THE STANDING SENATE COMMITTEE ON FOREIGN AFFAIRS AND INTERNATIONAL TRADE
EVIDENCE
OTTAWA, Thursday, October 2, 2025
The Standing Senate Committee on Foreign Affairs and International Trade met this day at 10:32 a.m. [ET] to examine and report on such issues as may arise from time to time relating to foreign relations and international trade generally.
Senator Peter M. Boehm (Chair) in the chair.
[English]
The Chair: Honourable senators, my name is Peter Boehm. I am a senator from Ontario and the chair of the Standing Senate Committee on Foreign Affairs and International Trade.
[Translation]
I will now ask committee members to introduce themselves.
[English]
Senator Adler: I am Charles Adler, a senator from Manitoba.
[Translation]
Senator Hébert: Martine Hébert, senator from Quebec, District of Victoria. Welcome.
Senator Gerba: Good evening, minister. Amina Gerba, senator from Quebec.
[English]
Senator McNair: John McNair, a senator for New Brunswick.
Senator Ataullahjan: Salma Ataullahjan, a senator from Ontario.
Senator Ravalia: Welcome, minister. Mohamed Ravalia, Newfoundland and Labrador.
Senator MacDonald: Welcome, minister. Michael MacDonald, Cape Breton, Nova Scotia.
Senator Harder: Peter Harder, Ontario.
Senator Boniface: Gwen Boniface, Ontario.
Senator Wilson: Duncan Wilson, British Columbia.
Senator Pupatello: Sandra Pupatello, from Windsor, Ontario.
Senator Woo: Yuen Pau Woo, British Columbia.
Senator Al Zaibak: Mohammad Al Zaibak, Toronto, Ontario.
[Translation]
The Chair: Welcome everyone, colleagues, as well as all Canadians who are following our proceedings on ParlVU today.
[English]
To support the smooth operation of committee proceedings, the following guidelines must be observed by all participants to help prevent audio feedback. Consult the cards placed on the committee tables for guidelines to prevent audio feedback incidents. Keep your earpieces away from all microphones at all time. Microphones must not be touched. Activation and deactivation will be managed by the console operator. Avoid handling your earpieces while the microphone is active. Earpieces should either remain on the ear or be placed on the designated sticker at each seat. Thank you for your cooperation, and I think you all agree that the safety of our staff and particularly our interpreters is important in this context.
Colleagues, today we are meeting under our general order of reference to discuss the Canada-United States-Mexico Agreement, or CUSMA, and Canada’s trade relationships with the United States and Mexico.
Today, we have the honour of welcoming the Honourable Dominic LeBlanc, P.C., M.P., President of the King’s Privy Council for Canada, Minister of Internal Trade and Minister responsible for Canada-U.S. Trade, Intergovernmental Affairs and One Canadian Economy. I think I have that right, minister, all of it.
Hon. Dominic LeBlanc, P.C., M.P., Minister responsible for Canada-U.S. Trade, Intergovernmental Affairs and One Canadian Economy, Global Affairs Canada: You could repeat it in French, too, Mr. Chair. It sounds so impressive.
The Chair: We want to get to your statement and to your questions, minister. We thank you for taking the time for being with us today. We know you’re very busy.
The minister is joined by officials from Global Affairs Canada: Rob Stewart, Deputy Minister of International Trade, and Martin Moen, Associate Assistant Deputy Minister, Trade Policy and Negotiations.
Before we hear your opening statement and proceed to questions and answers, I would ask everyone present to please mute notifications from your devices so we can give our full attention to this meeting and to the comments of the minister.
Minister, we’re ready to hear your opening remarks. These will be followed by questions from senators. As per usual, you have a maximum time of 10 minutes. If you can do it in less than that, I would be very grateful, and we can get more questions in. You have the floor.
Mr. LeBlanc: Mr. Chair, thank you. I will endeavour to leave enough time to have questions and receive, I hope, advice and suggestions from you, Mr. Chair, and your colleagues.
As I walk into this building, I always stop and look at my dad’s portrait on the wall, and I saw your immediate past Speaker, Senator Furey, with whom I have the privilege of having lunch today. He is in town. It made me smile to see George’s portrait on the wall as well.
[Translation]
Thank you, Mr. Chair, for giving me the opportunity to appear before you, along with my colleagues, the senior officials who are with me today.
Congratulations on your appointment, Mr. Chair, as chair of this important committee for Canada’s policy on foreign affairs and international trade. I look forward to working with you and your colleagues.
As I said, it is a privilege to speak with you about Canada’s trade and economic relationship with its North American neighbours.
[English]
North America, as you know, is one of the largest economic regions in the world, encompassing a $42 trillion regional market of around 500 million consumers.
Thanks to the Canada-United States-Mexico Agreement, or CUSMA — when we are in the United States, it is the USMCA, and in Mexico, they use their acronym — the total trilateral trade in goods and services was worth C$2.5 trillion in 2024, an increase of 35% since CUSMA came into force in 2020.
CUSMA was designed to be responsive to shifts in the North American and global economic landscape. This is why, in 2026, the three parties to the agreement will enter a joint review process — this was contemplated when it was signed and came into force — to review its operations and ensure that it remains fit for purpose.
