International Trade Committee on June 11th, 2026

[The Chair, Liberal, Judy Sgro]

Thank you very much.

[Mario Simard, Bloc, Jonquière, QC]

We'll come back to that.

Thank you.

[The Chair, Liberal, Judy Sgro]

You'll have to wait until your next round.

Mr. Chambers, please go ahead for five minutes.

[Adam Chambers, Conservative, Simcoe North, ON]

Thank you, Madam Chair.

It's a pleasure to be here. It's an interesting room. I can't help but feel a bit of sympathy for staff who don't have as much room. Of course, since the government members added a few extra folks, we have more staff in the room but not enough room for everybody.

[The Chair, Liberal, Judy Sgro]

We've been able to find space in the next block.

[Adam Chambers, Conservative, Simcoe North, ON]

We've had great rooms up until now. I think we'll be in a better one next time.

[Bardish Chagger, Liberal, Waterloo, ON]

You have to appreciate what you have sometimes.

[Adam Chambers, Conservative, Simcoe North, ON]

Mr. Winterhalt, you mentioned that you deal with a lot of firms that have primary businesses in the U.S. Our understanding from testimony at this committee from auto manufacturers and other proprietors is that access to the U.S. market is crucial for attracting investment or other business activity from international firms and for convincing Canadian firms to grow.

Is that your understanding as well?

[Todd Winterhalt]

Yes. We would certainly agree with that.

Maybe I can add that the greatest growth we've seen in 2026 is in the growth of Canadian exporters to the U.S. market to ensure their access to that market as well as deeper business relationships here in Canada.

[Adam Chambers, Conservative, Simcoe North, ON]

Okay. In your view, successful negotiation of the Canada free trade agreement with the U.S. is essential for the health of the businesses you serve.

[Todd Winterhalt]

We would say that as it's our largest partner today and likely will be for the foreseeable future, a strong relationship with the United States is in everyone's best interest.

[Adam Chambers, Conservative, Simcoe North, ON]

Excellent. Thank you very much.

Mr. Cléroux, maybe I'll take the opportunity to benefit from having a technical economist at committee. My understanding is that even with the sectoral tariffs imposed by the U.S., the government uses an average tariff rate of Canadian goods into the U.S. of about 3%, give or take a little bit. Do I have that right, from your understanding?

[Pierre Cléroux]

Yes, that's the right number.

[Adam Chambers, Conservative, Simcoe North, ON]

Okay.

My understanding is that this is an average. While 85% of the goods from Canada currently go into the U.S. tariff-free, there are some punishing sectoral tariffs, which bring the average down. Is that the way they get to the average number?

[Pierre Cléroux]

Yes, it is.

[Adam Chambers, Conservative, Simcoe North, ON]

What I have a hard time understanding, but maybe you can just help me understand, is that if the average effective rate of the tariffs is 3% and if CUSMA were to go away totally, there would be an average effective rate of around 1.8% or maybe 2%, because you would go back to what it was like without a free trade deal. Why is no economist or any external actor considering a scenario where you would just pay an average effective tax rate across the board on every good going into the U.S. of 1% or 2%?

I've never seen anyone talk about that as a potential option. Is there a reason? Am I wrong in thinking that may be an option?

[Pierre Cléroux]

I think there are a lot of options on the table. Most of the analysis has been made on the impact of the current tariffs imposed on the different sectors of the Canadian economy. Most of the economic analysis has been focusing on that.

[Adam Chambers, Conservative, Simcoe North, ON]

That's understood, but if the U.S. is going back to a pre-1900 economic and taxation plan, where they will impose tariffs on goods coming in, would it not make sense to spread the pain across the entire economy at 1% or 2%? I'm just trying to understand why no one is talking about this potential way to get out of the very soul-crushing, devastating sectoral tariffs that the U.S. has imposed on specific sectors.

[Pierre Cléroux]

Like we said, there are a lot of different options. We have focused our analysis so far on the current tariffs imposed by the U.S. There are a number of them that are affecting different sectors. At BDC, we have been doing a lot of analysis to better understand what the impact is on Canadian businesses from those tariffs. We haven't looked much at other options because there are so many of them. We have been really focusing on the impact of the current tariffs imposed.

[Adam Chambers, Conservative, Simcoe North, ON]

If I could leave you with a suggestion, if you haven't considered some of these other options, you might want to consider what the impacts to the entire economy would be if there was a base tariff rate of 1% or 2% on all of the goods going into the U.S., what that might do to currency and whether that is a better scenario than the one we're currently in.

[The Chair, Liberal, Judy Sgro]

Thank you, Mr. Chambers.

We'll move on to Ms. Acan, please, for five minutes.

[Sima Acan, Liberal, Oakville West, ON]

Thank you very much, Madam Chair.

BDC launched its defence platform in December and has since expanded it from $4 billion to $6 billion, signalling strong early demand. The first StrongNorth fund investments announced last month focus on areas such as quantum computing and cybersecurity.

Mr. Cléroux, what is this early demand revealing about where Canada's dual-use capabilities are emerging, and how can high-potential firms position themselves to access and benefit from this platform?

[Pierre Cléroux]

Actually, I think that's a better question for my colleague, Véronique. Maybe I can complement after that.

Véronique, do you want to answer on the demand we've had so far?

[Véronique Dorval]

I think you are right to mention that those two areas are important areas from a VC perspective, so from an equity perspective. We are also seeing on the financing and on the advisory side more broad-based manufacturing companies that are already involved in the sector. We see there is quite a bit of demand, for example, for drones and uncrewed vehicles for land and for marine. We see a lot of opportunities for SMEs to be able to contribute and benefit from the growth in the sector.

[Sima Acan, Liberal, Oakville West, ON]

Thank you very much, Ms. Dorval.

Last month the government announced a $1-billion BDC initiative to support businesses across the steel, aluminum and copper value chain. At a recent round table in my riding of Oakville West, I met with business owners. The Oakville Chamber of Commerce indicated that while members are encouraged by the announcement, many are seeking more detailed information on that.

Can you provide an update on the current status of this program? How is BDC ensuring that relevant information is being effectively communicated to businesses across the value chain?