International Trade Committee on Oct. 23rd, 2025

[Joshua Meltzer]

Yes, I think so.

[David McKenzie, Conservative, Calgary Signal Hill, AB]

Thank you.

[The Chair, Liberal, Judy Sgro]

Thank you very much.

Next is Mr. Lavoie, please, for two and a half minutes.

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

Thank you, Madam Chair.

My question is for you, Mr. McPherson.

You speak a great deal about certainty. I understand why. When I was president of a chamber of commerce, I wanted our businesses to operate in an environment of certainty.

I often ask witnesses the same question, and I'll ask it again.

First, I would like to quote this maxim: “Life isn't about waiting for the storm to pass. It's about learning to dance in the rain.” This is the new reality in business. Given the circumstances, we can't continue to wait indefinitely. The uncertainty is too great.

Given the current situation, without knowing when predictability and certainty will make a comeback, how can the government help businesses keep moving forward regardless?

Furthermore, can organizations such as the Canada Growth Fund or the Canada Infrastructure Bank help businesses? Are there other organizations?

[Trevor McPherson]

That's a very good question, and I thank you for it.

It's a complicated matter when it comes to mitigating this uncertainty for firms, and it probably varies by industry as well. The best way at the moment is that, in the short term, we see all levels of government looking at how they can provide support through the short term to reduce that uncertainty. In the longer term, though, it's really working at the areas where we have more scope of control, and those are in diversifying our trade and supply chains.

The other thing I'll add is that upskilling is also a key component of this. We need to keep our eye on ensuring our workforce is skilled up in all of the areas that are transforming our business community, like AI and technology but also in ways that better enable them to take advantage of international opportunities.

One thing we observe here at the board of trade, which I think others have observed as well, is that Canada enjoys many free trade agreements globally, but the uptake—similar to our expertise in AI itself—and the adoption from the private sector has been less than optimal. I'm encouraged that the government is looking at ways to open up new doors in other markets, but it's one thing for the door to be open and another thing for a company to walk through it.

We very much would like to continue to work with all levels of government to ensure that the incentives are there—beyond the incentive of its being difficult to do business in the U.S.—for companies to truly pursue a longer-term international diversification strategy with regard to their sales.

[The Chair, Liberal, Judy Sgro]

Thank you very much, Mr. McPherson.

To all of our witnesses, thank you very much. We appreciated the valuable testimony from everyone.

I will suspend for a moment while we change witnesses.

Thank you very much.

[The Chair, Liberal, Judy Sgro]

I'm calling the meeting back to order.

Thank you very much to our witnesses for coming today.

From the Canadian Coalition of Aluminum Extruders, we have Mike Kilby, chief executive officer, Dajcor Aluminum Ltd. From the Canola Council of Canada, we have Troy Sherman, senior director, government and industry relations. By video conference, from Global Automakers of Canada, we have David Adams, president.

Welcome to you all.

Mr. Kilby, I invite you to speak to the committee for up to five minutes, please.

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

Thank you, Madam Chair.

I'm here today to represent a coalition of aluminum extruders from Canada. This coalition of eight represents a majority of the aluminum extrusion industry in Canada.

Today, we come together with an urgent voice because the U.S. tariffs have created a crisis for our Canadian operations. This situation is already causing a severe disruption and is threatening thousands of good-paying jobs. The future of our industry is in jeopardy. We are seeking support at this critical time.

Our companies are downstream aluminum companies that purchase primary aluminum, mainly from smelters in Quebec. We extrude it and we often add value-added services, such as machining, fabrication, paint and anodizing. We are not primary aluminum producers and therefore our situation needs quite a different treatment from that of the primary aluminum smelting industry.

The companies I represent today represent approximately 80% of the Canadian extrusion industry capacity. We serve a variety of industries—automotive, building and construction, consumer products, distribution, industrial, medical, military and electrical. Our aggregated sales are approximately $2.5 billion annually and we directly employ approximately 3,500 people across the country.

We also purchase and further process millions of kilograms of Canadian-made primary aluminum every year. The North American extrusion demand of approximately four billion pounds is mostly in the U.S. We rely on unrestricted access to this market.

The tariffs have materially impacted our ability to export to the U.S. and have resulted in job losses and an uncertain future for our industry. To make matters worse, foreign aluminum extrusions that can no longer find their way into the U.S. market are diverting into the Canadian market.

We are asking to be supported and consulted with as Canada works to resolve current trade issues and negotiate future ones. The tariff impact to downstream aluminum producers is very different from the primary producers, and we need support to protect this vital part of the Canadian aluminum industry.

