nd, 2026

[Lucas Malinowski, President and Chief Executive Officer, Global Automakers of Canada]

My thanks to the chair and the members of the committee for the opportunity to appear before you as part of this important study on Canada and the forthcoming CUSMA review on behalf of the Global Automakers of Canada.

Our association represents 15 of the world's leading automakers in the Canadian market, accounting for over 60% of new vehicle sales. Collectively, they employ over 110,000 people from coast to coast to coast in vehicle assembly plants, dealerships, national and regional offices, as well as captive finance companies and transportation and logistics facilities. The activities of Global Automakers' members directly support over 100,000 additional jobs across the country and contribute nearly $25 billion annually to Canada's GDP.

As you know, Canada's automotive industry is currently undergoing a period of significant upheaval and change, not only from trade disruptions but also from constant changes in vehicle environmental policy during the generational transition to electrified vehicles. As I'm sure the committee is also well aware, the industry is currently facing significant challenges resulting from automotive tariffs on both sides of the Canada-U.S. border.

American tariffs have resulted in nearly $110 billion in increased costs for automakers across North America over the past year. On the Canadian side, the Department of Finance has collected nearly $400 million in surtax revenue since Canadian countertariffs have come into force. This has resulted in increased costs for Canadian drivers and, in some cases, reduced choice. To that point, automakers also need clarity on the government's proposed changes to the automotive remissions framework as soon as possible.

Most importantly, we need the immediate removal of automotive tariffs on both sides of the border.

Heading into the CUSMA review, we have also heard concerns from American contacts on the Government of Canada's decision to accept a limited number of Chinese-built electrified vehicles into the Canadian market. While our members welcome fair competition on a level playing field, the government has not provided much clarity on how it will ensure that everyone is playing by the same rules. I will also point out that the import quota does not apply to Chinese-made internal combustion vehicles.

It will be important for the government to make clear to the U.S. what the intended goals of this policy change are and to be clear-eyed about how it may impact our negotiations going forward. While we may not be able to control the implementation of American section 232 tariffs on cars, there are choices we can make here in Canada to reduce the burden on automakers.

First, as the government is working to develop new greenhouse gas regulations for vehicles and repeal the federal EV mandate, we have to ensure that those regulations are achievable and give automakers sufficient time to adapt to them.

Second, British Columbia's and Quebec's EV sales mandates continue to be a frustrating regulatory and cost irritant for automakers. They are significant interprovincial trade barriers that should be stood down to allow the federal government to regulate vehicle emissions nationally. It makes no sense that a vehicle that can be legally sold in New Brunswick or Alberta could carry a significant penalty for an automaker selling that same vehicle in a neighbouring province.

Finally, as Canada seeks to diversify its trading relationships and reduce its dependency on the U.S., we need to ensure that we are treating those other global partners fairly. The government recently removed the luxury tax on boats and planes, but it has remained on vehicles. The tax disproportionately impacts imports from our European allies and is a trade irritant with the European Union. At the very least, the government should exempt EVs from the tax to support our electrification goals and adjust the original $100,000 threshold for inflation.

Thank you again for the opportunity to appear before the committee. I do look forward to all your questions.

[The Vice-Chair, Conservative, Adam Chambers]

Thank you very much.

Mr. Zanatta and Mr. Witowich, you have five minutes to split between you however you like.

[Troy Zanatta, President, Restwell Sleep Products]

Thank you, Mr. Chair and members of the committee, for this opportunity to speak to you.

Tom and I represent the mattress industry here in Canada. It's a $2.75-billion industry at retail here in Canada.

Thirty years ago, the majority of the mattresses manufactured were produced here in Canada. Today, close to 50% of all mattresses sold in Canada come into the country from outside; they're not manufactured here in Canada. We believe that this is an industry that should be looked at and that should be protected. AI is something that is not going to take over manufacturing mattresses. Mattresses are a handcrafted, handmade product, and it will be decades before AI will be able to take over. We believe that it's an industry that should be looked at and reviewed when it comes to product being dumped into Canada.

Tom, do you have something you want to add?

[Tom Witowich, Controller, Restwell Sleep Products]

No, Troy, I think you hit all of our points. Roughly 50% to 60% of mattresses in Canada are being imported from other countries.

Restwell has been part of an anti-dumping case in the past where there was injury to the domestic industry. We believe that is still the case today.

