International Trade Committee on June 2nd, 2026

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

Thank you.

Now I'll go to Mr. Malinowski. Congratulations on your new position as president and CEO.

Your organization previously stated that CUSMA provides tangible benefits to the U.S. auto sector. I'm going to ask you about some of the strongest examples. However, I also want to ask.... You brought up the $110 billion in costs for automakers and how that has negatively impacted the U.S. auto market—it's not just Canada.

How have they been negatively impacted by this?

[Lucas Malinowski]

Thank you.

The CUSMA agreement has served American auto production well. I'll point out as well that automakers from all over the world produce cars in the United States, both for the U.S. market and the Canadian market. Fifty-five per cent of our auto imports actually came from U.S. manufacturing in 2024. Every year since CUSMA has been in force, the U.S. has enjoyed on average a $2.7-billion trade surplus in auto with Canada. That agreement has served auto manufacturing well in the U.S., as it has served us well in Canada.

Last year, however, U.S. exports of vehicles to Canada were down by about 29%, given the current situation. That is obviously not good for those automakers building in the U.S., of which my members are those OEMs as well. It increases costs for U.S. consumers and car businesses around the world, really. It creates an increasingly difficult environment for U.S. auto production to find new markets beyond its own domestic market.

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

Thank you. I was in your former hometown, Windsor, speaking with the Unifor members, and they were saying that we need to stand strong. We need to be united. We need to be team Canada, because any tariff—be it 5%, 10% or 20%—on autos would really be a hollowing out of our auto sector here. That is what has come from labour. That is, I understand, what is coming from business—that these unjustified, illegal tariffs need to be eliminated.

Is that how you think we should approach the table and be at the table, in Washington?

[Lucas Malinowski]

I think our absolute first priority should be to get back to tariff-free trade on both sides of the border, absolutely.

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

Thank you, Chair.

[The Vice-Chair, Conservative, Adam Chambers]

Monsieur Ste-Marie.

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

Thank you, Mr. Chair.

Ms. Fortin LeFaivre, in response to a question asked earlier, you said that Mexico has potential when it comes to increasing Canadian exports. Does your organization have a specific type of product in mind? Would it be more in the manufacturing sector, or does the resource sector have potential as well? What else could Mexico buy from us?

[Catherine Fortin LeFaivre]

We want to create opportunities for our members to evaluate this for themselves. Certainly, some of our members are already very active in Mexico. Good examples would be TC Energy or Scotiabank. However, we're also focusing on our smaller members who may not have had the chance to evaluate their options yet.

For example, within our local chambers of commerce network, the president and CEO of the Abbotsford Chamber of Commerce joined us on our mission to Mexico in February. She really appreciated being able to connect what her community has to offer with what Mexicans are looking for—whether in aerospace or agriculture, for example.

There are many sectors. So it's up to companies to explore the possibilities. I've mentioned a few of these sectors, but I'm thinking of energy, critical minerals and technology. It's a fairly long list. It seems that, as Canadians, we haven't really examined this issue.

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

Thank you very much.

My next question is for Mr. Malinowski. I'd ask him to answer in under than a minute, since time is running out.

Let's keep talking about Mexico. You said earlier that there must be a trilateral renegotiation of the free trade agreement between Canada, the United States and Mexico for it to work. What is the advantage of having a trilateral agreement rather than separate bilateral agreements?

[Lucas Malinowski]

For the auto industry, it's critical. We're an integrated North American supply chain and value chain, where vehicles are manufactured in all three countries for varying reasons and it supports all three markets. It's critically important that we keep that continually intact and keep North America a competitive manufacturing region for auto.

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

Thank you very much.

Thank you, Mr. Chair.

[The Vice-Chair, Conservative, Adam Chambers]

You're right on time. Thank you very much.

Mr. McKenzie, you have four minutes, followed by Mr. Beech for four minutes.

[David McKenzie, Conservative, Calgary Signal Hill, AB]

Thank you, Mr. Chair.

Mr. Holmes, you've stated that in effect—and please correct me if I don't summarize well—it takes time to get a good deal. Ms. Fortin LeFaivre mentioned that critical minerals and energy are items that need to be looked at.

What I'm curious about is why we haven't been using the time that's passed in the last six months or more. It's been generally discussed that our government has been slow-rolling the discussions with the United States.

That's my opinion, but I wonder if you have any views on what we have missed by way of time and opportunity to have those discussions and get a good deal.

[Matthew Holmes]

Certainly we've seen in the public media the U.S. perception that the Canadian government is taking it slowly. Whether that is by design is hard for me to confirm for you.

I think that at the end of the day, when the United States decides it's ready to negotiate, the Canadian team is ready to go, and I think that's a signal that they've tried to send to the U.S. administration repeatedly. Of course, there were—

[David McKenzie, Conservative, Calgary Signal Hill, AB]

I'm going to interrupt you there. I'm sorry, but it seems to me that the U.S. Trade Representative has said exactly the opposite—that they're ready for negotiations and that they simply haven't heard from the Canadians. That was a couple of weeks ago, but I don't think a great deal has happened, short of Minister LeBlanc's letter today.

