International Trade Committee on Oct. 27th, 2025

[The Chair, Liberal, Judy Sgro]

Thank you very much.

We're going to Mr. Jeneroux for five minutes, please.

[Matt Jeneroux, Conservative, Edmonton Riverbend, AB]

Thank you, Madam Chair.

Thank you, Peter and Ryan, for joining us today.

I'm going to ask Ryan some questions.

You mentioned what I thought was an interesting statistic right off the bat that 96% of your members agreed to extending CUSMA. Is that in reference to the agreement as it exists today in full? Was that the question that was posed to them?

[Ryan Greer]

Yes, we basically asked about extending the agreement as it exists, not any hypotheticals about what could be in a revised agreement or a renegotiated agreement.

[Matt Jeneroux, Conservative, Edmonton Riverbend, AB]

That's interesting. Thank you.

On the diversification of the trading partners, we hear a lot about that at this committee and we talk a lot about what that means. From some of your testimony, I gather that it's not just a let's diversify in a trading agreement somewhere else it's what the local environment looks like.

I'm hoping you can touch on some of that, and perhaps what we can do and suggest from this committee.

[Ryan Greer]

Sure.

In general, our members are supportive of efforts to diversify Canada's export markets. Many of them are actively trying to do so right now, to try to backfill for some of the losses they've had for sales into the U.S. However, diversification is not a solution to our U.S. problem. The only solution to our U.S. problem is to solve our U.S. problem.

North American manufacturing supply chains are so deeply integrated, Most of what we're selling are inputs into U.S. manufacturing processes that are flung back across the border as another value-added part to a Canadian process. There aren't a lot of Swedish automakers crying out for Canadian auto parts.

While we're supportive of efforts to diversify, we want to make sure that manufacturers don't get lost. I think there's some more opportunity when it comes to commodities and other bulk exports. It can be very difficult to reach, manage and service in a market that isn't the United States.

I think that one thing we hope doesn't get lost in the diversification issue is that part of what's going to give manufacturers or any other business access to another market is not just the ability to sell there, but to be cost competitive there. Canada can be a high-cost jurisdiction to do business. That is offset by our geography, proximity to and access to the the U.S. market.

Any effort to diversify Canadian trade, again, which we think is worth trying to do, will need to be accompanied by a strong policy push to try to lower the cost of producing goods in Canada. That's going to mean investments in trade-enabling infrastructure. That's going to mean a more competitive and rationalized tax environment. It's going to mean a big push to lower red tape and regulatory burden from all levels of government. That's going to make our goods more competitive in Canada, in North America, but also in some of those export markets where we hope to grow.

[Matt Jeneroux, Conservative, Edmonton Riverbend, AB]

That's wonderful.

I do want to get to a de minimis question, but before I do, you mentioned that 16% of businesses have relocated production down to the United States. Are they suggesting this is lost for good? Is this a temporary measure? What's the thought process of some of these businesses that have done that?

[Ryan Greer]

Just to clarify, the 16% was from a survey we did earlier in the summer. That was of members who had some level of production capacity already in the U.S. It wouldn't be uncommon for companies that have production in all three markets to adjust as needed based on a number of factors.

What we were trying to gauge is based on the immediate threats and tariff barriers, how we were seeing.

In short, we don't have sub-questions on that 16%. Anecdotally, what we've heard is in the short term there was the thought that some of that production could be retained; it could come back to Canada. These are large facilities that have the ability to manage.

Our concern over the long term is that if there are permanent reallocations of capital or investment in facilities to fit up it will be much harder to repatriate some of that production. In the short term, we're not as concerned. In the long term, the longer the uncertainty persists we have concerns about repatriating that production.

[Matt Jeneroux, Conservative, Edmonton Riverbend, AB]

Do you think Canada should respond to the elimination of the de minimis measure?

[Ryan Greer]

We don't have a strong point of view on that given most of our members are not selling small shipments or measures. It's industrial inputs at a larger scale, so we have no real strong view on that one.

[The Chair, Liberal, Judy Sgro]

Thank you very much.

