International Trade Committee on Oct. 23rd, 2025

Evidence of meeting #8 for International Trade in the 45th Parliament, 1st session. (The original version is on Parliament’s site, as are the minutes.) The winning word was china.

A recording is available from Parliament.

On the agenda

Canada and the Forthcoming CUSMA Review

Members speaking

Judy Sgro

Adam Chambers

Peter Fonseca

Simon-Pierre Savard-Tremblay

Before the committee

Meltzer Senior Fellow, As an Individual

Reuss President and Chief Executive Officer, Canadian Automobile Dealers Association

McPherson President and Chief Executive Officer, Mississauga Board of Trade

Williams National Spokesperson, Canadian Automobile Dealers Association

Kilby Chief Executive Officer, Dajcor Aluminum Ltd., Canadian Aluminum Extruders Coalition

Sherman Senior Director, Government and Industry Relations, Canola Council of Canada

Adams President, Global Automakers of Canada

4:10 p.m.

Conservative

Jacob Mantle Conservative York—Durham, ON

Thank you, Madam Chair.

Thank you to our witnesses for appearing.

Mr. Meltzer, my first questions will be for you.

We've heard a lot from our government that, despite punishing sectoral tariffs on steel, autos and aluminum, regardless of those, we in Canada have the best deal with the United States right now. However, according to your analysis, which I read, you indicated that, according to your review, Canada faces a trade-weighted average tariff of about 9.8%. At the same time, Mexico's trade-weighted average tariff is about 5.2%.

Is it correct, according to your analysis, that Canada actually currently has a worse deal than our other primary partner in North America, Mexico?

4:10 p.m.

Senior Fellow, As an Individual

Joshua Meltzer

Yes, it is, more or less. We're seeing developments recently where tariffs on Canada went up, and they didn't on Mexico. They went from 25% to 35%. That's been one of the implications there. Some of the section 232 tariffs have hit Canada more than Mexico.

I will say that, going forward, when you look at the 232 tariffs that are under way, the large truck tariff and potentially tariffs on pharmaceuticals, semiconductors and so forth, the assessments are that these tariffs are going to hit upwards of 40%, if not close to 50%, of Mexico's trade with the U.S. I think that will change, but I think we saw that shift under way because Canada got hit with a higher, effectively, IEEPA 35% tariff than Mexico did.

4:10 p.m.

Conservative

Jacob Mantle Conservative York—Durham, ON

Thank you.

You've also written quite extensively about the U.S.'s purchase commitments, requirements in other trade deals that it signed, whether that's with Japan or with the United Kingdom. If the United States were to request purchase commitments in any of the deals, or whatever might come in the future, do you think Canada should accept that?

4:10 p.m.

Senior Fellow, As an Individual

Joshua Meltzer

It's hard to say in the abstract. Our concern with the purchase commitments was very much targeted, not entirely, to the China deal because, effectively, it does two things. It made U.S. exports basically dependent on a government decree in China, which essentially gave China leverage over the U.S. You've seen the back and forth on the soybean front, where those decisions get fulfilled or where they don't get fulfilled.

Also, it's a bit of a zero-sum deal on China's end because a lot of countries are selling to China, so often, it means that you could substitute an American product for maybe a Canadian product or an Australian product, whatever it may be in the agricultural sector. It also creates tensions with allies when you make this happen, rather than just allowing the market to work out the products that are ultimately going to succeed.

I think that, in the Canadian context, I could really only add to that in the context of what was on the table and what was at stake.

4:10 p.m.

Conservative

Jacob Mantle Conservative York—Durham, ON

Mr. Williams, I have a question for you. I want to ask you about the so-called luxury tax that was imposed on vehicles by the current government. Could you give me your view on the so-called luxury tax and how that affects affordability in Canada?

4:10 p.m.

National Spokesperson, Canadian Automobile Dealers Association

Huw Williams

Thank you for the question. Thank you for meeting with our dealers. Even before you were signed into office here, you took a meeting when our board was in town.

I would say this. The luxury tax is a borrowed idea from the U.S. during the 1990s when they taxed cars, boats and airplanes. It failed in the U.S. They had to withdraw it because of the economic damage. It's just not consistent with our tax system. One of the beauties of our tax system is that we have HST. When you spend more as a consumer, you pay more in tax. It's neutral as to what you spend on.

I think the idea behind targeting those three particular industries just doesn't make any economic sense. We've seen a real perversion of it in the marketplace, where you have auditors trying to investigate whether you bought snow tires before or after and whether those were included in the deal.

For those members who don't know, we get auditors coming in. If you buy a car during the wintertime and we include summer tires, some auditors say those should be included. However, if you buy the tires six months later from the same dealership, you should retroactively pay that tax, but if you buy them across the street from Canadian Tire, there's no tax on them. There are some really nonsensical items.

I want to give credit to previous minister of finance Bill Morneau because he listened to our pleas to start the tax at $100,000, as opposed to dollar zero, which has lessened that element of it.

As we're under all of these pressures from tariffs, all of these pressures from inputs on steel, aluminum, copper and other things, it's just untenable that we would live in a world with a luxury tax. The cost to produce this luxury tax is more than they're collecting. It doesn't make any sense.