International Trade Committee on Oct. 9th, 2025

[The Chair, Liberal, Judy Sgro]

You have 30 seconds.

[David Collins]

—I want to quickly mention investment, which is, of course, the other big element of the world economic system.

There has been a noticeable increase in foreign investment barriers around the world. These tend to appear in domestic legislation. The Investment Canada Act was one of the forerunners of this. The EU has it. The U.K. has it, and the U.S. has it. There's a concern that these are also being used extensively, and the investment treaties have the same essential security provisions generally, which are, again, self-judging.

Countries are using national security to effectively engage in protectionism, and this is creating a cascade effect around the world and causing a lowering of living standards everywhere, including in Canada—perhaps especially in Canada because of its reliance on the U.S. so much.

[The Chair, Liberal, Judy Sgro]

Thank you very much, Mr. Collins.

We'll move on to Mr. Fulton, please.

[Tyler Fulton, President, Canadian Cattle Association]

Thank you, Madam Chair and members of the committee. On behalf of the Canadian Cattle Association, thank you for the opportunity to speak to the committee on the critical need for rules-based trade.

As mentioned, I'm president of the Canadian Cattle Association. I have a beef operation just outside of Birtle, Manitoba.

Through our nine provincial members, CCA represents more than 60,000 beef producers across the country. As many of you already know, trade is a key part of our business. Approximately 50% of what we produce is exported to markets around the world. Because of progressive trade deals with countries that also value rules-based trade, we're able to add about 40% of value to each animal.

The Canadian Cattle Association has always stood up for free and fair trade, working with the Government of Canada and other stakeholders, including the WTO, which is the international body to promote rules-based trade. Over 98% of global trade falls under WTO rules or between WTO partners. CCA has always supported the work our government does to ensure a strong WTO. Rules-based trade has provided the stability necessary for business to trade around the world.

Today's context looks different from 20 years ago, but the role of the WTO remains. We need Canada and like-minded countries to continue to defend international rules-based trade.

It starts by standing up for Canadian businesses that have been discriminated against, such as what our sector is currently facing in China. Since 2021, Canadian beef has been shut out of China due to unjustified trade action. We have mentioned at a previous committee appearance that we support the government starting discussions at the WTO to remedy our long-standing market access challenges. It's critical for Canada, an export-driven economy, to defend Canadian interests and stand up to countries that are not following the rules-based trade. Working with allies that share the same standards for science- and rules-based trade is key for us to diversify trade.

The U.S.A. is our largest export market by far, and we look forward to the opportunity to appear before your committee to speak more specifically on CUSMA.

In the context of today's study, it's pertinent to share this. Earlier this year, the U.S. administration put out a report on non-tariff barriers impacting their exporters. The barriers impacting the U.S. beef producers with third countries are the same barriers that Canadian producers face. We will be stronger economically if we work with the U.S.A. to address these barriers and ensure that trading partners are upholding science-based trade as the foundation of trade.

It is in this context that I flag to the committee a significant concern regarding potential trade with Mercosur. The government announced earlier this fall that Canada would be advancing the resumption of the Canada-Mercosur free trade agreement negotiations. Canadian beef producers are on high alert regarding any potential agreement that would allow further access from four of the top eight global beef-exporting countries into our Canadian market. We cannot support any deal that includes beef access to Mercosur. Not only would it displace Canadian beef in our domestic market, but it would bring new challenges for us with our number one trading partner, which has been very clear about how it feels about trade with Mercosur.

We ask parliamentarians to stand up for Canadian beef and our trade opportunities, and focus on trade diversification discussions with countries that hold the same international rules that Canada follows.

There is a lot of global demand for beef. When we travel internationally, particularly in Asia, we hear of the demand specifically for high-quality, grain-finished beef, which is exactly what we have to offer here in Canada. It's because Canada follows science-based trading rules that our Canadian beef is sought after as a reliable, high-quality ingredient.

I'll end my comments on this note. As an industry, Canadian beef producers are excited about the potential trade diversification growth. Many opportunities are coming through our progressive trade agreements like CPTPP, where, outside the U.K., evidence-based trade is the standard.

To achieve Canada's trade diversification goals, we need to work together, as government and industry, to ensure that rules-based trade maintains the standard.

