International Trade Committee on Oct. 27th, 2025

[The Chair (Hon. Judy A. Sgro (Humber River—Black Creek, Lib.)), Liberal, Judy Sgro]

I'm calling the meeting to order.

Welcome, everyone, to meeting number nine of the Standing Committee on International Trade.

Pursuant to Standing Order 108(2) and the motion adopted by the committee on Thursday, September 18, 2025, the committee is resuming its study of Canada and the forthcoming CUSMA review.

We have with us today, from Canadian Manufacturers and Exporters, Ryan Greer, senior vice-president, public affairs and national policy. From Direct Sellers Association of Canada, we have Peter Maddox, president. We are expecting to have online shortly, from the MRC de Thérèse-De Blainville, Kamal El-Batal.

We have Mr. Naqvi online as well today.

Welcome to all. As you know, you can have opening remarks of up to five minutes.

Mr. Maddox, would you open it up, please.

[Peter Maddox, President, Direct Sellers Association of Canada]

Thank you to the chair and committee.

DSA Canada was founded in 1954, and we have over 60 direct selling and supplier member companies, including well-known brands such as Mary Kay, Arbonne, Avon, Tocara and Immunotec.

We represent a diverse industry that is driven by an integrated North American market. We are also a member of the World Federation of Direct Selling Associations, a global organization that helps lead industry ethical standards in over 50 markets.

Each year, direct selling in Canada accounts for over $3 billion in retail sales and contributes $1.5 billion in personal revenue to the approximately one million Canadians who participate as independent sales consultants, 84% of whom are women. These consultants also build business skills and provide a service to their communities. Across Canada, the U.S. and Mexico, total sales are over $60 billion annually.

The industry we represent is unique in many ways. These distinct features make us an ideal case study of the challenges of trade uncertainty and the need for strong trading relationships.

First, DSA Canada's stakeholders include large multinational consumer goods companies, small regional businesses as well as the micro-entrepreneurs who comprise our sales force. Further, our members sell everything from foods to natural health supplements, cosmetics, clothing, jewellery and kitchenware—all products that are impacted by trade challenges. Finally, our members are located in Canada, the U.S., Latin America, Asia and Europe, and they all choose to do business in this country.

For these reasons, the future of CUSMA is vital to the ongoing health of our member companies and entrepreneurs across Canada.

While we will provide specific detail in our upcoming written submission, I would today like to discuss key concerns and ideas for negotiations with continental partners.

First, I want to highlight the value of an equitable de minimis duties exemption for many North American businesses. The ability to ship small quantities of legitimate products directly to consumers across North America creates amazing opportunities to grow a customer base. Since the U.S. removed their de minimis duties exemption in late August, all of our Canadian-based members have changed business approaches by halting U.S. expansion, exiting the U.S., moving warehousing to the U.S., or simply spending precious time and money on completing new customs obligations, each of which is detrimental to the Canadian economy.

According to the Canadian Federation of Independent Business, nearly one-third of a Canadian SMEs expect to be negatively affected by the loss of the U.S. de minimis exemption.

We ask for the maintenance of a de minimis exemption in Canada and efforts towards the restoration of an equivalent value, CUSMA-specific exemption in the U.S. to serve its original purpose of enabling the pursuit of small-scale, yet additive, commercial success.

Second, article 15.10.1 of the current CUSMA specifically defines direct selling as an integral part of small and medium-sized business, and the agreement provides provisions for protecting consumers and ensuring the voice of entrepreneurship in policy. We ask that this content and its commitment continue to be included in a renegotiated CUSMA so that our industry and all entrepreneurs can thrive and contribute to regional trade.

Third, to help itself at this uncertain time and to unlock investment funds that business is apprehensive to engage, Canada must commit to cutting red tape and improving pathways to market, as prioritized by the Prime Minister.

As an example, a streamlined natural health product approval process can greatly enhance Canadian innovation and competitiveness and help reduce the challenge created by personal importation of unapproved products.

