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.