International Trade Committee on June 2nd, 2026

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

It's important that people listening to us understand this. If they want to support the Canadian economy, they need to be careful where they buy their mattress. That's my message to those listening to us.

[The Vice-Chair, Conservative, Adam Chambers]

Thank you very much.

Mr. Ste‑Marie.

[Troy Zanatta]

We're not looking for unfair trade practices or favourable purchasing from us. We're more concerned about the fact that the product is being built and dumped into Canada at prices, in many cases, lower than the actual cost of producing the mattress. We're not competing in a fair market because these products are being dumped into the country.

[The Vice-Chair, Conservative, Adam Chambers]

Thank you very much, sir.

Mr. Ste-Marie.

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

Thank you, Mr. Chair.

Good day to our witnesses and I want to thank them for joining us.

My first questions will be directed to the representatives of the Canadian Chamber of Commerce.

Thank you for reminding us in your presentation that we'll hear a lot of noise in the coming weeks, as is already the case, and that, even if it hasn't been renegotiated by July 1, CUSMA will continue to apply. Rather, it is a review of the various parts.

CUSMA is a good agreement. The problem is that the U.S. President has failed to respect it by imposing tariffs that are, in my view, illegal in several sectors, including the automotive industry, steel and aluminum.

During his first term, he imposed illegal tariffs on steel and aluminum. If I recall correctly, your sister organization, the U.S. Chamber of Commerce, had sought to challenge these tariffs in court. It dropped the lawsuit upon the ratification of CUSMA, which replaced the North American Free Trade Agreement, because the president was no longer imposing those tariffs. In his second term, he reactivated this clause.

Are you still on good terms and do you still have a good relationship with your sister organization, the U.S. Chamber of Commerce? Have you heard whether it intends to reactivate this lawsuit challenging the illegal tariffs?

[Matthew Holmes]

Thank you for the question and your recollection of the first time we went through this.

The U.S. Chamber of Commerce is a close sister organization we maintain regular contact with. I will say they have been one of the earliest and most unequivocal voices in the United States business community against the current tariff regime, whether that's the IEEPA broad-based tariffs or the section 232 tariffs. They've spoken convincingly of the impact directly on small businesses, in particular, and on the entire integrated supply chain and economy, and how beneficial that is for the United States' consumers and businesses.

On the question of possible litigation against the administration, I don't have any particular knowledge of that at this time. It's not something we've discussed recently. They have a very robust litigation practice and, in their history, have repeatedly and successfully brought their government to the right side of the law. We may have a faint hope there, but I believe the pressure right now is on getting to a closed-door negotiation where some of the section 232 issues can be addressed. I would say that the last time NAFTA was being renegotiated and became what is now CUSMA, it was that process that led to the section 232 tariffs being removed.

We've seen that work once before and my hope would be that at the negotiation table, we can reach a long-standing clear agreement.

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

Thank you very much for your very clear response.

I completely agree with you, and I believe there is unanimous agreement here, as in most organizations in the United States.

However, I have one concern: Can we really renegotiate a new agreement with the U.S. President, who isn't even honouring the current agreement and is exploiting all the loopholes we have identified so far?

In my opinion, what he's doing is clearly illegal. One approach I favour would be for entities in the United States—whether individuals, companies or groups—to tell the president that what he's doing isn't legal and to try to overturn it. That's what we saw with the broad tariffs that were applied more to the rest of the world. That's what the U.S. Chamber of Commerce did during the Trump administration's first term.

I'll come back to ask you questions about the executive order from early April on how to calculate tariffs on steel and aluminum. Before that, I'd like to ask Mr. Malinowski some questions.

You and your sister organization in the United States obviously work together. So, can you confirm that the U.S. organization is putting pressure on the U.S. government? Has it considered taking legal action against the government regarding tariffs in the automotive industry?

[Lucas Malinowski]

We are absolutely in regular contact with our sister associations both in the U.S. and Mexico as we go through this CUSMA review process.

