International Trade Committee on Oct. 6th, 2025

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

Thank you, Mr. Bellisle.

Earlier, you talked about the investments made by the Americans in port facilities on the east coast. If you were to wave a magic wand and become Prime Minister of Canada, what kinds of investments would you make to keep Canada competitive with, obviously, a long-term vision of 10, 20 or 30 years?

[Robert Bellisle]

As I said in my remarks, there are four gateways to North America: the west coast, the east coast, the Mississippi, which is connected to the Gulf of Mexico, and, naturally, the St. Lawrence and the Great Lakes. However, although investments have been made in western Canada and continue to be made, which is very important, not enough has been invested in infrastructure along the St. Lawrence. We need to increase these investments because, once again, we're talking about the third-largest economy in the world. If we don't invest in it, we won't have made the strategic investments we need for our country.

In short, it would be a matter of investing in that infrastructure and, naturally, in their intermodal capabilities.

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

How is the supply chain currently affected by the tariffs? Are you seeing any impacts?

Will they be short, medium or long-term, given the current situation and the upcoming renegotiation of the Canada-United States-Mexico Agreement, or CUSMA?

[Robert Bellisle]

I think I mentioned earlier that the steel sector was significantly impacted. There are significant declines at ports that were focused on steel products and inputs. If we produce steel for the automotive sector, we need what we call “slabs”, which are semi-finished products. We used to import large quantities of this product.

Naturally, in the aluminum sector, most of Quebec's aluminum smelter production was destined for the United States, and the emphasis is on efforts to find other markets. Again, that's where shipping becomes important. We want to change markets, but no other countries have a land connection with us. We need to export this aluminum to Europe. However, the marine sector is once again becoming extremely important.

The other products, such as grains, cereals and so on, are commodities that remain strong and have not yet been affected by tariffs.

I think it's also important to remember our natural resources and our manufacturing sector, which are the backbone of our country.

[The Chair, Liberal, Judy Sgro]

Thank you very much.

Next is Monsieur Savard-Tremblay, please, for six minutes.

[Simon-Pierre Savard-Tremblay, Bloc, Saint-Hyacinthe—Bagot—Acton, QC]

Thank you, Madam Chair.

Mr. Volpe, I was pleased to see that the Automotive Parts Manufacturers' Association did not call for the end or reduction of tariffs on Chinese electric vehicles, given all the security and data collection dangers that can arise. I congratulate you on that.

That said, my question will be somewhat related to this subject.

First of all, to your knowledge, can Mexico be used as a conduit for parts or Chinese cars?

It would be surprising if that were the case for cars as such, but we might wonder about parts.

[Flavio Volpe]

They have been. That's part of the reason why Canada and especially the White House—both the former and current White House—have focused on closing the doors for Mexico.

We watched the Mexican automotive market go from about 5% of imports from China two years ago to over 20%. Half of those are Chinese-branded vehicles. The others are Chinese-manufactured vehicles for westerners.

Almost 50% of the demand for industrial space for new industrial parks and investment is coming from Chinese parts manufacturers, which we view as a displacing investment of western-based and market-based suppliers in Mexico.

[Simon-Pierre Savard-Tremblay, Bloc, Saint-Hyacinthe—Bagot—Acton, QC]

You mention movement. You're telling us that, at present, there is no such route for Mexico and China.

Is it because of the increased tariffs?

[Flavio Volpe]

There are a bunch of different reasons.

First, the Mexican government promised the former American government that they would cut off support for foreign direct investment. The current Mexican government has promised, both to the new White House as well as through newly introduced legislation, to enforce more strongly country of origin regulations, with an eye to transshipping from China.

I don't want to speak in the affirmative because they have to enforce it. The intention in the legislation is there.

[Simon-Pierre Savard-Tremblay, Bloc, Saint-Hyacinthe—Bagot—Acton, QC]

That said, there was a tightening of the rules of origin on vehicle assembly in the Canada-United States-Mexico Agreement, compared to the previous version, which was NAFTA. Has that ever partially alleviated the problem?

The rules of origin talked about minimum North American content.

[Flavio Volpe]

It helped. It definitely helped.

We went from a 62.5% North American content requirement in NAFTA on 29 parts categories to 75% on probably double the number of categories. Then, on the parts side, we went from a 60% local content requirement to somewhere between 65% and 75%, depending on the parts.