[The Vice-Chair, Conservative, Adam Chambers]

Thank you very much. I appreciate the opening statements.

This is now time for members' questions. The first round, if you'll recall, is six minutes for each party.

Ms. Borrelli, I'll pass it over to you.

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

Thank you, Chair.

I sit on the industry committee. Recently, we did an emergency study in regard to the 232 tariffs that changed on April 6. During that study, I had the opportunity to question the CEO of the Windsor Essex Chamber of Commerce, Ryan Donally. He stated that a good tariff deal was needed immediately, and that it was of supreme importance in regard to our businesses continuing the way they have been.

May I ask you your opinion on that?

[Matthew Holmes]

Certainly. Thank you for the question.

The sooner we can get a trade deal, the better, clearly. Certainty is what business is looking for. Our Canadian Chamber of Commerce's business data lab issued a new report just last week that looked at the cities in the country by CMA, census metropolitan area.

Those that have had the most negative response in light of the last year of tariffs are certainly the areas of Windsor, Kitchener, Waterloo and London. Those concentrations have a strong alignment with the auto sector and are the most embedded and the most integrated economies with the United States. They are feeling the pressures most acutely, and that is harming them at the community level in terms of jobs. It's quite real.

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

Would you say, then, that a good trade deal soon would be imperative for their survival and for their operations?

[Matthew Holmes]

I would say that a good trade deal soon is the ideal that we should be working towards, but it's questionable whether a good trade deal can be reached immediately.

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

In addition to the problems with the 232 tariffs, the aluminum industries across Canada and particularly the aluminum extruders are having extreme problems right now because of government inaction on helping them out with the dumping that's occurring.

I'm sure you have members who are aluminum extrusion companies. They want to know why aluminum isn't being treated the same as steel in regard to dumping regulations. Do you have any comment on that?

[Matthew Holmes]

I think the global aluminum industry right now is facing a cascade of shocks. There's a price shock and a supply shock, and the Strait of Hormuz has certainly not helped.

Globally speaking, it is an industry that is really encountering quite a problematic environment. For our Canadian sector, we're certainly hearing an increasing need for safeguard investigations under the International Trade Tribunal. We need to make sure that we are not becoming a diversion market, and that is something that the government does need to take seriously—absolutely.

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

Thank you so much.

I also have questions for Mr. Malinowski.

In places like Windsor, Ontario, people don't experience industrial policy through announcements. They experience it through shifts being cancelled, through plants closing, through companies moving production across the border and the uncertainty that the government continues to perpetuate because of their lack of action on negotiating tariffs.

If Chinese EVs continue to flood the Canadian market, what will this signal for the workers whose livelihoods depend on a North American supply chain and Canadian manufacturing? What will it signal to them?

[Lucas Malinowski]

Thank you for the question, MP Borrelli.

Windsor holds a special place in my heart. It's the community I first lived in when my family immigrated to Canada from Poland. I'll always have a fond place for Windsor in my heart.

You're absolutely right. For the workers in those factories, in those suppliers and in those supply chains, having certainty that the shift will be there for you tomorrow and you'll be able to keep building world-class vehicles in your community is critically important.

The challenge for the industry with the government's current approach on Chinese EVs is the significant question mark it puts on the Canadian market until we have a clearer understanding of the guidelines. We saw just yesterday that the first vehicles to be permitted into Canada under that quota were reported by Global Affairs. I think it was just under 3,000 Teslas, mostly, manufactured in Shanghai and coming to the Canadian market.

What does that market look like in the future? Do you invest strongly in the Canadian market as either a manufacturer or an importer in the future if you're not going to be sure that you can compete on a level playing field with a significant influx of new market entrants who may not have the same labour costs, input costs and all those other things that go into building a car?

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

What do you imagine could be the long-term consequences for your members?

[Lucas Malinowski]

It's difficult to speculate on how one single policy item will impact the future of the industry, because all these things are so interrelated. Between new market entrants, ongoing tariffs with the U.S. and rapidly changing vehicle emissions policies, all those things impact in their own unique way, but I think that in the future, if we continue to have increased costs and increased uncertainty, the Canadian automotive market is likely to shrink overall and certainly for the OEMs that are in the market right now.

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

Thank you—

[The Vice-Chair, Conservative, Adam Chambers]

Thank you very much. That's the time on our round.