All automotive associations in the United States, across all automakers, have recently written directly to the U.S. Trade Representative's office to make clear the importance of maintaining a trilateral agreement among Canada, the U.S. and Mexico, and how critical that is to the integrated North American auto market. Multiple companies have made deputations to the USTR hearings going into the CUSMA review, stressing the importance of the agreement and getting back to tariff-free trade.

In terms of any litigation, I can't speak to that. It's not something I'm privy to, unfortunately.

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

Thank you very much.

I will address the representatives of the Canadian Chamber of Commerce again.

How are your members affected by the order issued in early April, even though a new order was issued yesterday stating that, for certain sectors, the rate could be 15% rather than 25%? Do they have a full understanding of this now?

[Matthew Holmes]

We like to approach these things day by day, and, thankfully, the administration gives us that opportunity.

[Voices]

Oh, oh!

[Matthew Holmes]

In April, the executive order came into effect. In May, the Canadian government provided some relief measures for businesses that were, we understand, welcome and had some positive effects for certain businesses. To be perfectly honest, we are still reviewing yesterday's adjustment to the executive order. We're hearing from some members who see it as a net positive for their current position, but other members will be negatively affected.

It has so many conditions, to be perfectly honest, and so much conditionality that it says to me, standing back, that it's less about whether it is good or bad for Canadian business. It says to me that there is a clear pressure building within the U.S. business community—in agriculture, construction and some manufacturing sectors. They are clearly saying to the administration, “This is getting bad, prices are going up and we need you to address this for us.” Part of the way to address it is reducing tariffs.

If that message is starting to get through from the business community—to your earlier line of questioning—the most effective voice for us will be the U.S. business community saying in the U.S., “No, this doesn't work for us.”

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

Thank you.

[The Vice-Chair, Conservative, Adam Chambers]

Go ahead, Mr. Lawrence.

[Philip Lawrence, Conservative, Northumberland—Clarke, ON]

Thank you.

I'll start with you, Mr. Malinowski.

When I talk to some of your members—who are some of the largest auto manufacturers in Canada, whether they be Japanese or North American—I nearly always get the same response when I ask, how are things? They say it's okay for now. That's very scary terminology because it means it's okay for now, but in the near future, or at any point in the future, it could mean the loss—as we've already started to see—of thousands of Canadian jobs.

Is it not time to start raising the red flag that this is a huge issue and the government actually needs to start taking it seriously?

[Lucas Malinowski]

“Okay for now”, I think, is our motto at the moment internally. I would say that the government is taking it rather seriously. As some of the conversation previously has indicated, at the end of the day, the decision is with the White House.

You're absolutely right: We need to get to a deal. We need to get back to tariff-free trade as soon as possible. The costs are mounting and, frankly, astronomical, on both sides of the border. They're not sustainable for automakers in the medium or long term and, potentially, even more so in the short term. I think everyone in the industry is taking that seriously.

We speak to the government and, obviously, opposition members on a regular basis, and we will keep you updated on how things stand with the continued urgent need for a resolution.

[Philip Lawrence, Conservative, Northumberland—Clarke, ON]

Thank you.

Another threat to your industry, in addition to tariffs, is also the access given to Chinese EVs. The challenge here is something that I'm not sure everyone is fully aware of how it works.

There's no such thing as fair trade with a Chinese business because they are all state-owned enterprises. This means that any EV company in China has access to nation-state resources, a nation-state with over a billion people and trillions of dollars. To somehow suggest that it is fair or there's going to be fair competition with Chinese auto manufacturers, or any other type of manufacturer, is simply not true.

Would you support my assertion on this, or tell me how I'm wrong?

[Lucas Malinowski]

Our members are happy and willing to compete with any automaker anywhere in the world on a level playing field. As you say, there are certainly significant questions about whether some of the new market entrants looking to come into Canada can commit to a level playing field, and what kind of policy suite the Government of Canada can put in place to ensure a level playing field and to ensure those automakers are held to the same standards as everyone else in the market right now—whether that be via various MOUs to support consumers, ensuring that they are operating through a dealer network or requiring that they provide parts for after-sales support and service for a significant amount of time.

