International Trade Committee on Oct. 6th, 2025

[The Chair (Hon. Judy A. Sgro (Humber River—Black Creek, Lib.)), Liberal, Judy Sgro]

I'm calling the meeting to order. This is meeting number five of the Standing Committee on International Trade. Welcome to the members and to our witnesses.

Pursuant to Standing Order 108(2) and the motion adopted by the committee on Thursday, September 18, the committee is resuming its study of Canada and the forthcoming CUSMA review.

We have with us today from the Automotive Parts Manufacturers' Association, Flavio Volpe, president, by video conference. For the Center for North American Prosperity and Security, we have Jamie Tronnes, executive director. From QSL International Ltd., we have Robert Bellisle, president and chief executive officer, by video conference.

Welcome to you all and thank you for taking the time to speak to the committee today.

We will start with opening remarks, and then I will open the floor for questions.

I will go to Ms. Tronnes for five minutes, please.

[Jamie Tronnes, Executive Director, Center for North American Prosperity and Security]

Thank you, Madam Chair and members of the committee.

I'm the executive director of the Center for North American Prosperity and Security, CNAPS. We are the U.S.-based office of the Macdonald-Laurier Institute. I'm honoured to be able to appear before you today.

Since Trump's first tweet about tariffs in November, Canada and Mexico have been reeling from tariff threats by President Trump. While we may have been the first to receive the brunt of the initial tariff bluster, it is other countries that are receiving the highest tariff levies. Although Canada's aluminum, copper and steel industries are feeling the pain of high American section 232 tariffs, the vast majority of trade with the United States remains tariff-free for the time being. Canada, for now, has the lowest overall tariffs thanks to the CUSMA.

Nonetheless, the current uncertainty in the trade market is wreaking havoc on investment globally. Canada's government has taken steps to try to reassure investors that Canada remains a strong place to do business. Until a CUSMA review is complete, this will remain uncertain. On this point, I, along with my colleagues at the Macdonald-Laurier Institute, Richard Shimooka and Tim Sargent, have written a paper entitled “The Grand Bargain: A Path to Prosperity, Security, and Strength for the United States and Canada”. In it, we argue that Canada can gain more leverage in a trade deal by expanding the scope to include things that America would like Canada to do. This comprehensive fiscal, social and security strategy also bakes certainty into the trade relationship, as the United States is getting more from Canada than it would otherwise through a trade agreement. However, having a comprehensive agreement makes it harder for any one president or prime minister to try to back out of the agreement as he or she would be giving up all other gains promised by the other country.

For example, tying a defence-spending goal for Canada into a trade agreement would quash decades of concerns in D.C. that Canada has not taken its defence spending seriously enough. Another example would be developing our cross-border energy permitting process. This would ensure that long-term investments are not subject to the changing government whims on permitting, such as what happened with the Keystone XL pipeline.

Both countries can use this opportunity to add certainty and strength to the relationship by solving a number of cross-border irritants with a grand bargain strategy. As other witnesses have spoken, or will speak, on some of these irritants, there are two important issues that Americans are signalling that they would like Canada to deal with.

First is Canada's Online Streaming Act. The act, like the DST Act unfairly targets American companies and is likely to be raised to the highest levels. Donald Trump is already looking to reshore the film sector and is calling for 100% tariffs on foreign-made films and TV productions. It makes little sense that Canada's government places an additional financial burden on the providers whose services Canadians choose to pay for. These same streaming services shoot or produce much of their content in Canada, already providing Canadian jobs and tax revenue.

The second issue is the proposed digital backdoor access requirements contained in Bill C-2. Recently, Vice-President Vance very publicly touted his success at getting the U.K. to drop similar backdoor encryption requirements. This should be seen as a signal from the U.S. administration to Canada.