Canada should use this difficult trade window as an impetus to re-engineer processes for internal improvement and nation building.

Direct selling is not only a significant contributor to the North American economy, but also the embodiment of modern entrepreneurship. By preserving the existing language defining our industry, as well as taking the opportunity to update policies that affect success, government can further strengthen this impact.

Our largely female-driven industry has been a vital part of communities for many years and will play an ongoing role in the prosperous low-barrier and low-tariff partnership amongst our three nations.

DSA Canada appreciates this committee's consideration and stands ready to provide additional information as needed.

Thank you.

[The Chair, Liberal, Judy Sgro]

Thank you very much.

We'll move now to Mr. Greer, please, for up to five minutes.

[Ryan Greer, Senior Vice-President, Public Affairs and National Policy, Canadian Manufacturers and Exporters]

Thank you, Chair and committee members, for inviting Canadian Manufacturers and Exporters to appear today as part of this study. For the last 154 years, CME has been the voice of Canadian manufacturing, helping Canada’s industrial economy grow, compete and create prosperity in communities across the country. Our sector employs 1.8 million Canadians, generates nearly $850 billion in annual sales and produces two-thirds of Canada’s value-added exports.

The driving idea behind NAFTA and later CUSMA is that Canada, the United States and Mexico can achieve stronger growth and global competitiveness by removing barriers, integrating production and treating North America as one platform rather than three separate markets. This is no longer a shared belief, and has led to U.S. policies that are making North America’s industrial base less reliable and less competitive. As a result, Canada will face a difficult negotiating environment in the upcoming review. We must approach it not with defensiveness, but with purpose, to try to better position CUSMA as a vehicle to address our shared economic and geopolitical challenges while preserving the core benefits that have fuelled continental manufacturing growth.

Over the last few weeks, CME has surveyed 250 manufacturers from across the country on the future of the agreement. We found that 96% of manufacturers support extending the agreement during the 2026 review, and only 3% oppose. Seventy-five per cent indicate that a non-renewal in 2026 would negatively impact their business, and only 2% say that it would have no impact. Opinions are divided on Canada accepting a baseline tariff. Eighteen per cent of manufacturers say that any baseline tariff would make their business uncompetitive, and 13% say that they could manage a tariff of up to 2.5%. Twenty-five per cent say that they could manage a tariff of up to 5%. Another 24% say that they could manage a tariff of up to 10%, and only 2% of manufacturers say that they would remain competitive with a tariff rate above 15%. Notwithstanding the reputational and economic damage caused by U.S. actions, a full 88% of manufacturers support increased economic integration in North America.

These findings make it clear that even in the face of capricious U.S. trade actions, manufacturers want Canada to pursue a pragmatic, solutions-driven approach to Canada-U.S. trade.

With these results in mind, I’d like to very briefly share some of CME's priorities heading into the review. The first and most urgent priority is to find relief from the unjustified section 232 tariffs. Thousands of workers have already lost, or are at risk of losing, their jobs because of these tariffs. We hope we can secure section 232 relief through bilateral discussions as soon as possible.

The second priority is to preserve Canada’s U.S. market access and the continuity of existing manufacturing supply chains. As obvious as it sounds, preserving production networks that have been built up over decades is essential to encouraging regional investment and keeping high-value manufacturing jobs in North America.

The third priority is to strengthen our shared approach to safeguarding the North American market from unfair trading practices by non-market economies. Canada, the U.S. and Mexico face common threats from subsidized and dumped imports, particularly from China. We should continue to align on measures to protect North American producers. I want to pause on this point. Despite the damaging actions that have been taken toward Canada, we need to remember that a long-term, whole-of-government, bipartisan consensus largely exists in the U.S. around the issues of economic and national security vis-à-vis China.

Fourth, we need to enhance North American co-operation in energy and critical minerals. We know that this is important to the U.S. A renewed agreement could create an opportunity to align on such issues as permitting, investment incentives and stockpiling to strengthen continental supply chains and reduce reliance on non-allied sources.