[Translation]
While our government was preparing for this review, we launched a second phase of public consultations. We want to hear from industry, labour organizations, provinces and territories, Indigenous partners and civil society to guide our approach to reviewing CUSMA.
Obviously, we will be very pleased to work with you and your committee, Mr. Chair. If you have advice or ways to support the review and consultations, we will be listening. We look forward to working with you.
[English]
This review comes, Mr. Chair, at a time when the dynamics of global trade are being challenged. The imposition of unjustified tariffs by the United States has introduced uncertainty, and the old model built on deepening integration and assumed stability can no longer be taken for granted.
We must fundamentally reimagine our economy by building at home and by diversifying our commercial relations abroad. The One Canadian Economy Act, which I had the honour of speaking to at a committee of your chamber, enables us, to a considerable extent, to meet this hinge moment. With this act, we’re removing internal trade barriers and moving forward on nation-building projects which we believe will be able to transform the Canadian economy.
[Translation]
Canada has what the world needs. The Prime Minister often says so. I accompanied him during some trips abroad. We hear it when the Prime Minister of Canada is travelling abroad. It remains a reality that will inspire us to find such opportunities.
Our 15 free trade agreements cover 61% of the global GDP. They are extraordinary levers for trade diversification. The United States remains our largest trading partner, however. Geography made us neighbours, history made us friends. Our trade relationship, as you are well aware, is essential. Our diversification efforts must therefore be accompanied by a redefinition of our economic relationship with our southern neighbour.
[English]
For decades, the Canada-U.S. relationship has been the cornerstone of economic prosperity. It has delivered tangible benefits to citizens, workers, families and businesses alike on both sides of the Canadian-American border. Every day, over $3.4 billion worth of goods and services cross that shared border, supporting millions of jobs and driving innovative collaboration that strengthens North America’s competitiveness.
That partnership, however, has been put to the test in recent months by the imposition, as I said a minute ago, of what we believe to be unjustified tariffs by the United States.
Canada is engaged in ongoing discussions with the United States to address these tariffs. We’re having discussions on sector-specific tariffs they’ve applied under section 232 of their legislation — automobiles, steel and aluminum being obvious examples.
We are seized with the impact these tariffs are having on our industries. We’re taking the time necessary to secure what, in our judgment, might be a good deal for the Canadian economy. We’re making progress. We’re not there yet but, Mr. Chair, that work continues.
[Translation]
We also have continuing commitments with our Mexican counterparts.
Mr. Chair, you and your colleagues are well acquainted with our relationship with Mexico. Last month, I had the opportunity to accompany the Prime Minister during his visit to Mexico. We had productive and highly collaborative meetings with President Claudia Sheinbaum. I’ve spent a great deal of time with the minister of the Mexican economy, Marcelo Ebrard, and with private sector leaders who accompanied us.
As Canada’s trading partner within CUSMA, Mexico remains a vital strategic ally.
[English]
In closing, Mr. Chair, our priorities remain clear: defend Canada’s economic and security interests; strengthen the Canadian economy by building domestically at home, and provinces, territories and the private sector are encouraging partners in this regard; and strengthen our economy by creating trading opportunities for all Canadians. An essential element of that must necessarily be the relationship with the United States, of course, and the trilateral relationship with our Mexican partners as well. It’s by every means not the only book of business for Canadian entrepreneurs and industries to pursue. We’re trying to do all of this work at the same time, enormously encouraged by the attitude and support of Canadians, our partners in the federation, Canadian business and union leaders as well.
I look forward, Mr. Chair, to the conversation. How did I do on 10 minutes?
The Chair: You were 8:20, not bad.
Mr. LeBlanc: That might leave Senator McNair a question, if I’m lucky. Thank you.
[Translation]
The Chair: Thank you, minister. I wish to inform members that we have a 90-minute panel today, but that the minister and deputy minister must leave at 11:30.
[English]
Mr. Moen and two other officials will be with us from 11:30 until noon.
Colleagues, you will have a maximum of only three minutes for the first round. I want to ensure everyone can get questions in. I would encourage you, as I always do, to be concise. Don’t have long preambles. Be precise in your questions so we can put more pressure on the minister to respond appropriately. It’s first come, first served. The list is already in progress.
[Translation]
Senator Gerba: Welcome, minister.
The government says that Canada has the best deal in the world with the United States through CUSMA, which covers about 85% of our exports to the United States. However, a number of experts have explained that fewer than 60% of agri-food products, including products from Quebec, actually benefit from these exemptions due to the complexity of rules and certification requirements.
Those companies are fully exposed to U.S. tariffs. Is the government aware of that reality and what is it doing to help small and medium-sized businesses that do not have the means to take advantage of CUSMA?
Mr. LeBlanc: Thank you for the question. You’re absolutely right.
Nowadays, approximately 85% of the value of our exports to the United States comply with the free trade agreement and are not subject to tariffs. If we exclude strategic sectors in which the Americans imposed the application of section 132 on steel and aluminum, automobiles and softwood lumber, about 95% of Canada’s exports can comply with CUSMA.