As for immediate goals on trade, when Prime Minister Carney goes to Washington this week, his goal must be no less than the removal of Canada as a subject of section 232 tariffs. This trade designation implies that Canada is a national security threat to the United States. Prime Minister Carney will have to work hard to disabuse the Trump administration of this idea, which gained traction because of Prime Minister Trudeau's mistake of letting Chinese steel and aluminum be dumped in Canada for far too long. The removal of section 232 tariffs on Canadian steel and aluminum is also necessary for the president to achieve an American manufacturing resurgence. The United States does not have the electricity it needs for its data centres and aluminum smelters. It especially cannot power either future without Canadian natural gas to generate electricity or uranium to power nuclear plants.

Finally, I would like to address that the trade review comes at a difficult time in Canada-U.S. relations. CNAPS, my think tank, is not just the sole Canadian think tank with a physical presence in the United States. I am, since the closure of the Wilson Center's Canada Institute, the only think tank staff member in the United States whose work focuses solely on the Canada-U.S. relationship.

Canada has had years to prepare for this moment of CUSMA negotiations, but it is clear that, as a country, we have taken our right to trade freely with the United States for granted. It is not just for the government to stand up for Canadian trade. Businesses, civil society, think tanks—whole-of-Canada approach is required to make our voices heard in the American space.

Thank you.

[The Chair, Liberal, Judy Sgro]

Thank you very much. It's very much appreciated.

Mr. Volpe, you have the floor for five minutes, please.

[Flavio Volpe, President, Automotive Parts Manufacturers' Association]

Thank you, Madam Chair.

I heard the emphasis on five minutes. I think we know each other well.

Thank you to the members of this committee for the invitation.

My name is Flavio Volpe, and I'm the president of the Automotive Parts Manufacturers' Association. We represent over 200 Canadian companies that design, engineer and manufacture components for almost every single vehicle built in North America. Collectively we employ about 100,000 Canadians and then support another 400,000 jobs across logistics, tooling technology and advanced materials.

Automotive manufacturing for us especially is not just a source of pride; it's one of the top export sectors in Canada, accounting for about $82 billion in annual exports. Trade is balanced between the two countries here, and that is a very serious point of pride. Eighty-five per cent of the cars that we make in Canada go to the United States. Nearly every single vehicle on American roads has some Canadian content in it. That's what integration looks like.

When we talk about the CUSMA review, we're really talking about the foundation of our economic security. CUSMA didn't just replace the NAFTA; it modernized it for an economy built around the vehicles of the future with semiconductors, digital trade and zero emissions innovation. It reinforced the core principle that we've proven over seven decades, that North America wins together or we lose separately.

It's not just rhetoric. The auto sector shows it every day. A car assembled in Ontario crosses the Canada-U.S. border. Its parts cross up to seven times before the vehicle is finished. On average, Canadian vehicles have about 50% U.S. content and about 55% U.S. raw materials. We have lots of Mexican raw materials and lots of Mexican manufactured commoditized goods. We're one production ecosystem, not three competing jurisdictions.

As we prepare for the review, we must protect that integration from the forces of political short-termism. First, many of us remember 2018 and the section 232 national security tariffs that blindsided our industries. Canadian firms paid hundreds of millions of dollars in duties on parts that were overwhelmingly made in North America. Those duties didn't protect anybody; they punished the most integrated supply chain in the world, and they're doing so again today.

We're hearing echos of that rhetoric from Washington daily in the talks of new duties on vehicles and heavy trucks just today, unilateral reviews of the agreements or new investigations on section 232. Let's be clear. You can't have a continental supply chain if one partner keeps threatening the other. Canada must make the case directly and publicly that North American manufacturing is national security. We build the systems that keep our economies and militaries moving, from drive trains and armoured vehicles to energy storage. It's not the place for tariff gains as we all face off against China.

When CUSMA raised the regional value content to 75%, Canadian suppliers invested accordingly. We expanded domestic capacity in stampings, castings, steel, aluminum, battery-grade critical minerals and cathode materials. We've also increased, since 2019, our footprint in the United States to 176 parts plants that employ 48,000 Americans. That's up 10% since 2019.