Specifically, we're requesting the following: negotiate for the elimination of tariffs on Canadian aluminum exported to the U.S.; stop the diversion of extruded products into Canada, both direct and indirect; ensure us a seat at the table as Canada formulates a policy and negotiates CUSMA 2.0; and provide us the same support and considerations available to other important industries such as steel and automotive.

Recently and prior to the U.S. imposition of tariffs, the U.S. aluminum extruders association launched an anti-dumping case against 15 nations. Most of these are low-cost countries and Mexico was included amongst those. I'll talk about Mexico separately in a moment.

The U.S. trade commission found that there was dumping from each of those nations, but did not go as far as imposing anti-dumping duties at that time. This finding is currently under appeal.

Our industry in Canada took note of this situation and began discussing launching a similar trade case, as we see similar dumping into Canada. The threat of a U.S. anti-dumping finding already causes companies to shift their business and start bringing product into Canada, which is weakening our industry and potentially creating a perceived back door into the U.S. market. This Canadian trade case initiative was overshadowed by the U.S. aluminum tariffs, but has not gone away. In fact, it is more critical than ever that something be done to stem the flow of foreign extrusions coming into Canada at considerable price advantage.

The tariffs have changed the market cost structure, making Canada an attractive market for foreign metal. Our industry seeks an immediate barrier to provide time to bring forward a trade case. A trade case will take a couple of years and we simply don't have that amount of time.

With respect to Mexico, at the conclusion of the CUSMA negotiations, a last-minute change was requested by Mexico to remove the 70% North American-sourced raw aluminum content from autos. This was odd because Mexico is not a smelter of aluminum. At the time, there was significant concern that this could create a back door through Mexico for Chinese aluminum to enter the North American market. At the time, Rio Tinto and I attended a trade committee meeting here to present this concern. The entry of Chinese aluminum through Mexico did occur and is occurring, and this was part of the U.S. anti-dumping case that included Mexico. As an industry, we believe it's important to have a voice at future CUSMA negotiations to help avoid this type of outcome in the future.

I would like to convey one final point. As a significant downstream market for the aluminum smelting industry in Canada, it is imperative that the aluminum extrusion industry survives. If it does not, the sourcing of aluminum extrusions will move offshore to the least-cost countries. That will have a direct impact on the primary aluminum market here in Canada, as well as on other Canadian businesses. A vertical integration of aluminum processing will be lost.

On behalf of the Canadian Aluminum Extruders Coalition, I'd like to thank the committee for allowing us to appear here today. I'm happy to take any questions.

[The Chair, Liberal, Judy Sgro]

Thank you very much, Mr. Kilby.

Mr. Sherman, please go ahead for up to five minutes.

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

Thank you, Chair Sgro and members of the committee, for the invitation to join you today.

My name is Troy Sherman. I'm the senior director of government and industry relations at the Canola Council of Canada.

The Canola Council of Canada is a national value-chain organization representing approximately 40,000 canola farmers, together with exporters, processors and life sciences companies. As a value-chain organization, our goal is to ensure the industry's continued growth and success, and to do this by meeting domestic and global demand for canola and canola-based products, including canola seed, oil and meal. Our industry represents $43.7 billion in direct, indirect and induced economic activity annually, supports over 200,000 jobs across the country and provides $16 billion in wages annually. Canola also represents one of the largest sources of farm cash receipts in the country.

International trade is vital to the success of the industry. The vast majority of canola products are destined for international markets, with exports totalling $14.5 billion in 2024. For the Canadian canola industry, the Canada-U.S.-Mexico agreement, or CUSMA, is essential to tariff-free and rules-based continental trade. Exports to the U.S. and Mexico totalled approximately $8.26 billion in 2024, with the U.S. representing $7.7 billion and Mexico representing $559 million. The U.S. is the canola industry's top market for canola oil and meal, and canola exports to Mexico are often the top agricultural export from Canada.

Like a number of other industries and sectors, the North American canola industry is highly integrated. For example, canola grown in the Prairies may have been researched in the United States, harvested here in Canada and exported to Mexico to be crushed and transformed into oil or meal. You may find that Canadian-grown and -processed canola is exported as oil to the United States for use in food manufacturing, as a feedstock or to produce biodiesel or renewable diesel.

CUSMA is the linchpin that enables the smooth, predictable and free-market trade of Canadian canola across the continent. It also provides the trade architecture that allows Canada, the U.S. and Mexico to address issues of concern, find opportunities for collaboration and raise the level of ambition for the growth of industries in each of our three countries.

