International Trade Committee on Oct. 9th, 2025

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

Welcome to all of the members. This is meeting number six of the Standing Committee on International Trade.

Pursuant to Standing Order 108(2) and the motion adopted by the committee on June 16, 2025, the committee is resuming its study of Canada's engagement in a rules-based international trade and investment system.

We have with us today, from the Canadian Centre for Policy Alternatives, Stuart Trew, senior researcher. From the Chamber of Shipping, we have Bonnie Gee, president, by video conference. From the Grain Growers of Canada, we have Kyle Larkin, executive director.

Welcome to all of you. Thank you for finding the time to come to speak to the committee today.

We will start with five minutes for each one.

Mr. Trew, please start for up to five minutes.

[Stuart Trew, Senior Researcher, Canadian Centre for Policy Alternatives]

It's a pleasure to do so. Thanks very much for the invitation to appear before this committee.

I am a researcher with the Canadian Centre for Policy Alternatives. We've been around since 1980, pursuing social, economic and environmental justice policies that would push us in those directions. I direct the trade and investment research project there, which was established in 1999, right around the time of the battle in Seattle, which pushed back against some of these global trade rules that we're talking about today.

I'm going to make a few broad points that I hope have relevance to both of the committee's studies right now: the one with respect to the CUSMA review and the one with respect to the rules-based international order.

We're very preoccupied, as I know everyone at this committee is, with the trade wars we're seeing right now from the United States and the deindustrialization that we're seeing in this country, which is very much on purpose. It's part of what Trump is trying to do to this country. We're very concerned about that.

With respect to the rules-based order, I'll make a few points.

The order established by the WTO and the web of trade agreements we've had in place since the early 1990s have been contested pretty much from the beginning. I don't think it was ever settled. It never congealed. It's been a site of contestation from the beginning—for good reason—whether in the streets through public protests in Hong Kong, São Paolo and Cancún, or else in academic discourse and in government policy rooms. The belief that these rules reflected a universal truth about the limits of governing in a free market economy was, I think, hubristic from the beginning. We're starting to see the effects of that, and we're starting to see people realizing that at this point.

We took a relatively flexible system for regulating global commerce in the GATT—a system that acknowledged, for example, how imbalances in production may become an economic and political problem or burden for countries, and that allowed states to negotiate temporary safeguards, like import quotas or tariffs—and we built a rigid set of overlapping treaties that locked countries into policies that, if followed strictly, pretty much stunted industrial development and enshrined corporate rights to the detriment of other international priorities and rights, like creating good jobs, preserving high environmental and public health standards, having high wages, upholding human rights and indigenous peoples' rights, and so on. All these other international obligations took a back seat to never-ending growth and the fantasy of perfect market competition within and between nations. The system was built to fail, and we should not mourn its passing.

Obviously, we need rules to avoid beggar-thy-neighbour policies that help domestic jobs and domestic investors by harming other people's jobs and other people's investments. I would say that's the MAGA model, the Trump model.

There's something the government can do here through reforms to our own trade remedies policy, as other witnesses have pointed out to this committee recently.

Unifor, Canada's largest private sector union, has called on Canada to deploy other measures, like the Foreign Extraterritorial Measures Act, to penalize companies that use the excuse of tariffs to move their capital into the United States, as we're seeing with companies like Diageo or Futura Tool and Die right now.

At the same time, Canada should play its part in the world as a fair dealer. We shouldn't just go around breaking rules willy-nilly. We should abide by commitments we have made related to tariffs and market access. In other areas, like procurement, excessive intellectual property rights or excessive limits to how we regulate or set industrial strategy, we need to be prepared to bend and, in some cases, break some of the more unreasonable rules, as other countries are doing. Let's be honest.

My second point is that preserving the old rules of free trade is contradictory to Canada's efforts to forge a transformative industrial strategy. Buy Canadian policies, in particular on large construction and infrastructure projects, are a no-brainer, with minimal, if any, impact on trading relations. Everybody else is doing it. European nations don't lose sleep when they give contracts to European companies, and I don't think we should either. I think they'll understand if we start to do this in a more systematic way.