APMA's own members have made over $3 billion in new supply chain investments in Canada since 2020. They were made in good faith under the assumption that the rules would be applied consistently.

This review is an opportunity for Canada. It has a generational opening to be a supplier of clean-tech components to the entire continent that come now only from China. We have raw materials. We have minerals. We have talent. We also have a reputation for reliability and security. What we lack is speed.

The Americans moved first with the Inflation Reduction Act. Mexico moved with new policies on domestic energy control. Canada has to move now. It's not a slogan. Industrial policy is the new trade policy. It means investing heavily in getting those critical minerals to market and then being a reliable partner for Americans to help the continent get off of its reliance on China.

In 2018, when we faced the national security tariff threat, our sector stood together with government, labour and consumers in and across the continent. We spoke with one voice. We stayed calm. We won that fight. We need to do that again in 2026.

I meet suppliers from Windsor, Oshawa, Detroit and Querétaro. They don't really see borders; they see production schedules. They don't ask, “Is it Canadian, American or Mexican?” They ask, “Can I get this shipment there by Tuesday?”

The reality is that policy must reflect that, not just for Canadian interests, but for American interests. We have to make sure the Americans understand that American cars or Japanese cars made in Canada are different from cars made anywhere else: They have American content. When you trade with Japan, Korea and Europe and you make the same arguments you do for restrictive, protective tariffs for vehicles from those regions, the vehicles from those regions do not make factory orders in Michigan, and they do not make steel orders in Pennsylvania like we do.

This is a chance to strengthen the relationship, but it's going to require some really deft leadership from the Prime Minister.

Thank you, Madam Chair.

[The Chair, Liberal, Judy Sgro]

Thank you very much.

We'll go to Mr. Bellisle for five minutes, please.

[Robert Bellisle, President and Chief Executive Officer, QSL International Ltd.]

Madam Chair and members of the committee, as president and CEO of QSL, I would like to thank you for the privilege of sharing my perspective on the vital role of marine transportation in the Canadian economy and highlighting how our sector is adapting to the current challenges and circumstances.

The maritime transportation network extending to the Great Lakes forms the logistical and industrial backbone of our economy. Four major gateways structure our trade—eastern and western Canada, the Gulf of Mexico, and the St. Lawrence and Great Lakes.

Did you know that 80% of goods Canadians use travel by ship, while only 5% of our trade with the United States moves by ship? Half of all our imports and exports are shipped, whether they're finished products, raw material or vital resources for our industries. QSL is a maritime company based in Quebec with over 2,000 employees in more than 66 terminals in Canada and the United States. Our strategic position enables us to anticipate and adapt quickly to market changes.

On recent developments and adaptation, we're witnessing significant shifts. The noticeable decline in steel volumes at Canadian ports is reflecting a slowdown in the automotive industry. In the aluminum sector, shipments that previously went to the United States by train are shifting modes and now sailing to Europe. Some of our ports are under pressure, but we are agile and able to adapt to new solutions for our customers.

The wind energy sector has also experienced strong momentum across Ontario, Quebec and the Atlantic provinces with numerous projects announced and under way. Wind components and blades are arriving by vessel from Europe and also Quebec plants, transiting through the St. Lawrence, a vital corridor supporting this growing economy. Essential products for our daily lives, such as grain, sugar and road salt, are standing the test of time.

Finally, infrastructure in core minerals is essential for value creation, productivity and economic sovereignty. Maritime transport stands out for its flexibility. Our efficiency directly impacts Canadian businesses and consumers, both for imports and exports.

Investing in strategic priorities, the United States has recently made substantial investments in port infrastructure, especially along the east coast, to support offshore growth and strengthen supply chains. Ports such as New York, New Jersey, Savannah, Charleston, Virginia, and Baltimore have received billions in public and private funding to expand container capacity, modernize terminals and accommodate wind energy components arriving from Europe.

To remain competitive, our priorities are clear.

