International Trade Committee on Oct. 23rd, 2025

[Adam Chambers, Conservative, Simcoe North, ON]

It's not like the industry has not achieved emissions reductions over the last 20 years. My father still drives an old Toyota 4Runner from the early 2000s. That same vehicle today is probably 30% to 40% more fuel efficient with the existing framework.

[Tim Reuss]

That's absolutely correct.

The good thing is that when you look at the actual marketplace, this is being achieved by different sets of technology. You have certain manufacturers optimizing to an extreme the internal combustion engine. I don't want to necessarily promote one manufacturer over another. Certain manufacturers do it by reducing emissions, reducing the weight of the vehicle and using other composite materials on the vehicle to get the emissions and consumption down. Others do very well with fully electric vehicles. Other manufacturers do very well with hybrids in different iterations.

[Adam Chambers, Conservative, Simcoe North, ON]

Our job is to make recommendations to the government. You would recommend to repeal the mandate totally. That's your testimony.

[Tim Reuss]

That's right. It is unnecessary.

[Adam Chambers, Conservative, Simcoe North, ON]

Are you in favour of reducing the tariffs on Chinese electric vehicles?

[Tim Reuss]

Regarding the reduction on Chinese vehicles, that is a discussion to be had with the manufacturers on where they currently stand on that topic.

We would like to outline an example from a different part of the world, what we called the Australia scenario, which we transmitted, in our trade mission in Washington, to the U.S. senators whom we met and our counterparts. When Australia no longer had an automotive manufacturing sector—the last one to pull out was General Motors with the Holden brand it had there—the Australian government was faced with a choice. It could longer protect the jobs on the automotive manufacturing side, so what did it do? It tried to achieve maximum affordability for consumers by opening up the market. That has led to Chinese brands having about 18% to 19% of the marketplace in the last five years.

[Adam Chambers, Conservative, Simcoe North, ON]

Thank you, sir.

I think we're well over time. I appreciate the chair's indulgence.

[The Chair, Liberal, Judy Sgro]

Thank you.

Mr. Fonseca.

[Peter Fonseca, Liberal, Mississauga East—Cooksville, ON]

Thank you, Madam Chair.

Thank you to all of our witnesses. We've had some really excellent and expert witnesses here providing testimony.

We approach this committee as team Canada. For everything that comes to this committee, the recommendations are to make us stronger and more competitive as we get into the CUSMA review, as we look at our economy and as we look at diversification.

I want to thank all the witnesses that are here. We have the Mississauga Board of Trade and good friend Trevor McPherson. Trevor is somebody who is always there to make those linkages between business and government. He tries to find ways to take away that friction and to overcome some of those challenges, and he always looks for those opportunities. I know there have been many.

Trevor, looking at all the diverse businesses that we have in Mississauga...and you said we have large businesses, some of the Fortune 500 companies, all the way down to our small and medium-sized enterprises. We are celebrating and championing those enterprises because it's Small Business Week here in Canada.

Where have those businesses, whatever their size, been resilient with innovation and been able to adapt and continue to grow, especially in these turbulent times?

[Trevor McPherson]

There are definitely some areas of real promise and some sectors that are doing quite well. Think of Mississauga's technology sector right now, employing 44,000 individuals and approaching 1,000 companies, both large and small, across the board. In many cases, they're less affected when they're on the software and service side. We have homegrown companies like PointClickCare in Mississauga, which has dominated its niche market in health care and been a true success story.

We have a really strong food-processing manufacturing sector here—the large companies we know but also some very specialized companies like Brar's. They were serving the Canadian market. They recently ventured into the U.S. market before the tariffs really took effect. Because there's real opportunity, we've been working with them to reach out to our counterpart chambers of commerce in the states they're doing business in.

In terms of growth opportunity, a lot of the opportunity for Mississauga can be tied to some of these major infrastructure projects. We are going to see a big expansion of the Toronto Pearson Airport. They're going to require a lot of suppliers, and they'll be looking for Canadian suppliers, as many large enterprises are. We're also embarking on the largest hospital build in Canada. We have a number of companies.

When I think of sectors in Mississauga that can do very well, I'm thinking about education, certainly, but I'm also thinking about the engineering services that are tied to some of these big, nation-defining projects, if you will. Our companies in Mississauga are ready and willing to be a part of those projects.

On the international side and on the U.S. side, it's those companies.... Quite frankly, we're still in the early days of understanding where things may go here. Those companies that are already diversifying their supply chains and that already have a fairly diversified market base—the U.S. is likely still their number one market—are faring better, and they're doubling down on those other markets.

[Peter Fonseca, Liberal, Mississauga East—Cooksville, ON]

Thank you, Trevor.

We've had discussions about harmonizing regulations. We talk about that with regard to interprovincial trade—things that we can do, that we have control over here in Canada—as well as when we look at the CUSMA review and some of the regulations between Canada and the United States, some of that harmonization to help the flow of goods and services. Can you expand on that?

[Trevor McPherson]

Yes.

[Peter Fonseca, Liberal, Mississauga East—Cooksville, ON]

I know we've had some talks about that, about how important that is and about what that means to business.

