International Trade Committee on June 9th, 2026

[Yasir Naqvi, Liberal, Ottawa Centre, ON]

Thank you.

Mr. Kingston, I'm going to ask you the question. I totally understand the warning that you're hearing. You've been quite consistent on that in all of your public engagements. I think you also understand the effort that the Canadian government is putting in to ensure that CUSMA remains in place, because it is advantageous to all three parties. The stated goal of the government is to ensure that we sign on to a deal that is in the best interests of Canada.

What is your advice? What are you recommending to the Canadian government as we engage in this review? With the view of July 1, which is not a cliff—we still have room beyond July 1—I really want to understand your perspective in terms of the approach the Canadian government is taking, on things you are comfortable with and things you want us to go further with in a particular direction.

[Brian Kingston]

First and foremost, we have to get to the table. The U.S.'s desire, of course, is to negotiate bilaterally, and there's only so much control we have over that, but the sooner we open up those bilateral discussions, the better positioned we will be.

Second, we need to make sure that, as part of these discussions, the removal of section 232s is front and centre. Any agreement that doesn't result in tariff relief for these key sectors will not be very valuable. It provides some certainty for investment, but if we don't get the tariff costs removed, we'll be in a very difficult situation.

Third—and I know that Minister LeBlanc tabled this last week—make sure that this agreement is renewed for a longer period of time. We can't end up in a scenario where we're going through this every year for the next 10 years. That will be very damaging to the investment climate. A long-term renewal—16 years, if we can negotiate that—would be very welcome.

[Yasir Naqvi, Liberal, Ottawa Centre, ON]

I don't think there's any light between what you are suggesting and what Minister LeBlanc and the Canadian government are attempting to do. It's precisely that. It's to engage in a meaningful conversation.

Of course, the section 232 tariffs are of integral importance in terms of the impact on Canadian industry, especially on those targeted sectors, like autos. Seeking the predictability and certainty that we need.... I appreciate your thoughts on that.

Ms. Noble, I want to hear, from your sector's perspective, what your thoughts are. What is your advice to the Canadian government as we are engaging in the process towards a review of CUSMA and hopefully a renewal on a longer term?

[Cathy Jo Noble]

I echo what Brian said. In the lifespan of cattle, you need some predictability about where that end market is and what that looks like. Something that is not just a year-by-year renewal is going to be important.

So far, food, specifically beef, has not been impacted by the tariffs that are in place—I think for two days it was—and that has been beneficial not only for us but also for consumers, because that integrated market also provides the lowest-cost product to the consumer.

Our message is fairly simple. We would like CUSMA renewed in a timely manner and in its current state. There are always going to be regulatory challenges that we can work through, as we proceed, to get more regulatory alignment at the border and so forth. Really, for us, it's about bringing it forward in its current state.

[Yasir Naqvi, Liberal, Ottawa Centre, ON]

When it comes to your sector, the cattle sector, there is an advantage within CUSMA, and that has been maintained.

[Cathy Jo Noble]

Yes, absolutely. I think that integration and the economic benefit have been because of CUSMA.

[Yasir Naqvi, Liberal, Ottawa Centre, ON]

Excellent. Obviously, the aim is to maintain that integration and that advantage. Similarly within the auto sector, it's worked so well in terms of the integrated supply chain. I always try to remind people that there's not an American car; it's a North American car, and maybe that's the cause of concern for the President. We need to maintain that, because it keeps North American manufacturing, auto manufacturing, at a competitive level.

In the absence of a renewal—and I don't like to think that way—what is the impact you see, Mr. Kingston, on North American auto manufacturing as it relates to global competition?

[Brian Kingston]

We're already seeing the impacts of U.S. tariffs on the sector. Last year, North American production declined by 2%. Production in China was up 10%. This is protectionism in action. When you put costs on your manufacturers, you weaken the business case to build in North America.

In the event that we get to a place where there is no relief for Canada or Mexico in a permanently tariffed North American environment, we'll simply have a smaller industry—perhaps significantly smaller. We built 1.3 million vehicles last year, and 1.1 million of those went to the United States. You can't replace that market, so the production levels will inevitably come down dramatically and, with that, jobs and investment. I don't want to contemplate that, because I think there is a deal to be had, but that's where this takes us.

[Yasir Naqvi, Liberal, Ottawa Centre, ON]

I totally agree with you. I don't want to contemplate that either, because I believe there is a deal to be had.

I see the chair.

Thank you.

[The Chair, Liberal, Judy Sgro]

Thank you very much.

The bells are ringing. It's a 30-minute bell. Are we okay to continue until the time to vote? If we can vote here, we can keep going with our meeting. Is everybody okay with that?

[Some hon. members]

Agreed.