We must invest in port infrastructure. Several projects are under study. Supporting the maritime sector and accelerating public investment are crucial for Canada's competitiveness and productivity. Some examples would be Belledune in New Brunswick, Sheet Harbour in Nova Scotia, and Saguenay and Quebec City in Quebec.

Encouraging private investment and streamlining administrative processes help projects move forward with efficiency and unlock new opportunities. For instance, we had requested approval from customs clearance from the Canada Border Services Agency regarding an international container handling project in Quebec in November 2023. If approved, we are ready to invest $60 million in infrastructure expenditures immediately. This project would have a payback to Canadian taxpayers based on CBSA's investment of less than a year.

It is highly beneficial for the federal government to concentrate investments in strategic maritime infrastructure by focusing resources on key projects and quick wins that deliver immediate impact. We can significantly improve the fluidity of goods, making Canadian businesses more competitive, easing access to new markets and seizing emerging opportunities. This approach not only maximizes economic returns for the country, but also enhances our competitiveness and resilience in a rapidly changing global environment.

In conclusion, by accelerating these kinds of projects, we further open the doors for Canadian businesses and consumers to the world. It will boost productivity, competitiveness and job creation across the country. Concentrating federal investments in strategic maritime infrastructure increases the fluidity of goods, opening access to new markets and maximizing economic benefits for Canada.

Thank you.

[The Chair, Liberal, Judy Sgro]

Thank you very much.

For the information of the committee, we just have these three witnesses this afternoon. We've asked them for a bit more time so that we can make sure that we receive all of the information we possibly need from these three excellent witnesses. Thank you to them for making extra time for us.

We'll go to Mr. Chambers for six minutes, please.

[Adam Chambers, Conservative, Simcoe North, ON]

Thank you, Madam Chair.

I would like to thank our witnesses for being here today. It's nice to see all of you here.

Mr. Volpe, I want to chat with you for a little bit.

Would your members work for all, or supply all, OEMs and would that include your traditional domestics plus the international automakers here? Is that correct?

[Flavio Volpe]

That's correct. From the Canadian factories they definitely supply the five OEMs that are making cars here and probably another dozen through the U.S. and down to Mexico. They are also heavily invested in the U.S. with 176 plants wholly owned by Canadian companies and 120 plants wholly owned by Canadian companies in Mexico servicing vehicles throughout the continent.

[Adam Chambers, Conservative, Simcoe North, ON]

How many employees do you think would be representative of not just your membership, but say all of the auto suppliers?

[Flavio Volpe]

There are about 100,000 directly in automotive supply here in this country putting hands on tools in factories and about 400,000 in support of those. Those are logistics, raw materials and other white collar support functions for those companies. Then Canadian companies employ about 48,000 in the U.S. and 58,000 in Mexico as well.

[Adam Chambers, Conservative, Simcoe North, ON]

It's a pretty big footprint as far as employment goes comparative to other industries that are under threat or under attack from the 232 tariffs.

[Flavio Volpe]

Yes.

[Adam Chambers, Conservative, Simcoe North, ON]

I note that the government has provided some support for other affected industries. They've come out with some support for lumber. They've come out with some support for steel.

Has there been any kind of direct industrial targeted support as a response to the 232 tariffs?

[Flavio Volpe]

Yes. We asked directly for a series of measures, most of which either came on directly or in different configurations. Smaller suppliers need liquidity support. The government announced a working capital fund availability through the BDC that a lot of the companies are accessing. It was for the wider vulnerability to the fact that 85% of the cars get exported from Canadian factories down to the U.S. and trying to turn around some of that dynamic to build where you sell, convincing our customers from Ford through Honda in this country to retool for products that Canadians are currently buying, or could be expected to buy.

There was a $5-billion fund that was not just for our industry, but also for steel and aluminum, a series of tariff-related remissions programs that helped ease the burden while we're being targeted.

[Adam Chambers, Conservative, Simcoe North, ON]

Your point is your sector is under financial strain, is that right?

[Flavio Volpe]

There's no question.