Fifth, strengthen the North American defence industrial base. As Canada increases its defence spending, there will be an opportunity for Canada to not just enhance our own sovereign capabilities but also strengthen our shared North American defence industrial base.

Sixth, rationally assess Canada’s own trade irritants and reliability. Canada should re-examine our approach to protected sectors, supply chain reliability and other border irritants on issues that we know are important to the U.S.

Seventh, we think there's an opportunity to activate underused CUSMA committees and working groups. Mechanisms in the agreement, such as the competitiveness committee and the good regulatory practices committee, remain largely dormant. They could be used to develop faster, real-time strategic responses to the emerging economic and geopolitical challenges facing our countries.

Lastly, we believe Canada can push to help enhance the compliance mechanisms to address irritants and improve the agreement’s functioning. Canada should support stronger, more transparent enforcement tools that ensure that all parties meet their obligations.

In conclusion, we recognize that Canada’s ability to preserve our trade agreement with a partner that views trade as zero-sum will undoubtedly require a number of difficult high-stakes discussions, decisions and trade-offs.

As we did during the last negotiation, CME will use our seat at the table to help ensure that the interests of Canadian manufacturers and their workers are represented in our efforts to preserve North America as the best place in the world to make things.

Thanks, and I look forward to your questions.

[The Chair, Liberal, Judy Sgro]

Thank you very much.

Our third witness has not connected at this point, so we will go to questions from our members. If he connects later, we'll interrupt the proceedings.

Mr. McKenzie, please go ahead for six minutes.

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

Thank you, Madam Chair.

Mr. Greer, could I ask you about the CBSA assessment and revenue management, or CARM, system? Do you hear very much from your members about its implementation and ongoing use at this time?

[Ryan Greer]

Yes. We heard concerns prior to implementation and since implementation.

I think most notable, for this committee's work, is that we know that U.S. users are facing some problems. This is an irritant that I'm sure will be raised by the U.S. during this process. I know part of their concern is around the availability of import and export data. We can expect to be asked to address that, from the U.S. side. Surely, working closely with exporters to address it on the Canadian side is important.

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

Generally speaking, for small business people, it is a difficult system to access, and it's often unwieldy. Would that be fair, in terms of feedback you get from your membership?

[Ryan Greer]

We've had varying feedback. I wouldn't try to summarize it in just one sentence. Some have had problems, and others have had less so.

In short, for SMEs, on these kinds of changes, we heard a lot of anxiety prior to implementation for a bunch of obvious reasons, and we think efforts to double down on engaging with industry and hearing feedback and correcting for it should be top priorities for CBSA.

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

I believe you said something very similar to “China's neo-mercantilist approach to international trade in the North American marketplace” is something to be concerned about.

I had to look that up. I wonder if you could explain that statement and what your members see as the risk from China's participation, or indeed, from an increased trade relationship between Canada and China.

[Ryan Greer]

In general, it's a long-term trend since China's accession to the WTO, which has not led them to adopt pure market-based reforms and to integrate fairly into a multilateral trading system. Instead, it has been a very strategic sector-by-sector approach to try to increase production, oversubsidize specific industries and dump them on world markets to try to undermine production of those goods and services in other countries.

In general, while organizations like ours are not in favour of tariffs or of trying to protect domestic producers, we are a trade-exposed industry, and our members compete on that basis.

When you have “trading partners” who are not abiding by the same rules and are seeking not just to sell to those who wish to buy but also to actively undermine global markets, it's not only something we should be concerned about on behalf of Canadian manufacturers but also something that we know there's a bipartisan focus on in the U.S. We hope it's an area where Canada and the U.S. can align on our approach, dealing with and managing goods that are being dumped on the market in that manner.

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

That makes me think of something you said in your opening remarks about the benefit of a closer, more integrated market. It allows for the protection together against unfair trade practices. That's really what we're talking about when it comes to China. Is it not?

