International Trade Committee on Oct. 9th, 2025

[Kyle Larkin]

I don't have a specific stat for you on how much product has come back into Canada from the U.S., but I can tell you that over $17 billion of grain and grain products go to the U.S. Some of that is used for their own domestic market, but a lot of that gets manufactured into something else that then gets exported back up here into Canada.

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

Don't you think the grain we want to consume could be processed here?

[Kyle Larkin]

It's a good question. It's really a question of supply chains and labour forces. There are obviously a lot of technicalities at play there. The U.S., because of its size, has a much larger grain and grain product market than we do. They obviously produce more grain than we do, so they have domestic market forces that allow some of their value-added processing to take place.

There's always an opportunity for that to grow in Canada, and it is growing. When you look around the greater Toronto area, for example, there are growing plants, mills and bakeries that consume a lot of our wheat products from across the country, most of which is coming from the Prairies.

If you look at the Prairies, you have many success stories of value-added products, like pulses creating pea starch and pea protein. Canola is probably the biggest success story, with the amount of canola crushing we've been able to develop across the Prairies over the past few years. Now we're opening up biofuel refineries in Canada so that we can really create a circular economy where we grow the canola, crush the canola and turn it into biofuel, and then that biofuel is used by a farmer or by a Canadian. It's a slow-growing success story.

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

That's interesting.

You're talking about value-added products. Have things changed since January, as a result of all the tariffs imposed by the President of the United States on a variety of products? This decision has hit the Canadian public hard. In response, people began to check the origin of the products they were buying to see if they came from Canada. Has that had an impact?

[Kyle Larkin]

Not necessarily...only because of the integrated supply chains between Canada and the U.S. At the end of the day, most, if not all, grain or grain products that Canadians buy at the grocery store are made with Canadian grain. If you go to the grocery store right now and buy a box of cereal or even just a bag of flour, it will have been produced from Canadian wheat.

We have a success story already of using our grain and grain products within Canada, but the other success story is that we produce more than we need here in Canada. That's why we export 45 billion dollars' worth internationally.

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

You also piqued my curiosity earlier when you said that there were no tariffs on grain we export to the United States, but that you were going to be affected by the rising price of equipment, mainly because of the tariffs on steel. To what extent will this affect you?

[Kyle Larkin]

That's a great question. I did mention how the steel and aluminum tariffs could impact farmers on the equipment side of things. At the end of the day, the most popular brand in Canada and the U.S. for equipment—combines, tractors, etc.—is John Deere. For those who have been on the prairies, you would have seen their green equipment. John Deere equipment is primarily manufactured in the U.S., and they use a lot of American steel and aluminum, but they also use a lot of Canadian steel and aluminum. Because of the tariffs back and forth between our two countries, we're already seeing an increase in pricing on that equipment for American consumers. We're likely going to see it for our Canadian farmers as well in the foreseeable future, only because of the tariffs that are between our two countries.

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

Okay, but it only affects equipment, and it's equipment that you don't have to change every year, since it has a certain lifespan.

[Kyle Larkin]

It depends on the farmer. Some farmers change their equipment every year; some farmers change their equipment every four years, and some every 20 years. At the end of the day, we're likely to see a price increase on equipment, and on some that already costs in the millions of dollars. You'd be lucky to find a combine or a tractor that's under $1 million brand new. When they're purchasing equipment, a lot of it has been manufactured in the U.S. It's not just John Deere; it's CASE and other equipment companies as well. They're likely to see a price increase at a time when farmers are seeing a decrease in the prices they're getting for their crops. They're very much in a tight-margin situation where I'm seeing lots of grain farmers actually losing out on revenue this year.

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

Thank you, Mr. Larkin.

Ms. Gee, you talked about diversifying our free trade agreements. We have a lot of them. Which ones do you think hold the most promise for the shipping industry?

[Bonnie Gee]

We operate in global markets, so we rely on free trade agreements around the world. Certainly the CUSMA one has less of an impact for international carriers, as they tend to use railways to deliver those goods. Certainly there are agreements with the Asian nations, which would be very important for us.

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

Thank you.

[The Chair, Liberal, Judy Sgro]

Thank you very much.

We have Madame DeBellefeuille, please.

[Claude DeBellefeuille, Bloc, Beauharnois—Salaberry—Soulanges—Huntingdon, QC]

Thank you, Madam Chair. I'm honoured to be asking questions with you in the chair.

Thank you to the witnesses.

Mr. Trew, my questions will be for you.

It's good to hear from you. This is not a discourse we're used to hearing. You bring a different perspective on international trade.