Madame Lapointe is next.

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

Thank you, Mr. Chair.

I would like to thank the witnesses for their very interesting testimony.

I will first address Ms. Fortin LeFaivre and Mr. Holmes from the Canadian Chamber of Commerce.

Earlier, you said we should have strategic diversification measures. You mentioned the European Union and Japan, among others. I would like to hear from you which other countries we should consider in order to reduce our vulnerability to the United States.

[Catherine Fortin LeFaivre]

There are many interesting places we should explore. The Canadian Chamber of Commerce has looked into certain regions. Obviously, it can't be everywhere, so it's working with the government to explore Mexico further, for example. We see this as low-hanging fruit, so to speak, for the future—an area where we haven't invested as much as we should have.

There are many good reasons why Mexico is a good partner. First, it's a party to the agreement. We're on the same continent, so travel times are shorter. It's also less expensive for some businesses to travel to Mexico and explore its opportunities, compared to travelling overseas or to Asia, for example. This is an important point, especially for small and medium-sized businesses. For small businesses just starting to explore export opportunities, being able to travel somewhere without it costing $20,000 is a significant advantage. There are also many complementary markets, whether in agriculture, technology or aerospace. If we look at Mexico's plan, called Plan México, and its priorities, we see there are many opportunities compatible with what we can offer. That's just one example.

Of course, we encourage companies to work with countries that are aligned with us, that view democracy the same way we do, and that also have many complementary markets. There are many examples within the G7, including Germany, for instance. At the Canadian Chamber of Commerce, we really prioritize G7 countries in Europe, Mexico and certain countries in the Indo-Pacific region. We hope that, as we see growing interest among our members in exporting, we will be able to expand our international team to help them achieve their goals.

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

Thank you very much.

Mr. Malinowski, earlier you mentioned electric vehicles. There is an issue that arises when people from British Columbia or Quebec decide to buy a vehicle elsewhere, for example in New Brunswick. I would like you to provide us with more details on this. As you know, in Quebec and British Columbia, we believe that the electrification of transportation is important.

[Lucas Malinowski]

Thank you for the question. I apologize for my response in English.

Electrifying the fleet is absolutely important. Automakers are committed to making the transition to more electric vehicles. We have record numbers of EV models on the market. We've had significant investments from automakers around the world in EV technology and in bringing more EVs to the market.

The challenge, specifically with the provincial mandates in Quebec and British Columbia, is that they can carry significant penalties for failing to meet the targets. They are sales-based; they're not technology-based. A certain proportion of your sales need to be of electric vehicles. If you don't meet that, you can face significant penalties, which obviously increases the cost of doing business in those jurisdictions.

Alternatively, you could purchase credits from other companies, ones that primarily sell EVs. If we have a situation now where we also have new market entrants coming into Canada with EV products, they can also generate additional revenues by selling credits to existing automakers for selling EVs in, say, the British Columbia or Quebec markets. In effect, it's a double subsidy for those vehicles. That's part of the challenge we have.

There's also nothing to stop a driver from Quebec from going across the border to New Brunswick, purchasing a vehicle with an internal combustion engine and bringing it back into Quebec. The dealer in Quebec doesn't capture that value. It gets captured in a neighbouring province. The same goes for British Columbia and Alberta.

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

Thank you.

I would like to ask Mr. Zanatta or Mr. Witowich a question.

You said that, in the past, 80% of mattresses were made in Canada. Now, 56% of mattresses come from outside the country.

Where are they coming from? Why is the market flooded with mattresses from abroad?

[Troy Zanatta]

The mattresses are coming from countries such as China, Vietnam and Turkey. They're being dumped. We were actually part of an anti-dumping suit that went on about five years ago. It focused mostly on China.

There were some tariffs put on mattresses that were coming in from China. Since then, the mattresses coming into the country have shifted to other countries. The buyers of these mattresses have found other countries to produce these mattresses and bring them into the country.

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

Are we talking about mattresses shipped in a box, since they aren't spring mattresses or ones with a wooden frame?

[Troy Zanatta]

The mattresses that are coming in are both spring-filled mattresses and foam mattresses. They are able to compress the mattresses, put them into boxes and ship them to Canada. Yes, that's correct.

Having said that, most large Canadian mattress manufacturers, including us, also have the capability of compressing mattresses and putting them into boxes.