Furthermore, if we remove the application of sectoral tariffs, there is a decrease to 85% of the value. You’re absolutely correct in identifying a sector that is among a number of industries struggling to comply with CUSMA rules or that are subject to U.S. non-tariff barriers.
It is no secret that in our discussions with the Americans, they raise exactly the same issue with us. Mr. Trump often says publicly that the Americans have no shortage of opportunities to say that our insistence on protecting supply management represents a non-tariff barrier to their access to the Canadian market. That is the argument he puts forward.
Both privately and publicly, we inform them that it’s not up for negotiation. However, I wonder if that’s not one of the reasons behind a series of mounting American measures, which, as you say, create circumstances — especially for SMEs, but also for large agribusinesses that I meet with, who are facing challenges in some cases, for certain products.
The Chair: Thank you, Mr. LeBlanc. We have gone over the three-minute period.
[English]
Senator Ataullahjan: Welcome, minister.
Minister, in this committee many years ago, when we were doing a study on East Asia, we heard about Canadian businesses being risk-averse. We heard we need to diversify. Can you share with us what plans your government has to secure markets outside our traditional markets?
Mr. LeBlanc: Senator, that is an excellent question. I’ll endeavour to be brief because perhaps the deputy could add some precision.
You’ve identified in a brief but poignant question the challenge for Canadian businesses. “Risk-averse,” you’re right, became an expression or a phrase that encapsulated a number of decades of our trading relationships. If you’re living next door to the world’s most important economy and you have a free trade agreement that had largely been respected over the decades, you can see how, human nature being such, you develop the path of least resistance. It has benefited us. As I said in my opening comments, it has resulted in millions of jobs on both sides of the border. It’s brought great prosperity. When we suddenly see that that trading partner is not as reliable as we might have thought two years ago or ten years ago, therein lies the big challenge.
The President of Indonesia was in Ottawa last week. There is an example of a free-trade agreement with the fourth-most populous country in the world. It had been negotiated over a number of months, but the signing was an important first step in identifying those opportunities.
I’m leading a trade mission to Mexico in the coming months with Canadian businesses, big and small, that are very enthusiastic about deepening the bilateral relationship with Mexico, with whom we benefit from a free-trade agreement that is working quite well.
There are opportunities in developing economies. My colleagues in cabinet talk about opportunities in African countries and other Asian countries to deepen commercial relationships. Small- and medium-sized businesses have challenges, in some cases. Federal instruments — Export Development Canada and Global Affairs Canada — can support these businesses. We have to celebrate their successes. In my region, there are small businesses in Atlantic Canada that have developed markets. Some are exporting to Caribbean countries successfully, for instance. It started off, perhaps, with some difficulty, but there are big successes there. We have to use those to incite or help others to look that way.
Mr. Chair, am I out of time? Are you going to cut off Rob Stewart?
The Chair: You have five seconds, so you are effectively out of time, but if he can do it in five seconds?
Rob Stewart, Deputy Minister of International Trade, Global Affairs Canada: We have quite an extensive agenda for trade diversification that we’ve been pursuing for a number of years, and that has obviously become more important. The Indo-Pacific region, as the minister has mentioned, is a particular focus.
Senator Ravalia: Thank you, witnesses.
Last fall, senators on the Fisheries Committee heard from GAC and DFO that the machinery of government functions for the Great Lakes Fishery Commission would be moved entirely from DFO to GAC. When can we expect this change to occur, potentially reducing an irritant between our two countries, particularly in light of the current tensions?
Mr. LeBlanc: Senator, that’s a very good and technical question.
I was the Minister of Fisheries and Oceans for two years. I loved that job. One of the exciting things for me was to learn about inland fisheries. If you come from Atlantic Canada, you perhaps don’t realize that, in the north, on the Prairies and in Ontario, there are significant issues around conservation. I learned about those issues six and seven years ago.
I am not familiar at all with the machinery changes — in fact, I’m learning that from you — but I’m happy to undertake with the deputy to get back to you with a written answer to that. I’m loath to make up an answer, so I would be happy to get back to you with that precise information.
Senator Ravalia: Thank you very much. The members of my committee would sincerely appreciate that.
Do I have time for a followup?
The Chair: A very quick one.
Mr. LeBlanc: “The machinery of government” is a very bureaucratic phrase. Some of you like that. Senator Harder, I saw you sit up straight.
The Chair: Yes, it’s reflexive.
Mr. LeBlanc: In my riding, “machinery of government” is a snowplow or a slow blower. This is good.
The Chair: Senator Ravalia, you still have a half a minute, if you want to get a quick question in.
Senator Ravalia: This is a very quick yes or no. Do you feel that the protection of supply management creates potential jeopardy for ongoing future negotiations with the U.S.?