I look forward to your questions.

[The Chair, Liberal, Judy Sgro]

Thank you very much, Mr. Fulton.

We move to Mr. Desmarais, please, for up to five minutes.

[François Desmarais, Vice-President, Trade and Industry Affairs, Canadian Steel Producers Association]

Madam Chair and honourable members of the Standing Committee on International Trade, on behalf of the Canadian Steel Producers Association, thank you for inviting me today. It's always a privilege to appear in front of you and to have the opportunity to present the views of our industry on various matters, such as this important one on Canada's engagement in a rules-based international trade and investment system.

Over the years, many of you heard us repeat that the situation is dire for the Canadian steel industry, and today is no different. In many regards, it's getting worse. The international steel trade market has dramatically embarked on a unique path for the past 20 years, marked by unfair practices, dumping, circumvention and protectionism. These heavy trends have been accelerating in recent months.

Since March, we've been facing crippling tariffs imposed by the U.S. administration on our steel crossing the border into our largest market, and these tariffs were later raised to 50% this past June. We are also seeing our Canadian manufacturers and customers being impacted if they dare to use Canadian steel to manufacture their goods and sell them in the U.S., because of the extension of the tariff to derivative products. This has practically shut down our access to the U.S. market.

To put things in perspective, last year we exported six million metric tons of our primary forms of steel to the U.S., which is worth about $10 billion Canadian. As every single month passes by, we export less. We're at 50% of the monthly volume we used to be at, and it's diminishing rapidly.

Make no mistake: U.S. actions, under section 232 for steel and steel derivatives, are not driven by the behaviour of our Canadian producers. They are driven by the global industrial overcapacity in the steel sector, mainly coming from China, which doesn't play by the rules. The Americans have taken unilateral action because no international trade organization has been effectively equipped to address overcapacity, especially in the steel sector.

We are facing unfair trade practices in Canada too.

The Canadian steel industry is the canary in the coal mine. Our industry is the largest user of the trade remedy system. Of the 55 trade actions enforced by the Canada Border Services Agency, 39 are related to steel products or products that contain steel. It amounts to 70% of all countervailing duties. Obviously, we have a problem. In addition, 60% of all steel dumping cases in the country are related to China.

How do we fix global overcapacity, then? The U.S. have been using their sections 232 and 301 to protect their domestic industry for years, and not just for the steel industry. As for the Europeans, they announced this past Tuesday that they will impose a tariff rate quota on all imports of steel, including from free trade partners, and replace the safeguards they've been using for many years. The EU policy is, in many regards, similar to what Canada adopted this summer. One of the significant differences, though, is that they will limit imports from their free trade partners to 47% of the levels of last year, while Canada has the limit at 100%.

Furthermore, our tool kit needs improvement too. As an example, our anti-circumvention legislation needs modernization. We need to do better at addressing unfair trade practices coming from the non-market economy, as well as adapting section 53 of the Customs Tariff act to put in check new egregious trade manoeuvres.

Madam Chair and members of the committee, thank you again for hosting the CSPA today. I look forward to answering your questions.

[The Chair, Liberal, Judy Sgro]

We thank all of you very much.

I now open the floor to questions from the members.

Mr. Chambers, please go ahead for six minutes.

[Adam Chambers, Conservative, Simcoe North, ON]

Thank you, Madam Chair.

Welcome to all of our wonderful witnesses, and those joining us online as well.

Mr. Fulton, I have a couple of questions for you. You mentioned non-tariff barriers. My understanding is that U.K. beef exports to Canada have recently surged quite high—I think well over 170%, as I understand it. Is that correct?

[Tyler Fulton]

I'm not certain of the percentages, but yes, absolutely, that's been the trend over the course of the last three years.

[Adam Chambers, Conservative, Simcoe North, ON]

How have beef exports from Canada been to the U.K.?

[Tyler Fulton]

They are unchanged, at zero.

[Adam Chambers, Conservative, Simcoe North, ON]

We obviously have an issue. We have a trade agreement, and we're supposed to abide by the rules, but there are also these non-tariff barriers, as we discussed, that prevent Canadian producers from accessing that market. Yet, reciprocal access is not actually occurring. That's in fact happening today.

[Tyler Fulton]

That's exactly right, yes.