[Ryan Greer]

Yes. This needs to be the focus.

Canada does a lot of business with China. We sell a lot to China. Canadian manufacturers rely on a number of Chinese inputs that cannot be accessed in Canada or in the North American Market, so it is not completely one or the other. However, there are specific sectors and activities where we know China is undertaking these unfair activities. Those are where we think there's opportunity to continue to align with the U.S., in particular, and with Mexico to protect the North American market.

With that said, in fairness to Canadian negotiators and others, Canada has followed the U.S. suit, even prior to President Trump's election, with specific measures around steel and EVs. Our reward for doing so is to be punished by China and to be punished by the Americans.

An important message that Canada needs to send to our American allies is that if they want us to act in a way that is consistent with the interests of all of our shared manufacturers and their workers, they also—the Americans—need to act in a way that is consistent with those behaviours. Unfortunately, we haven't had the support or the reaction we would have liked from Americans for following suit or, in some cases, for going further on these policies.

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

Mr. Greer, do your members hear from their business partners, either their suppliers or their customers in the States, that they're as concerned about some of the developments in our trading relationship as Canadians are?

[Ryan Greer]

At the moment, everybody in the manufacturing supply chain is concerned with the current state of Canada-U.S. trade, and even with the broader geopolitical global trading environment, which is shifting, obviously, much more towards regional blocs and towards economic and national security considerations.

Broadly, all of our members—certainly all their supply chain members—are hearing a lot about the challenges of the current unjustified tariffs, the impact that's having both directly and indirectly on their businesses and their employees and what it portends for the future, because nobody, at this point, wants to make any significant long-term investments.

They say that nobody wins a trade war. I think that some of our regional competitors, in this instance, are probably winning.

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

That brings me to a point of great concern: When business senses uncertainty, capital stays on the sideline.

There's often talk in the House of Commons, to which we're adjacent, about public investment, but your members would invest a great deal of capital in their business plans, operations, expansions and the opportunities they see, and this uncertainty must be a tremendous burden right now.

[Ryan Greer]

Yes, it is. Long-term investments are being postponed or not considered at all. It's going to compound the productivity problem that our sector has and Canada in particular has have when these investments aren't taking place.

I think the opportunity, although we don't control the decision-making coming out of Washington, D.C., is that we do control our own domestic policy environment. We hope the urgency which seemed quite present several months ago remains present through the federal budget in a few short days from now and beyond to improve the domestic policy environment and to do everything we possibly can to incentivize businesses to invest in their workers, invest in their facilities and invest in their products to compete better domestically in North America and abroad.

[The Chair, Liberal, Judy Sgro]

Thank you very much.

We're moving to Mr. Fonseca, please, for six minutes.

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

Thank you, Madam Chair.

Thank you, Mr. Greer and Mr. Maddox, for joining us today and for your testimony.

Mr. Greer, I want to ask you about your membership.

How many organizations belong to the Canadian Manufacturers and Exporters? How many people would you represent across our country?

[Ryan Greer]

There are roughly 1,000 members, although we have a lot of other indirect members. Of those, that mirrors roughly the shape of the Canadian economy. Roughly 90% of our members would be small and medium-sized manufacturers and 10% would be large, with many multinationals with operations in Canada, the U.S. and Mexico in some cases.

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

With all of their employees, that would be in the hundreds of thousands.

[Ryan Greer]

Yes, that is correct.

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

It would be hundreds of thousands in aerospace, automotive, advanced manufacturing, pretty much the gamut, all sectors.

[Ryan Greer]

Yes, every vertical: steel producers and forgers, energy manufacturers.... We represent every vertical of the manufacturing industry in the country.

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

When the government is now looking at projects of national interest, where would your members like to see the focus?

Would they like to see some of those investments in border infrastructure or in the harmonization around regs at the border? What are your members looking for in that mid- to long-term range?