You regularly talk to us about adopting stricter measures to ensure that companies are doing their due diligence. In your opening remarks, you said that you would like the ombud for responsible enterprise to have more powers to take action with rogue companies or ones that need to be brought into line.

Can you give us a little more detail on the powers that the ombud for responsible enterprise might have?

[Stuart Trew]

Thank you for the question.

I'm not a specialist in the CORE. I do know that the position is empty now. We need to fill that position. We currently don't have an ombudsman looking into the activities of Canadian companies abroad. A number of organizations have been pushing for that for a while, to strengthen that and to give it more investigative powers, the ability to force testimony from companies and so on. It's been quite a voluntary process so far. That is very much part of the rules-based trading order that I think would actually improve things, not just for people, but for companies themselves to provide some kind of certainty.

First and foremost, we need to get that position filled, and then we need to start talking about giving the CORE more responsibilities, more investigative powers and more ability to hold companies accountable for their actions abroad. I believe this has come up at this committee a couple of times.

[Claude DeBellefeuille, Bloc, Beauharnois—Salaberry—Soulanges—Huntingdon, QC]

I imagine it's urgent. We know that the position is unfilled. Not only does the ombud not have enough powers, but there's no concern about filling the position quickly.

Between January 1, 2024, and June 25, 2025, out of 34 shipments intercepted in Canada due to suspected forced labour, only one was found to contain goods produced in whole or in part by forced labour, and it was from the Xinjiang region. However, during the same period, several thousand shipments were intercepted for that reason in the United States.

Currently, measures are in place to prevent products made with forced labour from entering our supply chains, but they seem to be weak.

In your opinion, is the Canadian control system sufficient to prevent products made with forced labour from coming in?

[Stuart Trew]

Thank you again for the question.

Evidently not. I don't know if it's mainly a resource problem. We don't have the resources that the United States has to intercept and investigate these issues of forced labour in supply chains. It's certainly going to come up in the CUSMA review. At some point, the United States will probably be pushing Canada and Mexico to do more to stop imports from some regions, especially China but also perhaps other regions. We will be asked to pick up more of the slack, so it is an important question about how we do that. I think we could have more transparent information maybe, more shared databases with the United States in terms of importers and giving that information to people outside of government, perhaps, and outside the business sector, which could help in the investigations and bring cases forward.

I was mentioning in my presentation the rapid response labour mechanism in Mexico, and this is how that operates. It has been so successful because is it's based on investigations that are started by workers themselves in the factories and then followed through on through the institutions established through the Canada-United States-Mexico Agreement.

I can envision that as quite a positive thing for workers and human rights in terms of the CUSMA review.

[Claude DeBellefeuille, Bloc, Beauharnois—Salaberry—Soulanges—Huntingdon, QC]

Do you think we could instead proceed through legislation, that is to say create a law that would force companies to prove that they don't use forced labour to produce their goods? Should Canada be moving in that direction and putting legislation in place?

[Stuart Trew]

Yes, absolutely, I think this thing should be legislated. I do understand, though, that it is difficult to determine in supply chains everywhere. Supply chains are quite complicated and vast, and they cross multiple countries, so it can be difficult even for companies to find that out. Sometimes they don't necessarily know if there are human rights violations in their supply chains. Therefore, this thing should be legislated, absolutely, but there may be some role for government in facilitating the evidence gathering, which would help companies to then abide by that legislation. I think that's absolutely reasonable.

[Claude DeBellefeuille, Bloc, Beauharnois—Salaberry—Soulanges—Huntingdon, QC]

Do you think Canada is lax when it comes to forced labour? Do you think it is not making all the necessary efforts, particularly in terms of verification, to prevent these goods from entering Canada? We can see that there is a big difference compared to the United States. Why is Canada tolerating this?

[Stuart Trew]

That's a good question, but I don't know the answer.

Absolutely, it's clear that we need to be doing more to do this, not just in China but also in many other countries. We have versions of forced labour in Canada, too. There have been UN studies done, and whether they're in the agricultural sector or elsewhere, there are problems here that we need to address as well. Yes, absolutely, with respect to imports, our biggest trading partner expects us to be doing more, and we certainly could be doing more.

[The Chair, Liberal, Judy Sgro]

Thank you very much.

We'll move on to Mr. Chambers, please, for five minutes.

[Adam Chambers, Conservative, Simcoe North, ON]

Thank you, Madam Chair.

Mr. Larkin, welcome back to committee. Thank you for being here. I want to thank our other witnesses, as well, for joining us.

I'll start with Mr. Larkin for a couple of questions.

How hard is it to enter a new market? When the government signs a free trade deal, how hard is it to start selling our goods there?

[Kyle Larkin]

It's hard.

[Adam Chambers, Conservative, Simcoe North, ON]

It's very hard.