Mr. LeBlanc: It’s a fundamental question. The short answer would be “no.” “Jeopardy” is a big word. No. We have been clear with the Americans, privately and publicly. Again, I reasserted that yesterday in light of a story that appeared in The Globe and Mail. No, I don’t think it puts things in jeopardy. It’s a fundamental tenet of our economic and food security policy. The Americans understand that. There were changes made six years ago, but we intend to be very consistent in that regard. If I think of discussions that are focused on strategic sectors under a lot of pressure now — steel, aluminum, automobiles, softwood lumber — those discussions are not being put in jeopardy by the supply management system. It comes up from time to time, and our answer remains consistent.
Senator Harder: Thank you very much, minister.
I want to follow up on your comments about the need to redefine our relationship with the United States. I think that redefinition is not just growing markets elsewhere; it’s the relationship itself. Can you give us a sense of the expectations we should have on how the Trade Expansion Act section 232 tariffs plus softwood will move forward in the context of CUSMA renegotiation? Should we expect the folding in of those issues, or can we solve them separate from the CUSMA negotiations?
Mr. LeBlanc: Senator Harder, thank you for that question.
As I said, and I think the Prime Minister has said this, we are in discussions with Americans on the sectoral tariffs, the section 232 tariffs. It’s bringing significant pressure to Canadian industries and workers. It’s also bringing pressure to the American consumers. Those discussions take place at a series of levels. The Prime Minister has said publicly that he communicates informally and formally with President Trump. I speak to Secretary Lutnik quite regularly. Ambassador Hillman talks to the U.S. Trade Representative, Ambassador Greer. The clerk and other senior officials have been in Washington for meetings with senior officials. Ambassador Hillman is there. We set up meetings to talk about some of these sectoral tariffs.
Senator Harder, I’m not seeing a dead end in those conversations. I’m seeing all three countries get ready for the CUSMA review. Our consultations, the Mexican consultations and the American domestic consultations were launched. Ambassador Greer, the U.S. Trade Representative, has talked to us about their domestic preparation for the review. It has not been inflammatory; it has been constructive. We expressed the desire that we, all three countries — it was the same discussion with the Mexicans — could prepare domestically for that review with our industries, sectors of our economy and workers to get ready for that conversation but in a collaborative, constructive way. So far, the review preparations in all three countries have been that way. My hope is that that continues.
At the same time, we continue to have conversations on the sectoral tariffs. Nobody has yet suggested that we fold it into the CUSMA review. We would hope that we might make progress before that. If we’re not making progress and we have to put that into a CUSMA review process, your experience in these issues, Senator Harder, is vast, so you would understand that it would bring more structure, perhaps, in the sense of a trilateral relationship, technical tables and sectoral conversations. However, I’m hoping we can get progress before the review process formally engages. Time will tell if my optimism is misplaced.
[Translation]
Senator Hébert: Thank you, minister, for being with us today. It is always interesting to hear what you have to say.
My question is about the sectoral agreements. At some point, there was talk of agreements with the United States on certain sectors, such as defence and energy, which could also allow us to ease the pressure on aluminum, for example, and certain things. We know the United States has signed some of those recently. Mr. Trump, during his visit to the United Kingdom, talked about that. Where are we with the desire that was expressed by the government at some point? Is that still part of the Canadian strategy in relation to the United States?
Mr. LeBlanc: Senator, when you spoke about sectoral agreements, you mentioned defence as an example. Are we talking about critical minerals and energy? It is that kind of thing?
Senator Hébert: Absolutely.
Mr. LeBlanc: Excellent question, very pertinent. In our conversations with the Americans — to echo the question from your colleague Senator Harder — we obviously emphasize the importance of alleviating, lowering, and eliminating the sectoral tariffs that apply, and of respecting the free trade agreement. Very often in these conversations, our American counterparts talk to us about the things they want to do with Canada. You mentioned defence. During the election campaign, Mr. Carney spoke of redefining the economic and security relationship with the United States. That includes precisely those two elements.
President Trump often talks to us about investing in national defence and in modernizing our continental defence. You are correct: He talks to us about energy projects, about access to certain critical minerals that Canada has and the United States does not.
Obviously, we will consider and discuss these issues in a context that is advantageous to Canada’s economy and sovereignty. That doesn’t mean there isn’t some overlap with the interests of our American friends. If we can have ultimately constructive conversations and agreements in this regard, I daresay this will become a way of showing our American friends that, together, if we do this kind of thing in a collaborative manner, it is easier than imposing tariffs on each other and causing economic disruption. I have told them, and I say this publicly, that the Canadian people have been deeply concerned. We saw this during the Ontario and federal elections with the discussions aimed at preventing Canadian sovereignty. It becomes more difficult to reach agreements that are in the economic interest of both countries’ sovereignty and security if the context or background noise is complicated.
I hope that it will help us.
The Chair: Thank you, minister.
[English]
Senator Boniface: Welcome. I wish to return to the original discussions that brought some of this to the forefront around our border. I’m taken back by the fact we hear very little about the fentanyl issue, which I think the Canadian officials have communicated well. When you get into these discussions, one, do you anticipate that coming back up with more issues; and two, I wish to ask what you see as the potential in a bilateral agreement with Mexico?
Mr. LeBlanc: To start with your first question, you’re right. So much of this has evolved in such a short period of time that we forget that the initial American imposition of reciprocal tariffs on Canada and Mexico was because of border security issues and fentanyl.
