International Trade Committee on June 9th, 2026

[The Chair, Liberal, Judy Sgro]

Thank you very much.

I'm going to reduce it down to five minutes so that we can try to give everybody—or at least some members—a chance.

Mr. Davidson, go ahead please, for five minutes.

[Scot Davidson, Conservative, New Tecumseth—Gwillimbury, ON]

Thank you, Madam Chair.

Thank you, Mr. Sweeney. I'm going to try to get in as many questions as I can.

The Liberal government announced the deal allowing 49,000 Chinese EVs into Canada while domestic manufacturers were left out of key consumer incentive programs, and I'm wondering when and how, to your knowledge, Honda Canada learned of this...arrangement, let's say, in the auto strategy.

[Brendan Sweeney]

I joined PMAC in late March of this year. That had been announced two months prior, so I'm not quite sure of the exact details of when Honda learned about that. I think it probably could have been communicated better, as far as I understand it.

[Scot Davidson, Conservative, New Tecumseth—Gwillimbury, ON]

It could have been communicated better. That's what I was wondering, and that's what I've heard. That's why I'm trying to nail down whether they learned about this, unfortunately, in the news, and weren't given a heads-up from this government, or if they learned about it in some other fashion.

This deal represents more than half of the EV market. What will the impact be on Canada's supply chains?

[Brendan Sweeney]

It's a bit early to say. We don't have the exact details on whether this is going to be 49,000 EVs from one company or if it is going to be spread out between a number of different companies. Are these EVs going to be coming from China-based companies like BYD, or from Volvo cars?

[Scot Davidson, Conservative, New Tecumseth—Gwillimbury, ON]

We do know the incentives are going to be for 49,000 Chinese EVs.

Why I say that.... I'm proud to have Honda in my riding. It's their 40th anniversary this year. Plants like Honda in Alliston produce world-class hybrid vehicles and employ thousands of Canadians, yet this Liberal auto strategy explicitly excludes hybrids from the consumer purchase incentives.

Why is this government actively undermining our Canadian auto workers and vehicles that are built here in Canada? Why would they be doing that?

[Brendan Sweeney]

The majority of vehicles that PMAC members manufacture today in Canada are hybrid electric, which have about a 25% to 30% reduction in greenhouse gas emissions. If there was a way for that to factor into the environmental policy, that would align it well with the industrial strategy, and—

[Scot Davidson, Conservative, New Tecumseth—Gwillimbury, ON]

I'm sorry, but I have limited time. As I understand it, Honda's had over 80 meetings with this current Liberal government. It has gotten nowhere in waiting for the GHG tailpipe emissions. These are all self-inflicted. The EV strategy was self-inflicted by this Liberal government. We're still dealing with these problems. They haven't repealed the EV mandates. This has created uncertainty in the marketplace. I'm just looking for you to expand on that.

We know that Quebec and B.C. have different emissions standards now from the rest of Canada. This government was elected on a promise to move at speeds Canadians have never seen before. That's how they were elected. This Prime Minister promised to deal with CUSMA a year ago. The classic words now around Ottawa are “still waiting”.

I wonder if you could comment on that.

[Brendan Sweeney]

We would certainly appreciate some more clarity on where we're going with section 232, CUSMA and GHG emissions in the very near future. I think we expect to get some of it sooner rather than later, because that would really help our members that continue to manufacture vehicles, operate assembly plants at or near full capacity today, and have not laid anyone off.

[Scot Davidson, Conservative, New Tecumseth—Gwillimbury, ON]

Finally, how important is it for this government to secure a CUSMA deal in a timely fashion?

[Brendan Sweeney]

It's very important.

[The Chair, Liberal, Judy Sgro]

Madame Lapointe, please go ahead for five minutes.

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

Thank you very much, Madam Chair.

Mr. Kennedy, earlier you said that, with everything going on between Russia and Ukraine, the liquefied natural gas market in Japan is booming. Can you elaborate on that?

[Trevor Kennedy]

Thank you for the question.