As Canada prepares for the upcoming CUSMA review and the possibility of negotiations, the canola industry has the following priorities: maintain tariff-free trade for agricultural products, including canola and canola products; maintain the trilateral nature of the agreement to ensure continental trade is governed by a common set of rules; preserve CUSMA's dispute settlement mechanism so the parties have recourse in the event of a trade policy that is disruptive, restrictive or counter to sound, science-based decision-making; maintain or raise the level of ambition for the sanitary and phytosanitary chapter, ensuring that sanitary and phytosanitary measures are aligned with science-based and risk-based principles; and move the Canada-U.S. Regulatory Cooperation Council under CUSMA to provide it with a formal governance structure and regular work plan. These measures will help the Canadian canola industry maintain and, indeed, grow markets in the U.S. and Mexico through predictable, rules-based trade while being uncompromising in the level of ambition we set for continental trade.

In summary, CUSMA has been a foundational agreement that has served the Canadian canola industry well. While there may be a need to modernize or update targeted elements of the agreement, on the whole, it should be preserved and continue to serve as a benchmark for future free trade agreements in both structure and ambition.

Thank you again for the opportunity to appear today. I look forward to the discussion and answering any questions the committee may have.

[The Chair, Liberal, Judy Sgro]

Thank you very much.

It's on to Mr. Adams for five minutes.

[David Adams, President, Global Automakers of Canada]

Thank you, Madam Chair.

I apologize for not being there in person today, but I do thank you and the members of the committee for the opportunity to speak to you on behalf of the 16 member companies of the Global Automakers of Canada.

The Global Automakers of Canada is a national trade association representing the interests of 16 of the world's most significant automakers. Our members are collectively responsible for more than 62% of vehicle sales in Canada. Our two manufacturing members, Toyota and Honda, are Canada's largest and second-largest vehicle producers, representing through the end of September 75.5% of Canadian light-duty vehicle production. In fact, Honda and Toyota have built more vehicles in Canada so far this year than the Detroit three combined.

Additionally, GAC member Volkswagen and its partner PowerCo remain in the process of building up the $7-billion factory in St. Thomas, Ontario. It's slated to employ up to 3,000 individuals directly in that battery facility. Importantly, the members and their dedicated automotive parts suppliers employ more than 110,000 people. The activities of the members support more than 106,000 additional jobs across the country, including close to 18,000 auto parts manufacturing jobs in Quebec and Ontario.

While this picture of the membership's activity in Canada is positive, it is being challenged by the current section-232 tariffs situation, and the U.S. administration's seeming disregard for the provisions of the CUSMA, which was the product of hard-fought negotiations six-plus years ago.

With respect to section 232 tariffs on autos, we need a solution on both sides of the border on tariffs and retaliatory tariffs as soon as possible. With respect to CUSMA, Canada's position needs to be one of strongly defending a trilateral CUSMA as an agreement that works and provides tangible benefits to the U.S. auto industry.

The CUSMA has the most stringent rules of origin of any modern trade agreement in the world with a super core parts requirement, a very aggressive regional value content requirement and a labour value content requirement. Presumably, these attributes led President Trump to state that the USMCA at the time was the fairest, most balanced and beneficial trade agreement—

[The Chair, Liberal, Judy Sgro]

Hold on, Mr. Adams. We seem to have lost the connection.

Maybe we'll move on to questions, and then go back to Mr. Adams when we get him back online. He has two and a half minutes left.

Mr. Adams, we have you back. Please, go ahead.

[David Adams]

I'm sorry about that. I don't know what happened there. Let me continue.

All businesses need certainty and, in this regard, the elimination of the sunset clause, article 34.7, would be an ideal way to enshrine this.

A case in point is that the United States has chosen to completely ignore the binding automotive side letter specifically designed to insulate Canada from the application of these 232 tariffs to Canada's benefit, while also effectively capping automotive exports to the United States for the benefit of the United States. If such seemingly win-win provisions arising out of the negotiation cannot be counted on, it calls into question the credibility of the agreement.

The CUSMA was key to securing additional investment in North America, as all automakers needed to consider how to meet the challenge of moving up from 62.5% of regional value content to 75% regional value content. While these provisions benefited the U.S., they also benefited Canada and the Canadian parts makers. Moreover, the labour value content requirements, while primarily benefiting the United States production, also benefited investment in Canada.

Meeting the requirements of the agreement has not been easy, as evidenced by the fact that 12 automakers petitioned for alternative staging regimes to provide them with additional time to meet the requirements of the agreement.

A key goal of the CUSMA review should be to ensure that Canada continues to enjoy tariff-free access to the U.S. market for automotive products, provided the stringent negotiated provisions of the agreement are adhered to. It is imperative for Canada to maintain a vehicle manufacturing footprint. With autos and auto parts being the nation's second-largest export sector, we can ill afford to lose this sector and the nearly half a million jobs that rely on it.