[Trevor McPherson]

It's very important. We talk about breaking down barriers here domestically and reducing red tape. At any level of government, it's important to business.

Harmonization, too, whether it's in internal trade across the country...and it's great to see the progress being made there. Certainly, in certain sectors like life sciences, regulation and harmonization could play a key role in speeding up things like access to innovative medicines here in Canada, where a patient can wait up to two years before an innovative drug is listed.

If we had better integration—and I think the CUSMA can play a role there on regulation—we could protect and really support the growth of these highly innovative firms that are already investing here in Canada. It does remain a risk if the end result of the CUSMA is additional regulation that makes it more difficult for Canadian companies to do business—in this case, the life sciences sector but others as well—in the U.S. That's what our members are watching out for.

[Peter Fonseca, Liberal, Mississauga East—Cooksville, ON]

We did get your three—

[The Chair, Liberal, Judy Sgro]

You have eight seconds remaining.

[Peter Fonseca, Liberal, Mississauga East—Cooksville, ON]

We thank you for the recommendations that you've given us for the CUSMA review, and thank you very much for all you do for business in Mississauga.

Thank you, Trevor.

[Trevor McPherson]

Thank you so much.

[The Chair, Liberal, Judy Sgro]

Monsieur Savard-Tremblay, you have six minutes, please.

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

Thank you, Madam Chair.

Mr. Meltzer, you're a senior fellow. You're also an expert on major trade agreements, such as the Comprehensive and Progressive Agreement for Trans‑Pacific Partnership and the Canada-United States-Mexico Agreement, the focus of our study.

You're also an expert on World Trade Organization issues. I think that we should talk about the World Trade Organization as part of our study. If ultimately the agreement with the Americans doesn't continue—an almost unthinkable scenario—the World Trade Organization rules would still apply.

Is that right? Can you confirm what I just said?

[Joshua Meltzer]

I think that's correct. If I understand the question correctly, it is about what the various options for Canada would be in the event the USMCA was to not continue.

I agree with your statement. I don't think this is going to happen. I don't think the U.S. is looking to pull out of the agreement. I think the agreement will run until 2036, even if there's not a successful review next year. Canada, of course, is a member of the WTO and has various other free trade agreements and regional trade agreements. The CPTPP is one of them, and there are the bilateral agreements with Europe, Japan and other countries. Those agreements would obviously remain.

The world of the WTO has changed considerably this year, but it has also changed over the last eight to 10 years. What's clear is that the MFN or most favoured nation principle, which has been central to WTO membership and the operation of the WTO, certainly with respect to the U.S., no longer exists. Even Canada, in small ways, as it has raised tariffs on EVs from China, for instance—I know that's under review—essentially did that inconsistent with its WTO commitments.

I think countries are very much walking back from the WTO. The dispute settlement mechanism has stopped working. The WTO as a foundation for governing trade exists, but it is a lot weaker and a lot more fractured than it has been in the past. It would obviously remain, though, in the event of there being no USMCA.

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

Let's take a brief look at the history of the World Trade Organization, or WTO, which was created on January 1, 1995.

First, we know that the United States pushed for and backed this institution. The United States had come to accept, and even welcome, China's entry into the WTO, believing at the time that this would transform China into a market economy. However, China ultimately joined the WTO in order to take advantage of the openness of others rather than to extend that openness to itself.

The WTO then ran out of steam after the utter failure of the Doha round. The United States then concluded that this institution, which it wanted so badly to work to its advantage, had ultimately benefited China more. So it dismantled the institution.

Do you agree with my summary? I would appreciate a fairly brief response, please.

[Joshua Meltzer]

Yes, broadly speaking, I think I am. What's currently going on between the U.S. and China is reflective of a range of dynamics that are under way. What happened in the WTO with respect to China was partly a reflection of some of the limits of the WTO rules. It was also a reflection of decisions that have been made by various Communist Party leaders to take China in a different direction when it comes to the way they think about trade and integration in the global community, which was, ultimately, very much at odds with the broader-based trading system based on a comparative advantage.

The Chinese model is fundamentally premised on overcapacity in manufacturing, which gets exported to the rest of the world, and an increasingly closed internal market. For the world's second-largest economy, this is very much at odds with and not sustainable in the context of a trading system built largely—not completely, but largely—around lower tariffs and leaning into competitiveness and a comparative advantage.

You then have the geopolitical competition between the U.S. and China. The U.S. is responding in various different ways. Part of it is informally pulling out of the WTO and recognizing the limits of what the WTO can do in addressing the China challenge, and looking for alternative ways to work around that. This is where we get to the role of North America in this context.

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

My question needs further development, so I'll come back to it later. However, I'll ask it right now. You can keep it in mind and respond during the next round of questions.

How much do you think that the mistrust of China plays into the American mistrust of Canada? Canada would be seen as weak compared to China, and this would affect Canadian‑American relations.

[The Chair, Liberal, Judy Sgro]

Perhaps you can answer that question when Mr. Savard-Tremblay gets his next round.

Mr. Mantle, please go ahead for five minutes.