[Matthew Holmes]

When you look at Ambassador Greer's testimony in December at Congress, for example, you see that the list he had of items he'd like to discuss with Canada was pretty clear. Most of those were subnational in nature. They weren't a nation-to-nation conversation.

The list with Mexico is much longer. It's considerable, and it's very different in nature. The conversation with Mexico has been under way, clearly. The United States initiated that conversation with Mexico. I don't have the sense...particularly since last fall, when the U.S. administration clearly said they were putting a pause on negotiations. From that point forward, I believe the Prime Minister said that as soon as they're ready to restart, we're ready.

[David McKenzie, Conservative, Calgary Signal Hill, AB]

Yes, I can understand your perspective.

It seems to me that Prime Minister Carney identified some 30-odd trade irritants. I think that was the number put to it.

Isn't it in our best interest to initiate those discussions? Trade irritants are trade irritants. They might have easy solutions or they might have very difficult ones, but we have to be talking about them in order to get to a good deal.

[Matthew Holmes]

Certainly I would argue that all contact and all relations between Canada and the U.S. are positive and important for this trade deal to move forward. I think we have an incredible team in D.C. As well, our chief negotiator, who is relatively newly appointed, brings incredible experience and technical expertise to this—she and her team.

I believe there's no question that we should always do more, but at the end of the day, the nature of the relationship is that it will be the United States that decides when negotiations with Canada really get under way. We have to respond when provided that opportunity, and I hope we will.

[David McKenzie, Conservative, Calgary Signal Hill, AB]

I'm sure you'll respect that I disagree with that. In our own interests, Canada has to push forward and have the conversations and continue to seek the opportunities to do that. Failing to do so is indeed detrimental to our interests.

I hope you can provide a very short response to this: Your members must certainly be concerned with the lack of a negotiated resolution to CUSMA, or a continuation, whatever it may be. They're suffering day by day, are they not?

[Matthew Holmes]

There are parts of certain sectors that are certainly acutely suffering, and that is terrible to see.

At the end of the day, all trade is relative. Canada, as my colleague pointed out, continues to have the best agreement in the world relative to what is happening in global trade at this time. The chaos that is under way in global trade and global supply chains is profound and is likely a paradigm shift that we are living through. Canada is still on the good side of that ledger, although certain sectors, of course, are hurting. We really care for that and care for the government to intervene and support those sectors.

In the meantime, it's important that we maintain the positives of our relationship with the United States. There is so much that happens that we are not talking about that is beneficial and continental in nature and is strong, so we need to build from that.

The trade negotiations themselves are best taken behind closed doors. Again, to my colleagues' reference—

[The Vice-Chair, Conservative, Adam Chambers]

I'm going to have to stop you right there, if that's okay, just to keep us on time. We're a little over. Thank you very much.

Mr. Beech is next.

[Terry Beech, Liberal, Burnaby North—Seymour, BC]

Thank you, Mr. Chair.

Thanks to all the committee members. I'm a guest here. It's my first time at the trade committee, but I did do some briefings on all the work you've been doing on this subject in particular. I appreciate all the work that you guys have been up to. It's also nice to see how many familiar faces are around the table, quite by coincidence.

Thanks to the witnesses.

On your B.C.-based and family-based business, Mr. Zanatta, I really enjoyed reading up about the company.

I hope committee members will forgive me for taking a more B.C.-specific track. Specifically, I'd like to talk to the chamber.

This was raised briefly. British Columbia is the home of the digital supercluster for a reason. We're a hub not just for artificial intelligence, but for software, cloud compute—you mentioned quantum—cybersecurity, fintech, gaming, entertainment and digital services. If we think about the industries that have advanced the most since the last time we were taking on CUSMA, I would say that these industries, and particularly artificial intelligence, are probably the lead candidates.

You mentioned the committee on cybersecurity as a potential opportunity. Could you take us through the opportunities for Canadian companies in this ecosystem and the potential threats, and what we should be taking into account that we might not have been thinking about 12 months ago, never mind five years ago or 10 years ago?

[Catherine Fortin LeFaivre]

Is that in terms of how it would figure in CUSMA or just generally?

[Terry Beech, Liberal, Burnaby North—Seymour, BC]

Strengths, threats or opportunities....

[Catherine Fortin LeFaivre]

The Canadian Chamber has an AI council made up of 30 different organizations of different sizes that are building AI or adopting it at a high pace. Their opinion is always important.

I think there are a variety of views on this from that group. I know that they are very much looking forward to the AI strategy that will be coming out this week so that they can continue their plans in terms of how they grow further in Canada. I think that's an opportunity: where Canada decides to go with its strategy in terms of enabling adoption but also in making sure it has the proper guardrails. I think that's an important opportunity that's coming around the bend.