I was the Public Safety Minister during a significant period of the initial conversation with the Americans. The RCMP and Border Services, with American partners, do terrific work every day. I think Canadians don’t understand the extent to which that work is successful, strategic and based on effective intelligence information, done collaboratively with embedded American partners on both sides of the border in a myriad of organizations. At any one time — I have said this to Secretary Lutnick and others — at any one time on the Saint Clair River, there are Canadian and American border officers in the same boat, patrolling, surveilling the border.
All of the investments that the government made, senator, are in the national security interest of Canada. To have a border that is strong and secure is absolutely in Canada’s interest. Clearly, President Trump and his American administration were concerned about the border. They have significant challenges on the southern border. We didn’t diminish at all their concerns on the northern border. We wanted to show them that we were a willing and enthusiastic partner to do what is necessary to further secure that border. We can always do more together.
There is a good story to tell. I think they acknowledged to us, publicly and privately, that there has been a lot of good work done. There have been significant investments — 2,000 more border security and federal RCMP. You know the list well. We’re getting results. We’ll have to continue to do that work because it could be lost if there were an incident or circumstance that drew attention to a challenge. Every morning, if you’re the Commissioner of the RCMP or the president of CBSA, you would worry about waking up and finding a circumstance that garners a lot of media attention in the United States. We are going to continue to do that work. I’m optimistic. That has been significantly reduced as a constant subject of discussion, but it remains the justification for those reciprocal tariffs.
The CUSMA carve out has put us in a much better position than other countries, and that includes Mexico, but we still think that should be lifted. The bilateral agreement with Mexico —
The Chair: Minister, I’m sorry. I am going to have to interrupt you.
Mr. LeBlanc: That’s terrible. The deputy just gave me a note of some really incisive points.
The Chair: I am sure we’ll get to that. We’re always keen on incisive points.
Senator MacDonald: Minister, it is good to see you again.
I want to talk about our approach to tariffs in general. I am in the minority on this. I have always been of the position that we should not have imposed tariffs. I thought it was a bad negotiating position for us with the Americans, with little effect. There were no tariffs put on the CUSMA arrangement itself. Now the Prime Minister has withdrawn most of these counter-tariffs. Is that not an admission that the tariffs were not a good idea in terms of our negotiating with the U.S.? I would like your opinion on that. Do you think it got us anywhere?
Mr. LeBlanc: Senator MacDonald, thank you for that question, and you’re right. There is a series of commentary that looks back on that moment and thinks perhaps different decisions may have been made. Other countries made different decisions. I accept or acknowledge the premise of the question. That view is not unique to you. It is shared by a number of others that have spoken about that, and I have asked myself that question as well.
It’s important to remember that when President Trump initially imposed — back to your colleague’s question — the reciprocal 25%, and it went to 35%. IEEPA — like all senior bureaucrats, Mr. Chair, there are acronyms everywhere here — those initial reciprocal tariffs, there was no CUSMA carve out. Secretary Lutnick called me two days later to say that they had decided to apply a carve out for exports that are compliant with the rules of origin of USMCA. Initially, in the hours that followed the imposition, it felt like a 25% across-the-board tariff. The CUSMA carve out came quickly. We maintained the retaliatory tariffs in position until the Prime Minister announced their removal a month or a month and a half ago. A number of other countries, as significant as the European Union, were saying on that night, on February 1, that they were going to retaliate as well. “Wait until you see what this country does. Oh, my God.” They changed their plans as well.
It’s an interesting political science or public policy class to wonder or look back on those hour-by-hour decisions. I think Canadian public opinion wanted the government to respond. However, it’s gone full circle. The time has come now, as we look at reviewing CUSMA, to ensure that we’re not in a different position than our Mexican partners and that we get to those conversations with the Americans in a position that reflects their CUSMA exemption. We have maintained our retaliatory tariffs — in some cases, at a lower level — on those strategic sectors. We said that clearly to the Americans when we announced the removal of the retaliatory tariffs.
Senator Woo: There is a view in the Trump administration, particularly the MAGA wing, that the priority for the United States should be hemispheric. We saw that in the national defence strategy that came out a few weeks ago, focusing on the homeland with a view to containing or countering China. Presumably, this would mean some version of deeper integration with a common external tariff on particular products. Directed at China and, I suspect, at other countries, there would probably be some sort of regulatory alignment or common practices on the border, essentially what some people would call “fortress North America.” Is this a view that the Canadian government subscribes to?
Mr. LeBlanc: Senator Woo, you have asked a complicated question. I’ll give you a general perspective, and the deputy might add something after.
You’re right. There is speculation in American media and in Canadian public opinion or public policy contexts. The phrase “fortress North America” gets used to often describe — I’m not a trade expert, but as I understand it, you’re right that it’s common measures that would apply to other countries that would create sort of a common market in North America.
I have had conversations with the Mexican Economy Secretary, Marcelo Ebrard. Even as among the three partners in CUSMA, again, the ability to identify other countries outside the trilateral relationship and apply similar measures will have some different and disparate effects in all three countries. That’s why, as a premise, it hasn’t been the easiest place to land on.