[The Chair, Liberal, Judy Sgro]

Madame Lapointe, are you okay with the motion of Ms. Acan?

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

Yes, thank you.

(Motion agreed to)

[The Chair, Liberal, Judy Sgro]

Thank you very much. From the committee's perspective, that's taken care of.

Mr. Gabriel Ste-Marie, go ahead for six minutes, please.

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

Thank you, Madam Chair.

Good morning to all my colleagues. I'm sorry I have to join you virtually today because of family obligations.

I'd like to thank both witnesses for being here. Once again, their testimony has been very interesting and informative.

My first questions are for you, Mr. Kingston. I'm happy to see you again. We had the opportunity to speak a few weeks ago at the Standing Committee on Industry and Technology.

In your remarks, you said that Canada buys more American vehicles than the United States buys Canadian-made vehicles. Is that correct?

[Brian Kingston]

Canada is the number one export market for U.S.-manufactured vehicles by far, so we are their biggest market. We send more vehicles to the U.S. than we import from the U.S. When you include automotive parts, that's where the U.S. runs a significant automotive trade surplus.

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

So that's a strong argument in favour of restoring free trade.

With the North American Free Trade Agreement, or NAFTA, and later with the Canada–United States–Mexico Agreement, or CUSMA, a highly integrated auto manufacturing system was established between Canada, the United States and Mexico, but pressure from the Trump administration, along with the sanctions and tariffs it is imposing, is undermining this system.

Do I have that right?

[Brian Kingston]

That is correct. It's significantly weakened. You can see it in virtually every data point—the total tariff costs incurred by manufacturers and the fact that production is declining. U.S. exports of vehicles to Canada declined by 26%, one of the biggest drops we've seen in years. That's because, of course, Canada retaliated on U.S. vehicles. You're seeing major disruptions to the supply chain. That's why I made that point at the outset: In many instances, companies are better off building in Japan or Europe and exporting to the U.S. than building in North America right now.

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

That approach is unacceptable.

Your association emphasizes how important it is to have a free trade agreement that includes all three countries: Canada, the United States and Mexico. Mr. Trump, or the U.S. government, seems to be in favour of bilateral agreements. This is likely a strategy to strengthen his bargaining position.

Why is it important to have a trilateral agreement that includes all three economies?

[Brian Kingston]

A trilateral agreement is critical, because we don't build cars independently in North America. Mr. Naqvi said it well. There is no such thing as a Canadian car, a Mexican car or an American car. It's a North American car. That's because we see parts and components moving across the border numerous times before the vehicle reaches final assembly.

For any agreement, given the way the supply chain is designed, it's important that we have common rules of origin so we can be more efficient as a North American bloc. If we go down the road of separate bilaterals, anything is possible, of course, but that just means higher costs for manufacturers, which ultimately translate to higher vehicle costs for consumers. That's not good for anybody.

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

Thank you.

Here, all political parties, as well as the government, are calling for the restoration of free trade with the United States and Mexico, as it was under NAFTA and CUSMA.

Your counterpart organization, the U.S. vehicle manufacturers' association, also wants to see a sound free-trade agreement reinstated and enforced. Is that correct?

[Brian Kingston]

Yes, that's correct.

Our counterpart association was actually just in Ottawa last week. It's been making the case to the administration that we need the USMCA renewed and need tariff relief, because it sees the benefit that Canada and Mexico provide to the U.S. manufacturing base.

There's pretty much perfect alignment in the industry around U.S. tariffs and the importance of the USMCA.

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

Yes.

You're telling us that your counterpart organization in the United States is pressuring the U.S. government to reach a free trade agreement and lift all its tariffs. What feedback are you getting from them? Are they optimistic?

Will the U.S. government be willing to negotiate a new agreement this summer and remove its tariffs, or is that less likely?

Is the U.S. association currently considering taking legal action against the U.S. government for breaching the agreement by imposing tariffs on your industry?

[Brian Kingston]

There is definitely a sense of optimism, probably more with respect to the Canada-U.S. relationship than the U.S.-Mexico one. That's really for the reason I pointed out at the outset. If you accept the U.S. administration's world view that trade deficits are bad and that everything must be done to avoid trade deficits, Canada, then, is part of the solution, not the problem, because we are the only jurisdiction that they have an automotive trade surplus with. That is encouraging.

With respect to a legal challenge, it's highly unlikely with section 232 tariffs. Those are tariffs that are put in place after an investigation has taken place to indicate that this sector is of national importance to the U.S. I think it's unlikely that you'll see legal challenges on section 232 tariffs, but I would defer to a lawyer, who would have better advice on that.

[The Chair, Liberal, Judy Sgro]

Thank you very much.