International Trade Committee on Oct. 9th, 2025

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

The Bloc Québécois shares your opinion and has introduced a bill to that effect. It is important that the free trade agreements that are negotiated be subject to debate and transparency.

We will soon begin analyzing the Canada-United States-Mexico Agreement, or CUSMA. In your testimony, you talked about the need to protect workers as well as a rapid response mechanism in Mexico.

Could you provide us with more details on this mechanism in connection with CUSMA?

[Stuart Trew]

This is a priority for our organization. It's a priority for Mexican labour unions and for United States labour unions as well.

The rapid response labour mechanism in the Canada-U.S.-Mexico Agreement has seen a number of successes. It's been used at least 40 times, as I understand it. Through investigations of facilities directly brought on by workers in those facilities, with help from the United States and Canada, it has resulted in employees being reinstated and votes being redone—for certification of unions, for example, because we know there are a lot of corrupt unions in Mexico that will try to undermine the rights that employees have to free collective agreement and bargaining and freedom of speech. It has been a success, and groups in Mexico are hoping that it is extended in the review.

We understand from the United States Trade Representative—not directly from them, but in hearing from people they are talking to—that they are also interested in keeping this process as part of the Canada-U.S.-Mexico Agreement, and perhaps making it better in terms of being faster and more accountable.

We're worried the talks are going to split into three—U.S.-Canada and U.S.-Mexico—at which point we lose some control over that in terms of the Canadian government and the Mexican governments working together to improve that mechanism. We would like to see Canada insisting on that, starting the conversation now with the Mexican government. Hopefully we can keep it as a three-way to increase Canada's leverage in those talks.

There is very much agreement in the United States that this is something we could keep, and I would like to see Canada adopting it as its own policy and putting it in agreements, like the one we have with Indonesia, but they didn't. We don't have a rapid response mechanism in Indonesia, where forced labour and child labour are rampant, as we know, in supply chains.

[The Chair, Liberal, Judy Sgro]

Thank you very much.

We go now to Ms. Gladu for five minutes.

[Marilyn Gladu, Conservative, Sarnia—Lambton—Bkejwanong, ON]

Thank you, Chair.

Thank you to the witnesses for appearing today.

My questions will be through the lens of trying to increase Canada's exports and the diversification of the exports, and I'm going to start with Mr. Larkin.

The government has already done so much to punish the grain industry in terms of fertilizer tariffs, fertilizer limitations, the clean fuel standard, etc., and now we have things outside of our control, like the Chinese tariffs. What do you see as being the biggest barriers to increasing Canada's exports and continuing to diversify them?

[Kyle Larkin]

There are many barriers, but thank you for the question.

We spoke earlier about trade-enabling infrastructure. I think that's one of the largest barriers that we face, these major choke points, not only at the port of Vancouver but all across our rail lines as well. Over 90% of the grain grown in the Prairies is moved and exported by rail, so we have to ensure that our rail systems are aligned and working well. Then we have to make sure that our ports, including the port of Vancouver but also ports out east, are operating at their full capacity.

We have competitors around the world that are investing billions of dollars in their individual ports. I'll reference one port. I won't name the country and I won't name the port, but there is a port somewhere in the Indo-Pacific that is owned by a private company, by one individual. That port is more sophisticated and more innovative than all of our ports here in Canada combined. That port is owned by one individual, so that just showcases how far behind we are in our trade-enabling infrastructure and how we have to invest in it today and well into the future.

[Marilyn Gladu, Conservative, Sarnia—Lambton—Bkejwanong, ON]

Thank you for that.

I do see that we have pinch points in our ports across the country, both in Vancouver and at the port of Montreal.

Ms. Gee, can you speak to what we need to do from a ports perspective, not just the large ones that exist but maybe potential other ports across Canada, to increase our ability to export internationally?

[Bonnie Gee]

I can speak to the Canada Marine Act and the way that ports are governed. Currently, ports can't collaborate or work together. We find that they compete, and they don't necessarily optimize how they can share resources or share land capacity that they might have. We feel there needs to be a review of the Canada Marine Act and modernizing the ports. There was an initiative under way several years ago. We haven't actually finalized that process.

[Marilyn Gladu, Conservative, Sarnia—Lambton—Bkejwanong, ON]

I think that's true. There's the port of Sarnia, and there's Thunder Bay. There are a number of ports on the Bay of Quinte that have access to the St. Lawrence Seaway. It would be a really good idea to expand and increase their capacity in order to expand our exports.

I have another question for Mr. Larkin. This has to do with the trade agreements we have and the harmonizing of specifications. It appears to me, with agreements like CETA, our agreement with the U.K. and some of the other ones, that we are willing to accept their products even though they don't meet Canadian specifications, but they are unwilling to accept our products.

Can you give us some examples of where you think we should be prioritizing the work to harmonize those specifications?

[Kyle Larkin]

That's a great question.