The implementation of the agreement is still relatively new and, as such, we do not recommend any wholesale change to the agreement at this time. If there are any specific changes or areas of coverage that need to be made to the agreement, we would suggest a surgical approach to integrating such changes. This is, after all, a review and was not intended to be a wholesale renegotiation.

Canada has played its part as a key partner in an integrated North American automotive sector through the adoption of harmonized safety and emissions standards with those of the United States and in adopting a similar stance regarding challenges posed by Chinese electric vehicles. More than 40% of Canada's sales are American-built product and, despite assertions to the contrary, the United States has an automotive trade surplus with Canada. These points need to continue to be emphasized to the U.S. administration to underscore the benefits to the United States of having Canada as a core automotive trading partner.

Madam Chair and members, thank you for your time. I look forward to your questions.

[The Chair, Liberal, Judy Sgro]

Thank you very much, Mr. Adams.

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

[Jason Groleau, Conservative, Beauce, QC]

Thank you, Madam Chair.

I want to welcome the guests.

Mr. Sherman, thank you for being here.

You're a senior director at the Canola Council of Canada.

I want to talk to you a bit about tariffs and the issues currently facing your industry. China has imposed extremely heavy 100% tariffs on canola.

How will these tariffs affect farmers right now, and what major issues will they cause?

[Troy Sherman]

Thank you so much for the question.

It's no surprise to members of this committee that we are facing a very serious challenge with China. As you mention, we are currently facing 100% anti-discrimination tariffs on canola oil and meal, as well as a provisional anti-dumping duty of 75.8% on canola seed.

China is our second-largest market. It's our top market for canola seed and our second-largest market for canola meal, and there aren't that many $5-billion markets out there. I think we're going to have a pretty good harvest this year, better than many had even expected, which typically is great news for farmers, but these impacts are immediate.

We're seeing impacts in terms of farmers and what's happening at the basis for them. We saw a significant hit in futures when these tariffs and anti-dumping duties were announced. Also, then, there's a lack of predictability for farmers about where that product will be able to go. Farmers are trying to figure out whether we're going to hold onto that crop and not be able to sell, so there are cash flow concerns. There are people who are looking at potentially buying new combines and new sprayers. Those are usually $1.2-million expenses. Also, for large parts of the country, canola is the single largest farm cash receipt.

It's very impactful right now, and I will say that it's impactful for farmers, but it's also extremely impactful for exporters and processors as well, who also face potentially underutilized assets.

[Jason Groleau, Conservative, Beauce, QC]

Do you feel that the Liberal government is truly supporting farmers during this crisis?

[Troy Sherman]

We've had, obviously, some significant discussions with the federal government on this issue. As members of the committee might know, the Prime Minister announced some support measures on September 5. We did feel that those support measures missed the mark. We need to make sure that they are rightsized to be able to account for the impact we are facing both now and going into the fall and winter, when typically a lot of sales happen in our industry.

We are hopeful that we can get some changes to some of the programs and policies the federal government announced at the time, including on the biofuel production incentive and some changes to the clean fuel regulations as well.

[Jason Groleau, Conservative, Beauce, QC]

I come from the Beauce region. In my constituency, agriculture is the main industry, and we're very proud of it. Since coming here a few weeks ago, I've been talking to many people in the agriculture industry. This week, I met with people in the grain industry. Unfortunately, these people are telling me that the current government doesn't seem to prioritize them.

Do you also feel this way?

[Troy Sherman]

I think if you talked to the western Canadian farmer, they would feel that, absolutely. When all this happened and we were faced with anti-discrimination tariffs back in March, we had urged the government to react quickly and swiftly, given the impact on our industry, in the same way that they were reacting quickly and swiftly for other sectors of the economy as well. I think we are always in this struggle between different sectors of the economy and different regions. We all want Canada to be successful. We all want our sectors and industries to be able to grow, but I think the sentiment, if you were to ask a western Canadian farmer right now, would be that they are often overlooked.

[Jason Groleau, Conservative, Beauce, QC]

I gather that you nevertheless represent 40,000 farmers.

[Troy Sherman]

Absolutely.

[Jason Groleau, Conservative, Beauce, QC]

That's a huge number. Your industry is worth $43 billion, and you don't feel heard. That's quite serious.

[Troy Sherman]

We continue to engage with ministers. We did have a meeting with the Prime Minister back in September as well. We are encouraged that the federal government is putting in significant efforts in working with China. The Prime Minister met with his counterpart on the margins of the UN General Assembly back in September. That was based off a call they had in June. Minister Anand was there last week as well. Premier Moe and Parliamentary Secretary Blois were in China also.

This engagement is important. We think we need more of that. We're encouraged by where we're going, but we need to resolve this issue as soon as possible.