We've also seen the European Union now following Canada and Mexico in putting steel tariffs in place to protect its own industry. There is some shifting of these strict rules. None of this is WTO-compliant, just as Canada's retaliatory tariffs on Trump in the early days—which I think were a good idea—were not WTO-compliant, but they were necessary to protect Canadian jobs. They were necessary to protect our economic security, to use Trump's language.

The third and final point I'll make is that rules-based trade should help workers, as well as companies. We have successes to build on, like the rapid response labour mechanism in the Canada-U.S.-Mexico Agreement. This is producing results for workers in Mexico, but it needs to be shielded and expanded to cover Canadian and U.S. workplaces as well, so that we can start to discuss extending the system in other countries. We can't do that unless we're also committing to these same rules that we're applying in Mexico.

In light of the new Canada-Mexico action plan, I think it would be beneficial to strengthen co-operation with Mexico in areas like human rights as well, by supporting the protection mechanism for human rights defenders and journalists, which is under the jurisdiction of the Mexican government. This benefits Canadian businesses by giving them greater assurances that their Mexican operations are not going to be involved, perhaps involuntarily, in human rights violations.

Finally, I would say that Canada needs to withdraw from the investor-state dispute settlement regime, which neither promotes nor truly protects investment in other countries or in Canada. International investment arbitration is the opposite of rules-based trade in many respects. Its practitioners are constantly expanding the rules on their own in arbitration, and they're constantly expanding corporate protections beyond the wishes of negotiating parties, with no demonstrable benefit in terms of added investment, especially sustainable investment. It's anti-democratic, and it undermines legal reforms in those countries that would better provide security and business stability.

Those are my comments for now. I appreciate this opportunity. Thank you.

[The Chair, Liberal, Judy Sgro]

Thank you very much, Mr. Trew.

We'll go on to Mr. Larkin, please.

[Kyle Larkin, Executive Director, Grain Growers of Canada]

Thank you, Chair.

Thank you to the members of the committee for inviting us.

My name is Kyle Larkin and I'm the executive director of Grain Growers of Canada, also known as GGC. We are the national voice for over 70,000 producers through our 14 national, provincial and regional grower groups. As the farmer-driven association for the grain sector, GGC champions federal policies that support the competitiveness and profitability of grain growers across Canada.

With over 70% of the grain grown in Canada exported, rules-based trade is critical to the livelihoods of family-run grain farms across the country. In fact, we export our grain and grain products to over 160 countries around the world, creating $45 billion in export value annually.

Unfortunately, the rules-based trading order and Canadian exports are being challenged today like never before. Trade uncertainty, tariffs and non-tariff barriers are on the rise, directly impacting grain producers across the country, who rely on international trade for their individual farm revenues.

Most concerning is the trade uncertainty that we are currently experiencing with our two largest trading partners. The United States, which accounted for over $17 billion of grain and grain product exports in 2023, has become an unreliable trading partner, with changes in their international trade policy on an almost daily basis. Fortunately, all grain and grain product exports continue to be tariff-free under the Canada-United States-Mexico Agreement. However, tariffs on steel and aluminum will have an impact on farm equipment pricing, and overall trade uncertainty has depressed markets for crops that family farms rely on.

Our second largest trading partner, China, which accounted for over $9 billion of grain and grain product exports in 2023, has directly targeted grain farmers in the current trade spat between our two countries. The 100% duties introduced earlier this year on canola oil, canola meal and peas, and the recently introduced 75.8% duties on canola seed, have had a detrimental impact on farm gate revenues. China has also begun a new anti-dumping investigation into pea starch, furthering the effects on producers across the country.

What can Canada do in this changing international trade landscape? We must first champion the rules-based trading order at home through our own domestic policies and decisions. As Michael Harvey from the Canadian Agri-Food Trade Alliance mentioned to this committee about two weeks ago, “Protectionist measures, both domestically and internationally, should be rejected, as they undermine the principles of free, fair and open trade.”