We'll go to Mr. Lavoie for five minutes.

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

Thank you, Madam Chair.

Mr. Greer, I'm very familiar with manufacturing. I've had the opportunity to work in banks, particularly in Beauce, my Conservative colleague's region, where there are a lot of manufacturers. I often worked with manufacturers during those four years in Beauce.

I'd like to comment on the survey you mentioned earlier. Its purpose was to determine whether companies were ready to accept 5% or 10% tariffs. I'm a bit surprised that the answer isn't zero. I don't know of a company that's ready to pay tariffs, because the smallest percentage is important to them.

That said, manufacturers have to invest large amounts of money in their assembly lines. Those are large sums that are necessary to stay competitive and increase productivity.

Earlier, you made seven or eight very commendable and important requests. However, we're in exceptional circumstances. We've asked the same question to every single person who has appeared before this committee. Some have more than 50 years of experience and have never seen a situation like this.

As I was saying, I used to be a banker, so I know that predictability is extremely important for companies that invest a lot of money and for bankers. In that context, our neighbour to the south isn't offering us any predictability for the next three years, and we can't count on it anymore. What's your point of view? What's your advice? Given that this predictability may not come back in the medium or long term, what's necessary to help manufacturers get through this crisis and continue growing to remain competitive?

[Ryan Greer]

On the first point around accepting a tariff, I'll use more precise language. The exact question we asked was, “At what level of tariff would your business no longer be competitive?” We weren't asking about acceptability; we were just asking, based on how their business is functioning and operating, at what level of tariff it would be competitive. That's not an easy question for them to answer, so I'm happy to clarify that.

In the business environment, if this level of unpredictability continues over the medium and long term, and certainly that is a possibility, there are a few things. One, as I've referenced before, there needs to be a great deal more urgency under the policies that Canada does control. We are hopeful. There was a big push and a lot of noise around interprovincial trade barriers and mutual recognition in the first half of this year. We understand a lot of that work is still continuing bilaterally between the provinces. I haven't seen or heard as much urgently communicated about how they're rushing to knock down these barriers. We're hopeful that work continues on an accelerated basis.

As I've mentioned before in terms of unpredictability, there are ways around tax incentives, regulatory burden and red tape that we think could really help incentivize investment and help lower some of the risk in other areas where manufacturers will continue to see it on the trade front.

In broad strokes, the most important thing we can do is to try to reach a good deal—not any deal, but a good deal—with the U.S. both bilaterally and, of course, through the CUSMA process.

I know there have been some who have advocated a patient approach and letting the political process south of the border play out. I would imagine those are coming from sectors that are less directly affected than manufacturing has been. Some 60,000 jobs were lost between January and August in the manufacturing sector, and I expect we'll see an increase in that number here in the weeks ahead.

Our view is that we should do everything in our power that is reasonable and fair to not let that uncertainty persist, at least as it relates to the current tariffs and the CUSMA agreement for as long as you were speculating.

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

Unfortunately, Mr. Greer, unpredictability is one of the things we don't control. I'm happy that you're satisfied with the removal of interprovincial barriers for manufacturing trade.

Mr. Maddox, we're still in women's month. I've heard that you promote SMEs and independent entrepreneurs, particularly women and youth. Why?

[Peter Maddox]

Absolutely. Historically, a lot of women have come into entrepreneurship through our industry. Some of them stay there. In other cases, they get a taste for entrepreneurship and they go on to open their own stores, create their own products or build their own businesses. We call it an on-ramp to entrepreneurship. It's a very important stepping stone to give those women a taste of getting into that and then moving on to something that can continue to create even more dividends for the Canadian economy.

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

Thank you.

[The Chair, Liberal, Judy Sgro]

Thank you very much.

We'll go to Mr. Bonin for two and a half minutes, please.

[Patrick Bonin, Bloc, Repentigny, QC]

Thank you, Madam Chair.