I'll give you a concrete example. One of the largest consumers of durum wheat in the world is Italy, because they consume a lot of pasta, which is manufactured with durum wheat. The challenge there is that they don't want to use Canadian durum wheat, which is top-grade and the highest quality in the world. They would rather use their own durum wheat, even when they run out of their own durum wheat. There's a major issue there of their putting up non-tariff barriers that disallow Canadian durum wheat from entering the Italian market, and that impacts farm revenues at the end of the day. That's one concrete example where non-tariff barriers impact farmers. There are numerous examples, not just in Europe but around the world, of non-tariff barriers impacting the trade that we could potentially do with these markets.

[Marilyn Gladu, Conservative, Sarnia—Lambton—Bkejwanong, ON]

I agree.

One other thing that was on my mind has to do with CUSMA and the trade that we're doing there. I'm wondering if there are any issues in that agreement related to this harmonization of specifications, where we're taking materials from the U.S. in the agricultural food industry but they're not reciprocal.

[Kyle Larkin]

I'll give you a concrete example, not from the U.S. but from our other CUSMA trading partner, Mexico. We want to export more cereals like wheat and barley to Mexico, but they have certain sanitary and phytosanitary standards that do not co-operate with what the U.S. and Canada do; therefore, they're requiring all of those exports to be fumigated, which makes exports to their market extremely inefficient. That really impacts the amount that we can export to Mexico on a monthly or an annual basis. That's one small example of where there's no regulatory alignment between two trading partners within CUSMA.

With the U.S., we're fairly aligned, only because of how integrated the supply chains are between Canada and the U.S. but, at the end of the day, regulatory co-operation can always be enforced and always be strived for.

[The Chair, Liberal, Judy Sgro]

Thank you very much.

Mr. Lavoie, you have five minutes.

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

Thank you, Madam Chair.

Mr. Larkin, since the beginning of the meeting, you've talked a lot about the Port of Vancouver and a bit about the Port of Montreal. My riding, Beauport-Limoilou, is located in the Quebec City region, where a lot of grain is transported. You talked a lot about grain. In a way, the Quebec City region is the entryway to the St. Lawrence River. It's the main gateway to North America, as I like to say. Can it play an additional role in diversifying our market toward Europe?

Last week, a witness told us that only 5% of exports by ship went to the United States. Therefore, we're thinking more about market diversification on the European side.

Can the regions of Quebec City and eastern Canada, including Montreal, play an additional role in diversifying markets, such as European ones?

[Kyle Larkin]

I was at the port of Quebec City in July. I saw the grain terminal and the infrastructure there first-hand. I was happy to see that Parrish & Heimbecker recently purchased a grain terminal there. They have big plans to grow that grain terminal because of the demand they see in markets out east. It's not just Europe; it's northern Africa, and it's also going down south to South America.

There are some great opportunities for growth. I'll give the great example of Morocco, which is one of the largest consumers and manufacturers of couscous in the world. How do you manufacture couscous? Again, you need durum wheat. Canada is one of the largest manufacturers and suppliers of durum wheat around the world. We can certainly produce more, and we can export more, but, again, our infrastructure needs that attention, not just in Vancouver. The port of Quebec City is another great example.

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

Thank you, Mr. Larkin.

Ms. Gee, I'd like to continue talking to you about marine transportation. As I just mentioned, I represent the riding of Beauport—Limoilou. Obviously, the Port of Québec is an important player in marine transportation in Canada.

I'm thinking about the supply chain and what's happening in the United States. Canada is currently looking at market diversification. You talked about that, as well as predictability.

Where in Canada's supply chain should investments be considered to realize our vision for the future? If you have any concrete examples to give us, it would be useful to hear them.

[Bonnie Gee]

Everyone talks about infrastructure but, from my perspective, I always think about maritime domain awareness, and I was very pleased to see the Coast Guard being moved from Fisheries and Oceans to the Department of National Defence. Certainly on the west coast, we deal with a number of indigenous groups, and they all have an interest in the waterways in which we operate.

In terms of what we need, I think we need good baseline data. When we talk about major new projects, we'll be faced with baselines and cumulative effects that we'll have to manage for any increased traffic. I think we need more data on the shipping side of things. There's a significant amount of ocean science, but we all need to make sure that we agree on what the baselines are. We also need more digital infrastructure.

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

You're saying that, in terms of marine transportation logistics in Canada, we need to invest more in digital structures than in physical structures. Is that correct?

[Bonnie Gee]

That's correct.

Certainly, when we deal with the federal government, we're dealing with multiple departments that don't co-operate. There's a lot of repetition and redundancy in reporting to the federal government. We're not maximizing the efficiency and the opportunities within the government to have a single window where we can best manage vessel arrivals and clearances.

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

Mr. Trew, since I have a bit of time left, I'm going to ask you a question.

In your introduction, you said that compromises had to be made in the negotiations. What kind of compromise seems reasonable to you in order to get good deals for Canada in the negotiation of future agreements?

[Stuart Trew]

Thank you for your question.

As I was trying to explain in here, flexibility is what we need to be thinking about.

The World Trade Organization is there. The disputes, as we know, are not going anywhere. They go to the end of the dispute process, and then they get appealed into the void.