Second, with over $45 billion in grain and grain product exports to over 160 countries around the world, Canada continues to be an important supplier of food. However, we have taken this position for granted for too long, with global competitors quickly catching up and competing for market share. To ensure Canada remains one of the top agriculture and agri-food exporters in the world, we must champion the rules-based trading order globally, strengthen our market access engagement and invest in trade-enabling infrastructure to meet the demands of the 21st century.

Lastly, and most importantly, Canada must reset its key trading relationships. Trade uncertainty with our two largest trading partners is having a devastating impact on the livelihoods of family-run grain farms across Canada. The benefits of CUSMA to Canada, the United States and Mexico need to be continuously promoted and defended. Ongoing and increased engagement with China is critical in resolving trade irritants.

Canada must continue to instill, promote and defend the rules-based trading order, both domestically and internationally. Without it, our exports will shrink, impacting both grain farmers and Canada's national economy.

Thank you very much, and I'd be happy to take any questions.

[The Chair, Liberal, Judy Sgro]

Thank you, Mr. Larkin.

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

[Bonnie Gee, President, Chamber of Shipping]

Madam Chair and honourable members of the committee, thank you for the opportunity to present our perspectives on rules-based international trade and investment systems.

The Chamber of Shipping is proud to represent international shipowners and operators who move more than 100 billion dollars' worth of goods through Canadian ports to and from over 150 overseas markets each year. From grain grown in the Prairies to minerals mined in the north and tech products built in Ontario and B.C., shipping connects Canadian producers to global markets.

Canada depends on a rules-based international framework to ensure that ship operators comply with international standards established through the United Nations International Maritime Organization, or IMO, where Canada is viewed as a respected and influential maritime nation. The IMO negotiates conventions that set global standards for safety at sea, environmental protection and maritime security. Flag states where ships are registered enforce IMO regulations through inspections of ships conducted by a global network of surveyors and port state control officers designated in countries where ships are operating.

Canada is a signatory to the Paris Memorandum of Understanding on Port State Control, which consists of 28 participating maritime administrations that cover the waters of European coastal states and the North Atlantic basin from North America to Europe. Canada is also a signatory to the Tokyo MOU, which consists of 22 member authorities in the Asia-Pacific region. The intention behind these MOUs is to eliminate the operation of substandard ships through concentrated inspection campaigns and a harmonized system.

Canada's implementation of international conventions and guidelines is generally consistent with global standards, but when legislation or regulations deviate from the standards, there is often an increased cost for shipping lines doing business in Canada, which may impact the competitiveness of Canadian businesses. The international conventions and standards are meant to provide shipowners certainty in their investments in new builds and their contractual arrangements.

Commercial shipping transactions are also executed under internationally recognized standard form agreements developed by the Baltic and International Maritime Council. These contracts are designed to streamline maritime operations, reduce legal risks and ensure fairness and clarity to the parties involved.

In the absence of international frameworks for shipping, there would be a plethora of conflicting national regulations, resulting in commercial distortion and administrative confusion for the industry, causing uncertainty, inconsistency and inefficiency for global trade.

The Office of the U.S. Trade Representative's decision to impose new port entry fees on Chinese-built, -owned or -operated vessels under a section 301 trade action will take effect on October 14. This will have an impact on vessels serving the North American trade and will likely result in increased freight rates and increased costs to U.S. businesses and consumers. Two container lines that trade regularly into the U.S. and Canadian ports could face up $2.1 billion in additional costs in 2026. If Canada were to take a similar approach on Chinese-linked vessels, the harm to Canadian businesses could be greater.

Furthermore, the United States' recent decision not to support the International Maritime Organization's net-zero framework, which is expected to be ratified in the coming weeks, carries significant implications. The net-zero framework sets annual GHG intensity reduction targets for ship fuels through 2035, and penalties for exceeding GHG limits will apply. As Canada intends to ratify the net-zero framework, the U.S. threat to impose retaliatory tariffs on countries endorsing this framework is deeply concerning, as it may disrupt international trade flows and create further uncertainty for carriers operating in U.S. markets. This stance also risks undermining the competitiveness of Canadian businesses that rely on integrated supply chains and stable maritime governance.