[Adam Chambers, Conservative, Simcoe North, ON]

Is that the risk that you're highlighting, or the concern that you have with agreements with Mercosur or others, that we can sign a trade agreement but we could be in the same situation, where we have stuff coming in but we can't have our stuff going out?

[Tyler Fulton]

I think that's a valid concern, 100%. The focus of our concern is the possibility of Canada becoming a bit of a dumping ground for a South American product that may be a backdoor access into the U.S. I want to be extremely clear about this. Our American counterparts have made it explicitly clear that they're watching, with a very watchful eye, for that origin product coming through back channels into the United States. That poses a very significant risk to the trade that we currently benefit from with the U.S. We can't put that at risk.

Further to that, there's another issue that quite simply is of a comparable level, and that is that we don't have confidence in things like the disease surveillance systems that are in place in South America. They have a track record of having dubious reporting and surveillance mechanisms that quite simply do not meet the standard that we've become accustomed to.

[Adam Chambers, Conservative, Simcoe North, ON]

Thank you very much.

Just so I understand, beef could come in from another country, not just to displace Canadian beef here but also to find its way into the U.S., which would challenge our relationship with the Americans, the largest trading partners of your producers.

[Tyler Fulton]

Yes, that's exactly right. Currently, the U.S. represents $6 billion of $7 billion in exports of beef. Of course, over and above that there's the live cattle trade. That's what is at risk if we start seeing a significant flow of beef into Canada. This is notwithstanding the disease-related risk, which quite simply is not measurable.

[Adam Chambers, Conservative, Simcoe North, ON]

Thank you very much. I appreciate your testimony in highlighting those risks for us as we consider other potential agreements and discussions that the government might have.

I have under a minute left.

Mr. Collins, do you have an opinion on whether the section 232 tariffs are in fact legal? Do you have a view that it's Congress's legal right to impose something that looks like a sales tax? Is that something you would have an opinion on?

[David Collins]

Well, I have to say that I'm not an expert in U.S. law, although I am admitted to the New York bar. My expertise, to the extent that I have it, is in international law. However, from what I've read, my sense is that they're probably not legal under U.S. law, and it looks like the courts in the U.S. are probably going to rule that they are indeed illegal. These are powers that fall into the hands of Congress, not the President. That's my sense, but I wouldn't claim to be an expert in U.S. law.

[Adam Chambers, Conservative, Simcoe North, ON]

I'll take that as great advice. Thank you very much for your testimony.

Thanks, Madam Chair.

[The Chair, Liberal, Judy Sgro]

You have 53 seconds remaining.

[Adam Chambers, Conservative, Simcoe North, ON]

Oh, that's perfect. I have extra time.

Mr. Collins, I'll just stay with you. You mentioned the international scene and the changing impacts of investment. What would you say are the risks to Canada from what you're seeing today in terms of the changing dynamic in the world?

[David Collins]

The main risks from the perspective of Canada are to Canadian investors going abroad and seeking to invest in foreign markets, particularly the EU, which seems to be taking quite a stringent approach to these national security issues. That's going to differ by member state, and this is very much a member state power. My concern would be for Canadian companies seeking to invest overseas in countries that are being really strict about their investments.

To take another example, China has a new foreign investment statute. Over the years, China has somewhat liberalized its foreign investment regime. Their restricted list has gotten smaller and smaller, but it's still quite significant. They could easily impose joint venture obligations—or worse, technology transfer obligations—and they could end up stealing intellectual property.

Going the other way, of course, the other risk is that companies coming into Canada might find that the Investment Canada Act is too strict and actually bars companies that want to maintain their presence in Canada, contribute to the Canadian economy and increase competition, perhaps in sectors like telecoms and so on. From the perspective of the Canadian consumer, we would want to have more foreign investment in Canada, more liberalized, to increase competition and consumer choice.

It's a fine balance to get national security right, to protect Canada's national security, but also to allow foreign companies that can increase the competitive environment and make the Canadian markets more dynamic.

[Adam Chambers, Conservative, Simcoe North, ON]

Thank you very much.

[The Chair, Liberal, Judy Sgro]

Thank you very much, Mr. Collins.

Mr. Naqvi, go ahead for six minutes, please.