Previous witnesses before this committee have said that the old rules order is in a lot of trouble. The United States has pretty much put the final nail in that coffin.

The compromise is that we have to accept that.... I understand there are issues around durum access, for example, in Italy, but for the Italians, it is a reasonable policy that they want to use Italian durum wheat first. We talked about breakfast cereals here; it is a reasonable policy. It's maybe not ideal, or optimal, as they say in market terms, but these are political realities that we have to deal with. People have democratic, political realities. They want to develop their own industry. They can't be having someone from, say, the trade law department of your government saying constantly, “Well, we can't do that, because it says you can't do that here in this agreement,” which nobody is really enforcing anymore because the rules are in flux.

If we're going to survive this period, we obviously have to work with like-minded governments. There's a rise of authoritarianism around the world, and we can't be working toward that direction, but we can work with like-minded governments on compromise around trade policy—negotiated outcomes, maybe, more so than rigid dispute settlements that result in the rules being followed to a T, with everyone trying to benefit as much as they can and work through how they're going to produce jobs here and basically govern in the way they see fit.

[The Chair, Liberal, Judy Sgro]

Thank you very much, Mr. Trew.

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

Thank you.

[The Chair, Liberal, Judy Sgro]

Thank you to all our witnesses. I will suspend for a minute or two so we can change panels and get reconnected.

Thank you all very much for your valuable information, and happy Thanksgiving, by the way.

[The Chair, Liberal, Judy Sgro]

I'm calling our meeting back to order.

As an individual, we have David Collins, professor of international economic law, by video conference.

From the Canadian Cattle Association, we have Tyler Fulton, president, and Dennis Laycraft, executive vice-president.

From the Canadian Steel Producers Association, we have François Desmarais, vice-president, trade and industry affairs.

Thank you all very much for finding time to come and speak to the committee today. It's a very important time, and we appreciate your commitment to coming to the committee.

Mr. Collins, I invite you to make an opening statement of up to five minutes, please.

[David Collins, Professor, International Economic Law, City St George's, University of London, As an Individual]

That's great. Thank you very much.

My name is David Collins. I'm a professor of international economic law at City St George's, University of London. I'm from Canada, and I have been in the U.K. about 20 years. My main perspective on world trade and investment law, which are my areas of speciality, tends to be from the U.K., but I've always kept an eye on Canada and on global affairs generally in terms of trade and investment.

I'd like to start by saying that I often find myself being asked about the economic impacts of trade wars, trade tariffs and so on. I feel confident that I can comment on that, but I'm a lawyer, so I'm more interested in the international legal implications and the question as to whether what we're witnessing in terms of the onslaught of protectionism—tariffs in particular—is legal under international law.

The short answer is that it is not. Much of what we have seen, specifically coming out of the U.S. but not only the U.S.—we've seen this from China, the EU, India and other places—probably violates the bedrock of the world trading system that was formulated in the 1940s under GATT, which would later become the World Trade Organization, and that spread into all these regional trade agreements. Most notable, from Canada's perspective, is the USMCA or CUSMA, as well as these mega-regionals like the CPTPP and so on.

We're obviously in a very fraught time in world trade. Tariffs globally have never been this high. They're the highest they've been since the end of the Second World War, and we're seeing a lot of moves toward protectionism, again from the U.S. in the forms of tariffs, but also things like export controls and these really sticky non-tariff barriers, such as non-recognition of quality assessment procedures and so on, which I think the EU is particularly known for.

One of the side problems with the U.S. tariffs is that they have caused a glut of a number of commodities—such as steel, aluminum and others—around the world, and the surplus, which is typically coming from China, has been dumped into other countries. This is causing these countries around the world in tandem to impose trade barriers, most noticeably what the EU has done only in the last 48 hours by announcing all these tariffs.

These are a violation of the principles of the GATT. The main justification cited for these measures.... Again, we tend to associate this with the U.S., especially in Canada. We look at the U.S. as the largest trading partner, and we see what's coming out of Washington. This tends to be justified on the basis of national security, and under domestic U.S. law, it's the section 232 tariffs.

If you translate that into international law, this is article XXI of the GATT. This was drafted a long time ago, in the 1940s, and the language of the GATT is notoriously self-judging. That means that a member state of the World Trade Organization can designate whether it feels that it is having an essential security threat as a consequence of its free trade commitments under the GATT, and there is a similar provision under the GATS, which is the services agreement.

The problem with that provision is that, especially in the last five years or so, it has really been exploited. Countries around the world—particularly the U.S., but also others—have been using this as a justification to impose trade barriers for all kinds of things. You might make an argument plausibly for steel, aluminum and so on, but there are all kinds of commodities now. In theory, the way it is framed leaves it beyond the scrutiny of the international tribunal, specifically the World Trade Organization panels.

We do have a case under the WTO that tells us that these decisions can be scrutinized for essential security, but it's a very light-touch scrutiny, and panels tend to allow countries to follow through with this. Even if they didn't, there's not much in the way of enforcement provisions under the WTO.

In the time I have left—because I have a feeling I'm probably taking longer than I think I am—