Mr. Greer, according to the Wilson Center's Canada Institute and the Centre for Canadian Studies, if there is no signature to extend the Canada-United States-Mexico Agreement over a long period, President Trump may want the first joint review to lead to further annual joint reviews. According to them, that would enable the United States to regularly get concessions from Canada and Mexico.

If the United States refuses to extend the agreement for several years, are you concerned that these annual reviews will become the norm and lead to more uncertainty?

[Ryan Greer]

Yes, I think that's a concern.

The preferred outcome of the CUSMA process, from our perspective, would be that parties agree to renew the agreement in 2026, even if that involves some very hard discussions and trade-offs, to try to get more certainty. I don't think this rolling annual sort of review and re-evaluation process in which parties could try to solicit or extract new concessions is good for manufacturing investment and uncertainty. We would expect that to be borne out in how our members would invest in their business and, frankly, how manufacturers in the U.S. would also make decisions.

Whether you agree with it or not, I think the working theory by many of the people pushing the pro-tariff policy in Washington, D.C. is that if there is long-term certainty that tariffs will persist, then manufacturers will make investments to get behind that tariff wall. If there is not long-term certainty that it will remain, then manufacturers will not be incentivized to make those investments in the U.S.

I expect that uncertainty would not just impact manufacturers in this country. It would severely impact manufacturers in the U.S. and Mexico as well.

[Patrick Bonin, Bloc, Repentigny, QC]

You talked a little bit about the harmonization of standards. Can you talk a bit more about your recommendations on the matter, for example in the aeronautical sector, the agriculture sector or the aerospace sector?

[Ryan Greer]

There's nothing specific except to say that there was a chapter negotiated in CUSMA around good regulatory practices that has not been used.

You may recall that there used to be the Regulatory Cooperation Council, which did some work I participated in among other industry folks where Canadian and American regulators would gather in Ottawa and D.C. and address very specific sectoral ways to align.

Frankly, just restarting a process for those discussions to happen on a more proactive and ongoing basis would be beneficial. I'm not sure it will be realistic in the short term, but if we can get some sort of certainty around CUSMA, we believe that chapter could be used to start productively having discussions again about running in the opposite direction, which is how we can make it more cost competitive to manufacture and build things in North America to compete against the rest of the world, instead of what we're doing now, which is, of course, introducing more cost and uncertainty.

[The Chair, Liberal, Judy Sgro]

Thank you very much.

Mr. Chambers, go ahead, please, for five minutes.

[Adam Chambers, Conservative, Simcoe North, ON]

Thank you, Madam Chair.

Mr. Maddox, I have at least one question for you.

On the de minimis rules that I believe you mentioned in your opening, is that your members selling items underneath the value to Americans? How do those rules affect your members?

[Peter Maddox]

De minimis affects going both ways over the border. We have members that are U.S.-based companies. Even though the individual seller of that product is in Canada, the product is shipped from a distribution centre somewhere in the U.S. into Canada, so they take advantage of Canada's current de minimis rules. They're obviously very supportive of that happening. When they sell to that consumer in Canada, there's someone in Canada—a little entrepreneur—who is making some commission off that sale.

In the other direction, we obviously have Canadian companies that ship into the U.S. market and have taken advantage of that CUSMA exemption in the past.

Interestingly, going back to the last time we negotiated NAFTA 2.0, as we were calling it then, the U.S. wanted everybody to go up to $800 as a de minimis level. They wanted a high de minimis level for everybody. Now they've taken it back to zero, which is quite a change.

Obviously, if our members that are in Canada now want to ship into the U.S., they have to collect duties on every single delivery that's going down there. There's quite a lot of paperwork to look at. CUSMA compliance can get you around that, but CUSMA compliance is not a silver bullet that works for everybody. A lot of our members are global companies, so they have products that are manufactured with ingredients from various different markets. CUSMA compliance really doesn't come into play there either.

[Adam Chambers, Conservative, Simcoe North, ON]

Would you say it's important, as part of the negotiation, to deal with the de minimis rule? You would like it to go back to what it was, I assume.

[Peter Maddox]

We would like to have an equivalent rule between the three CUSMA nations.