The global shipping industry has exhibited a high degree of operational agility in response to recent trade policy shifts and geopolitical disruptions. In the face of new regulatory measures and security threats to strategic maritime corridors, shipping operators have rapidly adjusted routing strategies, reallocated fleet assets and diversified port engagements to mitigate risk and maintain supply chain continuity. These adaptive responses are supported by advanced logistics technologies, integrated intermodal infrastructure and robust contingency planning frameworks. The industry's capacity to respond swiftly and effectively to external shocks underscores its strategic importance in global trade and its resilience in navigating increasingly complex and volatile international environments.

Canada's prosperity has long depended on the stability, transparency, predictability and openness afforded by the rules-based global trading system. However, this is a pivotal moment, and Canada should prioritize economic sectors that face the most severe shocks while refining trade policies in a measured, decisive and transparent manner to secure our own strategic economic interests and to ensure our sovereignty, prosperity and resilience.

The shipping industry is highly adaptive and will continue to respond effectively to regulatory and market changes, driven by its inherently competitive and dynamic nature. We are prepared to support Canada and its trade diversification strategy.

Thank you.

[The Chair, Liberal, Judy Sgro]

Thank you all very much.

We'll go on to Mr. McKenzie for six minutes.

[David McKenzie, Conservative, Calgary Signal Hill, AB]

Thank you very much, Madam Chair.

Thank you to the three individuals who have come before the committee today, bringing their background, information and much intelligent commentary that we need to take into consideration.

Mr. Larkin, you mentioned prioritizing trade-enabling infrastructure. This strikes me as something that, perhaps not entirely but largely, is going to be within our control in our country, when so many things these days are not.

Can you give us some further detail about that?

[Kyle Larkin]

That's a great question. Thank you very much for that.

Only a few weeks ago, the Government of Canada came out with its major projects list and listed about 10 or 12 different projects on it. The ports of Montreal and Churchill made the list, but Canada's largest port—not only for grain and grain products but for Canada's economy at large—is the port of Vancouver. The port of Vancouver, simply put, wasn't included on that list. I don't know why; we have over $35 million of grain and grain products that go through there every day, and over 50% of the grain grown in Canada goes through the port of Vancouver. It's critically important for the sector. We rely on infrastructure there that was built in the early to mid-1900s. I can tell you that countries around the world are investing billions of dollars in their trade-enabling infrastructure, and the port of Vancouver should be at the top of that list.

[David McKenzie, Conservative, Calgary Signal Hill, AB]

Absolutely.

I think you may have made some comments previously on the Second Narrows bridge. I presume that ties into that same capacity in the port of Vancouver.

[Kyle Larkin]

The Second Narrows rail bridge is at the top of our list when it comes to the port of Vancouver. It's a bridge that was built in the sixties, and it needs to go up and down every time a ship passes underneath it. Because of the Trans Mountain pipeline extension and its terminal, which is at the end of the bay, that bridge is going up and down like never before. It's the only connection point between the south shore and the north shore of the port of Vancouver. That bridge was built in the 1960s. If it were ever to fail, we would be in a pretty critical situation and at least half of the operations at the port would be inoperable for weeks, if not months.

[David McKenzie, Conservative, Calgary Signal Hill, AB]

That seems like a perfectly boxed and gift-wrapped nation-building project for our government to consider.

[Kyle Larkin]

Yes, it is 100%.

[David McKenzie, Conservative, Calgary Signal Hill, AB]

Thank you. I appreciate that.

I think you've spoken as well about regulatory burdens that have an impact; however, I don't know if that's more in the shipping itself or on the production side. Can you comment on some of the things that we can do something about, notwithstanding what may be happening with our trading partners around the world?

[Kyle Larkin]

Yes. On the regulatory side of things, regulatory co-operation with the United States would be at the top of the list when I think of regulatory challenges that we have. It's about being able to integrate our regulatory systems not only with the U.S. but also with Mexico, especially on sanitary and phytosanitary measures, which are extremely important.