I have spoken with Premier Moe. I had dinner with Premier Houston of Nova Scotia last night. There is concern about the Chinese retaliatory tariffs on the seafood industry in his province. We talked about that last evening with Premier Houston. Colleagues know the story about canola in terms of effect of the Chinese tariffs in response to decisions that Canada made during the Biden administration. Again, if you want to see how quickly this evolves, Canada made a decision at the end of the Biden administration to stand up these tariffs. The Chinese responded, and that wouldn’t have been a surprise for anybody, but it is a pretty significant challenge in those sectors now.
I know the Prime Minister and the Deputy Minister have had a series of meetings, to stick with the Chinese example, with counterparts there. I know this is a subject of discussion.
Rob, do you want to add something specifically around the “fortress North America,” to use that phrase that means different things at different moments?
Mr. Stewart: I would say that we, like many countries — and this is not limited to the United States; it includes Mexico and the EU — have problems with the way the Chinese economy is operating and the issues of oversupply and subsidization that generate highly competitive products to and in our markets. We have all taken measures to try to resist or facilitate our own economic resilience. So this is not a “fortress North America” issue; this is a Chinese economy issue.
The Chair: Thank you very much for that, Mr. Stewart.
Senator Al Zaibak: Thank you, minister and your team, for being with us today.
What leverage does Canada hold, realistically, against the current hardline trade approach with the U.S. given that the digital service taxation was removed and our retaliatory tariff was removed? Practically, what other leverages do we have in our negotiations? Also, what practical tools do we have to defend the Canadian economy, industries and workers?
Mr. LeBlanc: Senator, thank you for the question.
You’re right. You identified decisions the government has made. Your colleague Senator MacDonald asked about retaliatory tariffs, and you identified some particular legislative measures that the government decided to suspend the application of. There are other leverage points and things that the Americans talk to us about. It goes back to your colleague’s question around other sectors where perhaps our American friends seek enhanced cooperation. I’m a little loath at a public hearing to go into those details. I have been told by people with a lot more experience in these negotiations than I have had that it’s important to keep those discussions private until, hopefully, we get to an agreement that we decide is in the interest of the Canadian economy.
“Leverage” is a dramatic word, but there are common interests — that might be a gentler phrase — that we have with the Americans. There is a whole myriad of them. Any first-year economics course could identify a whole basket of things that are in the economic, social and security interests of both countries. Those conversations are positive and dynamic. Those are obvious points of potential collaboration.
However, senator, there is also a reality that if you put a 50% tariff on aluminum coming in from around the world but 65% of the American aluminum, I think, comes from Canada — or a very significant portion of the American importation of aluminum comes from Canada — they have added a 50% tariff on it, so if you’re the CEO of Ford and all of your Ford F-150 and F-250 trucks are made with Canadian aluminum imported by the manufacturer into the United States, it’s an inflationary pressure on those trucks. That is just one example, among others.
We are confident that the domestic pressures from senators, governors, business leaders and union leaders in the United States will also potentially create an opportunity for us to come to an agreement with the American administration that is in the interest of both economies. Their concern is American workers and the American economy. We respect that. Our responsibility is to the Canadian economy, workers and businesses. But there are so many lines of intersection in those conversations that the goodwill and the open conversations that we’re having, in my view, may allow a number of those intersecting lines to lead to what would be an agreement that puts us in a better position than we’re in right now.
As your colleague said in the opening question, we still have a better circumstance than any other trading relationship with the Americans, but it’s not what it was a year ago, so we want to improve it.
Senator Wilson: Thank you, minister.
You spoke about aluminum, and we are regularly seeing that so many of these tariffs are the Americans acting against their own self-interest. One I would like to ask you about specifically today is the softwood lumber industry. These measures are not unprecedented. We have certainly seen it before; this is a perennial issue. It existed long before the current administration and will probably exist into the future. I am hearing my premier talk about how the United States’ biggest ally has higher tariffs than Russia would have if it were exporting lumber to the United States. I’m curious about your perspective in terms of whether this is a resolvable issue or if we will have to look at something else.
Mr. LeBlanc: Senator Wilson, thank you for the question.
You would know from your previous work in institutions as important to the Canadian economy as the Port of Vancouver the importance of that sector, not only to your province but in every province across the country. I saw Premier Eby when he was in Ottawa two weeks ago. The impacts in his and your province alone are very significant, but that pressure is felt in every other corner of the country with respect to softwood.
You’re also right, senator, and I have said it’s somewhat adjacent to the section 232 tariff conversations. For us, it’s a strategic sector that needs urgent support. The government can support the sector, but the long-term solution has been a series of agreements reached, as you say, over a couple of decades. Mr. Harper’s government dealt with this, as did Mr. Martin’s and Mr. Chrétien’s. When I was a backbench MP in my first term, then-trade minister Pierre Pettigrew was dealing with this.
You’re right that there is a long tail to this conversation. It’s driven by a U.S. lumber coalition that has a lot of influence. It’s not the president’s section 232 authorities. As you know, it’s a series of decisions, investigations, countervailing and anti-dumping decisions by the United States.