It's honestly one of the greatest success stories that Canada has in this part of the world, and overall for exports. A leading Canadian company, AltaGas, has really successfully expanded into the region. I mentioned the exports to Japan, but it's also a market leader in Korea, and it's exploring other markets.

I had the pleasure of attending an event just last month. A new ship was launched here in Japan that will be used to ship Canadian LPG from the west coast of Canada to markets in Asia. We talk a lot about LNG, oil and other energy opportunities, but the LPG story is a fantastic opportunity. We've heard markets like India and others express an interest in Canadian LPG, so it's certainly something worth looking into. Canadians really should celebrate the success we've had in this part of the energy sector.

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

Thank you.

Speaking of tourism, you said that 580,000 Canadians went to Japan, but fewer Japanese visitors come to Canada.

In your view, why are more Canadians visiting Japan now than before?

[Trevor Kennedy]

That's a great question. With my almost 20 years in the market, it's remarkable to see how many Canadians are travelling to this part of the world. I think it really underscores the appreciation Canadians have, and I think particularly younger Canadians have, for the Japanese market. By my count, there are something like 10 daily flights now between Canada and Japan, which is remarkable. A decade ago, there may have been two or three. It's a great success story.

There is a challenge right now with Japanese consumers. The yen is weaker than it has been historically. One Canadian dollar is equal to about 115 yen. It was the opposite 20 years ago. It's difficult to say what the currency will look like over time. Wages are increasing here for the first time after many decades. Whether that leads to Japanese consumers being able to travel around the world, I'm not sure, but I know there's certainly a great appreciation for Canada and a real interest. I do hope to see many more Japanese people visit Canada and reciprocate on this incredible people-to-people exchange that we've seen with tourism.

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

Do you have any idea what percentage of Japan's gross domestic product comes from tourism?

[Trevor Kennedy]

Even though 688,000 is a really big number by most standards, Japan is now welcoming about 40 million tourists per year. We're not even in the top 10, to my knowledge, but we are one of the largest draws. North American tourism has become very important for Japan.

I would need to verify this data point, but I believe the tourism industry here is now more valuable than the value of auto exports to the world as a percentage of GDP. That's not to say that one is more valuable than the other. It's to illustrate the size of the tourism sector here. We are definitely an important market. Air Canada operates a lot of its regional operations from here, I think based on a lot of the success they've had from this market.

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

Thank you.

Mr. White, we keep hearing about phytosanitary measures. Do you know if these measures are a problem for Canada-Japan relations?

[Rick White]

There are none at the present moment. I think there were some discussions from time to time during our preconsultations, but we got those things sorted out ahead of time and we let science prevail. There haven't been any, to my recollection, for quite some time.

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

Thank you very much.

When we signed the Comprehensive and Progressive Agreement for Trans-Pacific Partnership a few years ago, in 2017 or 2018, did exports to Japan start going up?

Do you think we can increase our canola exports to Japan?

[Rick White]

It's a great question. Really, what CPTPP did was level the playing field between us and Australia, our main competitor, so that it didn't really have an impact. It allowed us to hold our own during that period of time.

Lately, however, over the last number of years, our Japanese market share has gone down, because we've had a weak crop or two in the last five years or so. In terms of expanding that market further, we have Australia competing with us. On the other hand, we also have the Japanese population declining and getting older. That's a long-term signal to us. I don't know if there's much opportunity to expand, because they just don't have the people to consume it.

[The Chair, Liberal, Judy Sgro]

Thank you very much.

We'll move on to Mr. Ste-Marie for five minutes, please.

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

Thank you, Madam Chair.

To the witnesses, I'm so grateful for your very informative presentations. Thank you for being here.

Mr. Sweeney, during the first hour of the meeting, we heard from Mr. Kingston of the Canadian Vehicle Manufacturers' Association. If I understood correctly, he told us that, because of the Trump administration's tariffs, it now costs more to build a vehicle in North America than to build and assemble it in Europe or Asia.

Is that happening in Japan as well?

[Brendan Sweeney]

Yes, the costs associated with building vehicles in North America and specifically in Canada have increased because of the tariffs, and it is not helpful for competitiveness.