When we look at the CUSMA review or possible renegotiation, that would be near the top of the list so that we make sure we continue to work on that regulatory co-operation. I'm happy to see that the government has taken that online a little bit more, but there needs to be a lot more work done there with both countries.

[David McKenzie, Conservative, Calgary Signal Hill, AB]

One thing that has been identified in the holistic relationship between Canada and the U.S. is that it contains much trade, and some of that is very technical. Trade irritants are things that our American partners have identified as problematic.

Are there irritants in the shipping world that you can tell us about and that we could address?

[Kyle Larkin]

That's a good question.

I wouldn't say there are necessarily irritants in the grain and grain products space. I'm happy to say that grain farmers, be they in Alberta, Saskatchewan, Oklahoma or Nebraska, are all trying to do the same thing. They're trying to grow crops. They're trying to make a livelihood. They're mostly run by mothers, fathers, sons and daughters, and what they're looking for is an equal partner in government, be it the American government or the Canadian government. What they're looking for is trade to continue between our two countries.

I always tell the story that oats grown in Manitoba are primarily shipped down to five or six states in the U.S. and produced into Cheerios; those Cheerios are then shipped back up here to Canada for families to enjoy across the country. That's really the integrated nature of our agriculture space. That story is told not just in the grain space; it's told in the pork space and the cattle space. You name the agriculture product, and that's usually how it works.

[David McKenzie, Conservative, Calgary Signal Hill, AB]

We have a lot of public conversation these days about auto parts going back and forth across our border as vehicles are assembled. Is it the same in agri-food and finished agricultural products produced for Canadians?

[Kyle Larkin]

Absolutely. You can look at the canola space as well. We ship a significant amount of canola down to the U.S. A lot of it goes to California and gets produced into biofuel; some of that gets shipped back up here to Canada for individual Canadians or for farmers to use in their equipment.

[David McKenzie, Conservative, Calgary Signal Hill, AB]

Mr. Larkin, I grew up in Saskatchewan, and my parents both grew up on the family farm in Manitoba, so I understand greatly what you're talking about.

When we look beyond our borders, what markets would be priorities for grain farmers and exporters in Canada?

[Kyle Larkin]

I go back to the port of Vancouver. The reason the port of Vancouver is our most important port and the reason it's growing year to year is that the Indo-Pacific region is the fastest-growing region in the world. It's not just me saying that; it's every country around the world knowing that to be a fact.

When we think of our next customers, we're looking at the Indo-Pacific, 100%. We look at India, Indonesia, Vietnam, Philippines—almost every country in the Indo-Pacific is of critical importance for us. We're keeping a close eye on the ASEAN negotiations. Hopefully those get done as soon as possible. The Indonesia-Canada free trade agreement was a good boost to our trade there. It's one of the fastest-growing markets in the region. The Indo-Pacific is top of the list.

[David McKenzie, Conservative, Calgary Signal Hill, AB]

I would presume you're looking for a normalization of relations with India and increased trade there, as well as supplying food to that nation.

[Kyle Larkin]

Absolutely. India is critical for a lot of grain products, but it is especially important for pulses—peas, lentils, etc. India is one of the largest markets for pulses.

There are challenges here and there on tariff or non-tariff barriers that come up every now and then. There's obviously a political challenge there that sometimes comes up, based on how the political dynamics are between Canada and India. Our hope there is the same as with China and the U.S. That relationship needs to be reset so we can get our trade back online.

[The Chair, Liberal, Judy Sgro]

Thank you very much.

Thank you, Mr. McKenzie.

Ms. Lapointe, go ahead, please.

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

Thank you, Madam Chair.

Good afternoon and welcome to the witnesses.

I have some questions for you, Mr. Larkin, particularly with regard to grain.

You piqued my curiosity with your story about Cheerios cereal: The grain used to manufacture it is sent across the border, where it is processed into a finished product that is then sent back to our country.

What percentage of the grain we produce here in Canada is processed in the United States into products that are then sent here to Canada?