I have met with the Canadian industry. The deputy and I had a meeting this summer with senior leaders, including the big companies in your province and the Canadian lumber trade association. We talked to the Americans about getting to a negotiated agreement. There is pressure in the United States on home builders and the cost of homes when it’s $200 per thousand board feet more to buy Canadian lumber as opposed to southern yellow pine in the United States because the U.S. market puts a premium on the high-quality fibre they are getting from Canadian partners. Right now we’re at 24% or 25% of the U.S. softwood lumber market, senator, and the industry is telling us that if we can negotiate, we come to an agreement, but the American government has to then get the consent or the cooperation of their lumber coalition.
We raise it all the time. I am optimistic that if we get to a circumstance where there is an agreement in other sectors, the Government of Canada continues to say we want to attach the softwood lumber sector to an improving economic relationship with the United States. We’ll continue to maintain that position and do that work. We’re not there yet. The price of lumber in the United States is way down. It’s a series of circumstances that makes this difficult. I talk to the sector and the premiers a lot, as does the Prime Minister, and we will not rest in terms of coming to an agreement with the United States that deals with strategic sectors if we don’t also have a significant improvement in the current position, which is untenable in the softwood lumber sector.
Sorry, Mr. Chair. Was that way too long?
The Chair: It was great. Thank you very much.
Mr. LeBlanc: Thank you.
The Chair: Colleagues, we have come to the end of the first round. We also have two senators present today who are not normally on the committee. They came out of interest. I will offer Senator Pupatello a chance to ask a question, and Senator McNair, if he wishes.
Senator Pupatello: I appreciate that. Thank you.
Thanks, minister and colleagues, for being here today. You likely realize I’m at the epicentre of the trade war where I come from in Windsor, Ontario. Twenty-five per cent of the national trade comes through our corridor, Windsor-Detroit. These tariffs are mightily impactful on our industries. In Southern Ontario in particular, the latest expansion of the section 232 tariffs about a month ago all of a sudden encompassed far more product and captured basically the rest of the product lines that weren’t captured and protected by CUSMA, so we have a vested interest in how we’re doing here.
I’m really glad we don’t just throw a deal on the table to the Americans like the EU did, like Japan did and say, “How about, 5, 10, 15?” I’m glad we didn’t do that because it bought us time for the Americans to realize that their people really are paying the tariffs. That message is now starting to bubble up through their leadership. I hope we can keep holding on. The challenge, of course, is the level of support for our businesses to get through this while they realize we didn’t make this up. This really is an integrated marketplace for manufacturing in particular, amongst other sectors.
One particular issue you’re likely hearing about is how they figure out what the tariff is that we’re to pay because it’s so complicated and the penalty is so severe and harsh. If they get it wrong, they actually are threatened with never being able to trade with the U.S. again. I don’t know how our government can respond and what you can do behind the scenes with our counterparts.
Mr. LeBlanc: “If they get it wrong.” Who is “they”?
Senator Pupatello: The American system then says you have to pay it on this portion of this product and this portion of this product. It’s very difficult to calculate how our Canadian companies are to pay. They are so worried about getting it wrong because the penalty is so harsh.
The Chair: Minister, you have about a minute to respond.
Senator Pupatello: That’s a real issue for our companies. In the meantime, you’re doing as good a job as you could possibly do under these circumstances.
Mr. LeBlanc: Senator, on the premise of your question, obviously I’m entirely in agreement in terms of the impact in your part of the economic heartland of the country. I talked to my colleagues, Premier Ford and other business leaders. I totally subscribe to the premise of the question.
You’re right that accepting any deal with a baseline tariff that might apply across all sectors would be an admission that the free trade agreement that existed for decades that we believe is in the economic interest of all three partners — can it be discussed? Can it be reviewed? Of course, but the basic premise is that we need a deal that we think is in the long-term economic interests of the country. That starts by having a free trade agreement that is enduring and respected between the three North American partners. That will benefit your part of the great province of Ontario, but it benefits every other part of the country.
You’re right that the application gets more complicated. Even this week, we saw in softwood lumber — back to Senator Wilson’s comment — that they are going at derivatives in steel and aluminum, like kitchen armoires, kitchen cabinets and upholstered furniture, critical in Ontario and Quebec but all across the country. The derivatives are all across the country, you’re right, and expand what had been an understanding and massively increase the complexity. It would be unfortunate to have Canadian businesses trying to comply in good faith with arrangements that U.S. customs and border patrol, in some cases, are also trying to unscramble. That’s a source of concern. I know the trade department and other government agencies are trying to work with these businesses, but I share that concern. It’s something that we’ll continue to drill down on to make sure that we’re doing everything we can to avoid exactly that circumstance.
The Chair: Thank you, minister.
I have a long list for round two, but we only have three minutes left, so we’re obviously not going to get to it. However, I will use my role as chair also to ask a question.
On the discussion of softwood lumber just generally speaking, I was in the ambassador’s office in Washington on 9/11 when the planes were hitting. What were we discussing? Softwood lumber. All those years ago. It’s a perennial —
Mr. LeBlanc: You’re dating yourself, Mr. Chair.