[Adam Chambers, Conservative, Simcoe North, ON]

You referenced some government money, taxpayer money, that has been put aside to support the industry. What about an idea that doesn't require any taxpayer support for the industry and just a change in regulation?

The electric vehicle mandate is going to burden the sector. We heard testimony from one of your peers who represents automakers themselves that $1 billion was already committed to purchasing credits from Tesla. Would that not financially strain the sector even more at a time when that becomes difficult already to deal with the tariffs?

[Flavio Volpe]

Sure. I've been relentlessly on the record saying that the EV mandates as they were configured were unachievable and that the only way to get to those levels, or the best way to get to those levels, was to buy credits from companies who were importing electric vehicles into this country who weren't invested here, like Tesla, who took advantage of that loophole that was in the federal purchase incentive the iZEV program that allowed them to import cars from Shanghai with no Canadian content.

Also, there are companies like VinFast, who we admire. The Vietnamese are now in the business, but there's no Canadian content on that. They were very clear about it publicly. Relentlessly with government there is a 60-day review on. ECCC is pretty clear on how we think, but we want to see if they listen.

[Adam Chambers, Conservative, Simcoe North, ON]

Thank you very much for that. I appreciate your advocacy for what I think is common sense, especially since a lot of this money is being given to or paid for by auto manufacturers and the supply chain, which have invested billions of dollars here to companies that have no footprint here.

I have 20 seconds left, so this is the final question. It's on another trade issue we're also dealing with at the committee.

Would you recommend that government reduce the tariffs on Chinese imported electric vehicles?

[Flavio Volpe]

No. There's no upside to that. There's no Canadian content in there, and the Chinese are not threatening to invest here, either.

Mexico has just put a 50% tariff on all Chinese vehicles. I think it's important that all three North American countries are on the same page while we gross up our own.

[Adam Chambers, Conservative, Simcoe North, ON]

Thank you, sir.

Thank you, Madam Chair.

[The Chair, Liberal, Judy Sgro]

Mr. Lavoie, go ahead, please.

[Steeve Lavoie, Liberal, Beauport—Limoilou, QC]

Thank you, Madam Chair.

My first question is for Mr. Bellisle.

First of all, Mr. Bellisle, I must point out that we know each other, since we had to work together when I was in my former role as president of the Chambre de commerce et d'industrie de Québec. Your company is a major player in the region.

Current context aside, I'd like you to tell us about the importance of the supply chain we have here in Canada and in America. I spoke about it here last week during a meeting with other guests about the negotiations. We want to build a strong and more independent Canada.

You have facilities all over America, so I'd like you to talk to me about the importance of having a strong and autonomous supply chain and to give me concrete examples, if you have any, of things that QSL is doing to show how important the supply chain is for Canada.

[Robert Bellisle]

Thank you, Mr. Lavoie.

First, it's worth remembering that if the Great Lakes-St. Lawrence corridor were a united economy—in other words, Canada and the United States together—it would be the third-largest economy in the world. As a result, that logistical flow is extremely important. Given the current geopolitical situation, we need to continue to invest in this infrastructure, and the marine component is at the heart of all this. As I explained earlier, 80% of the goods consumed, used or handled are transported by ship, so that supply chain is critical.

During the COVID‑19 pandemic, which was not the best time of our collective lives, it was basically the marine transportation sector that kept the country going. It didn't stop a single day during the pandemic, because it was an absolutely essential service for getting goods to Canadians.

We currently have a number of projects at QSL. Earlier, I mentioned the project in Belledune and the offshore wind project in Nova Scotia. What's more, in November 2023, we made a request for a customs clearance centre in Quebec City so that containers could be cleared through customs. The Port of Québec is the last deep-sea port, so this would allow larger vessels to come and unload here in Quebec City. It would also lighten the ships that have to continue to go to Montreal, which is a hub for moving products to the Toronto region or to the American Midwest. The marine sector is therefore at the heart of our country's economic sovereignty.