These are all important questions that we need answered. We don't have a lot of clarity on them right now, and it's important that we get it.

That said, I think your point is absolutely fair and valid. There are significant questions about the level of state subsidy for Chinese OEMs, the nature of their supply chain and whether established and other existing automakers in the Canadian market could compete with them.

[Philip Lawrence, Conservative, Northumberland—Clarke, ON]

Thank you.

Mr. Malinowski, not to be too negative, but I think it's important that we face reality. Some pundits out there, some commentators, have said that, without relief, without the elimination of these tariffs, without protection from unfair competition from China or elsewhere, our auto industry could be gone within a decade. Is that possible?

[Lucas Malinowski]

I will say that automakers are deeply committed to the Canadian market, and they have been here for decades. They are resilient. They are responsive to shifting tides and challenges. They will continue to be committed to the Canadian market for as long as they possibly can, but at the end of the day, they are businesses and they need to make money. Certainly, there can be a breaking point on that at some point down the road, and I hope we all avoid that.

[Philip Lawrence, Conservative, Northumberland—Clarke, ON]

Thank you.

I'll put the last question to the Chamber of Commerce.

Mr. Holmes, you stated that we may not have a change in CUSMA until 2036. Quite frankly, that is not what I'm hearing from your members. They're concerned. I find that this laissez-faire attitude would be challenging, and if I were a member, I'd be pretty upset. Don't you think that we should be worried about the potential renegotiation of CUSMA, given the challenges that we face from the U.S. administration?

[Matthew Holmes]

To clarify, we said that what happens on July 1 is the automatic move into a 10-year phase to 2036. We hope that it's more like a 12-month period or shorter in which to get a good deal.

The question I would ask the room here is at what cost a deal is going to be struck sooner than that. That is the challenge that our negotiation team faces right now on behalf of Canada. If we get a bad deal and lock that in for 16 years, it could be far worse than taking the next few months to make sure that we have a good and well-thought-out deal.

[The Vice-Chair, Conservative, Adam Chambers]

Thank you very much.

Go ahead, Mr. Fonseca.

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

Thank you to our witnesses, and thank you for your testimony. The testimony that you provide here today—and that of the many witnesses who have come before us—reinforces in a positive way the approach that we have been taking towards NAFTA, CUSMA and this review. That gives us a team Canada approach. It gives us the leverage that we need at the table when we are in Washington.

Actually, in breaking news today, Minister LeBlanc wrote to his counterparts, Ambassador Greer and Secretary Ebrard, signalling our review. Why? He says that it's because NAFTA has served us well for 32 years, all three partners, in terms of what it's done for our economies, for our people and for our quality of life. Now, we are looking forward to the next 16 years.

My question first will go to Mr. Holmes and Ms. Fortin LeFaivre.

What would define a successful review, from the business community's perspective, on CUSMA?

[Catherine Fortin LeFaivre]

The timing is important. As my colleague Mr. Holmes said, we want to make sure we go through it as quickly as possible but not sign up for a bad deal.

There are a few chapters in particular that could be strengthened. A good example is the digital chapter. When it was first adopted in 2016, technology was in a very different place. If you look at it right now, it's a very short chapter. It doesn't mention very many new technologies like quantum or AI. There's an opportunity there for our three countries, for instance, to do a lot more.

Cybersecurity is a really great example. Between 2016 and now, cybersecurity has only become a bigger problem. We're all facing it. There was a mention in that chapter, for example, that there would be a committee struck that could coordinate the work of all three countries. That never happened. There's a great example of where we could actually do more to make sure that our economies are protected from bad actors from other countries or elsewhere.

There are a lot of examples like that. Critical minerals is another one. There isn't a chapter on critical minerals. Should there be? That's up for debate, but certainly there are more opportunities for collaboration there. There's no shortage of different avenues, including energy, where we could further enhance our collaboration. That needs to be looked at.