In the interim, the Chinese have also gotten a lot stronger in terms of the breadth and types of parts that they're competitive on. Vehicles have modernized. Vehicles with more electronics are a bigger opportunity for Chinese dominance in that space.

Yes, there's less non-local content. In some cases, there's about the same Chinese content because they've expanded their play within the 25% they're allowed on cars and 25% to 35% they're allowed on parts.

[Simon-Pierre Savard-Tremblay, Bloc, Saint-Hyacinthe—Bagot—Acton, QC]

Are the rules of origin for the auto sector in the 2020 version of CUSMA satisfactory? Are there any changes that could be considered as part of the upcoming review?

[Flavio Volpe]

First of all, yes, they were more satisfactory to parts suppliers, Canadian parts suppliers as well as American and Mexican-based parts suppliers. It provided a better opportunity for us to sell into North American vehicle assembly.

Every vehicle assembly company will tell you that it's impossible to make a car without Chinese content. If your car has a battery, the cells are more than likely Chinese, whether that's a conventional hybrid, a plug-in hybrid or an EV. Canada has an opportunity to play there.

With those EVs' higher voltage platform, there's a lot more electronic gadgetry, I would say, in vehicles. That's a big Chinese strength. We know that. Could we do more? Certainly the Americans would like to squeeze that more. They would like to squeeze that number. I don't think it's a secret that they promoted 75% to 85% last time.

In spite of the fact that I personally would love to see more Canadian, American and Mexican content in, we have to be careful that the rest of our market regulation matches that. If we say we want to go to 100% EVs by 2035, as the U.S. administration at least has on the books and as Canada had on the books until we paused, the only current solution for that is Chinese, so they don't reconcile with each other.

[The Chair, Liberal, Judy Sgro]

You have 20 seconds.

[Simon-Pierre Savard-Tremblay, Bloc, Saint-Hyacinthe—Bagot—Acton, QC]

In 20 seconds, I can only say thank you. I'll continue my questions during my next turn.

[Flavio Volpe]

Thank you for your interest.

[The Chair, Liberal, Judy Sgro]

Mr. Groleau, please go ahead for five minutes.

[Jason Groleau, Conservative, Beauce, QC]

Good morning, everyone. Thank you for being here.

Mr. Bellisle, I want to congratulate you on your fine company, which is of vital importance to the economy, as we all know.

You talked about the importance of investing in infrastructure. I would like you to expand on your idea. Important projects are being looked at right now, particularly with respect to critical minerals. I'd like to hear your thoughts on that.

Do we have the infrastructure to develop these projects and transport these minerals?

[Robert Bellisle]

Thank you very much.

We have the potential to develop projects, but we currently don't have the infrastructure we need to reach our full potential in critical resource development. That's why I said that we need to invest significantly in infrastructure, especially port infrastructure, because critical minerals are, most of the time, transferred onto ships. Naturally, we will have to adapt to geographic constraints. Some ports are deepwater ports, but others are not. Taking these constraints into account, we have to make sure we have all the infrastructure needed to meet the logistical challenges associated with the exploitation of these materials.

[Jason Groleau, Conservative, Beauce, QC]

Do you think it's urgent to invest in programs to build this infrastructure?

[Robert Bellisle]

It's more than urgent. In the current geopolitical context, decisions are made quickly, sometimes in a matter of hours, sometimes in a matter of days or weeks, but certainly in a matter of months or less. Some decisions, such as tariff decisions, completely change trade flows. However, it takes years to change regulations or for companies to move projects forward, so we have to strike a balance between the pace of change in the geopolitical world and the pace at which we are able to invest in infrastructure.

I gave the example earlier of our request to have customs officers in Quebec City. The Port of Québec is the fifth-largest port in Canada. We've been working on this issue for almost two years. I believe that governments have shown a good willingness to change things and to press the gas pedal, and we applaud that, but I think it's urgent. We can't just try to do it. It has to be done.

[Jason Groleau, Conservative, Beauce, QC]

Do you think things are moving fast enough at the moment?

[Robert Bellisle]

I think there is certainly a will to move things forward, but because of the speed of change in the world right now, we must collectively find a way to move faster if we want to get through this. I believe we have the necessary potential. Canada is a country rich in natural resources. It must exploit them to be competitive on a global scale and thus create prosperity for its citizens.

[Jason Groleau, Conservative, Beauce, QC]

I completely agree with you, Mr. Bellisle.

Do you use the Canadian Border Services Agency's assessment and review management, or CARM, system on a regular basis?

[Robert Bellisle]

No.