The Chair: I know. It’s a perennial issue. Every time we seem to crack a third of market share in the United States, all the red lights come on and we get into that discussion.
But, after 9/11, we also decided we would take the policy game to the Americans on the border issues by coming up with proposals that they might like and where we could cooperate. That was very helpful. I’m not asking you to reveal negotiating strategies, but I’m assuming that that all-in approach, “Here is what we can do together,” working with provinces and states as well, is the way that you are pushing forward. Could you tell us about that?
Mr. LeBlanc: Mr. Chair, thank you.
The premise of your question is bang on. I was in my first term in the other place as a backbench MP during 9/11. I think Lawrence MacAulay was the Solicitor General at the time.
You’re right. Out of that tragedy came significant changes to the machinery of government. Therein was born the Canada Border Services Agency. It used to be the Canada Customs at Revenue Canada. A series of decisions was made working with American partners to deal with the global threat of terrorism, which sadly is still present today.
To your point, Mr. Chair, I hope those decisions from 24 years ago can assist the two governments in working through the border security and economic security questions of your colleagues. Border security and having an immigration and border transit system that has integrity and is reliable is absolutely critical, but so is the economic security, defined more broadly, of both countries. Therein lies, Mr. Chair, to your point, the opportunity for Canada to be a significant partner in the economic security of the United States and the national security of the United States.
My conversations with Secretary Lutnick have been to ask, “How can it not be in the national security interest of the United States to have a thriving and viable Canadian steel and aluminum industry?” It would be an obvious point. In those conversations, I think there is an acknowledgment that the basic premise is true.
Building out from that kind of example, there are myriad opportunities, Mr. Chair, where I hope we can convince our American friends to diminish the sectoral tariff pressures, recommit to the Canada-U.S.-Mexico Free Trade Agreement and then focus on those happy economic stories of security and collaboration that benefits Canada and the United States and in many cases our Mexican partner. That feels like a more positive path to be on.
I’ve known you a long time, Mr. Chair. I remain optimistic that a lot of our American and Mexican interlocutors share the view that that is a positive path that we can get on. We will continue to do the work to put our country in a position to hopefully get to that point. Thank you for the question.
The Chair: Thank you, minister.
I neglected to see Senator McNair’s hand up. I’m going to give you a quick question because you’re from the same province as the minister.
Mr. LeBlanc: I did my articling in the firm where Senator McNair was a big shot corporate lawyer.
Senator McNair: Minister, it is always good to see you.
There was a common thread to all the questions today, and it comes back to, is it resolvable? That’s in the minds of people in this room, your colleagues and in the Canadian people. What message do you want to leave with us today with respect to that?
Mr. LeBlanc: Senator McNair, that’s a nice way for me to end what I hope will be the beginning of a conversation I can have with you and members of your committee.
I do believe this is resolvable, but in the definition of what “resolvable” means, I’m also very much of the view of the Prime Minister that the relationship with the United States has fundamentally changed, and it will not magically go back to what it may have been a year ago or 25 years ago. It would be an error to assume that some of the challenges that we’re working our way through now won’t remain in some form for some time. What does that mean? What are the percentages? Is it this sector or that sector? That’s the work we’re trying to do to resolve. To your point, Senator McNair, a lot of this is resolvable, but it would be a mistaken assumption to assume that it will magically, automatically or inevitably go back to exactly what it was when Mr. Mulroney and Mr. Reagan were there, or when President Clinton and Prime Minister Chrétien were there. Pick your slice of time.
However, there are so many more economic and security interests that we have in common than points of difference. We can focus on those, and we can, as I said in my opening comments, use this hinge moment to work with Canadian industry, Canadian workers, provinces and territories to become less dependent and more resilient. That will become a virtuous circle as well. If Canadian businesses are seeing new markets with new partners, it makes us less dependent on one partner and makes the conversations perhaps more balanced with that partner. Therein might be a virtuous circle.
The vast majority of these issues are resolvable or can be significantly improved. Resolvable might mean going back to where we were a year ago. I don’t think that’s necessarily the case, but I think we can be in a lot better position over time than we find ourselves in today, even if today we’re in a better position than other trading partners around the world. All of that is true at the same time. Thank you, senator.
Senator Adler: I’ll avoid the preamble and go to the question. It’s clear that the President of the United States has media appearances where he gets incredibly enthusiastic when he has general numbers thrown at him by corporations or by countries about multitudes of billions of dollars to be spent in some vague way over a large time horizon. What stops Canada from offering him those talking points?
Mr. LeBlanc: Senator, nothing. And they’re more than talking points. You’re absolutely right. We see his public pronouncements in the Oval Office or in press conferences. Clearly, he and his administration are moved by massive private investments or trading partners’ offerings. Think of the deal they struck with Japan, for example. Those big numbers certainly have an impact in the imagination of the president and his administration, but therein again is a good story for Canada to tell.
The deputy or Mr. Moen will correct me if I get the numbers wrong, but we have been talking to them privately about the hundreds of billions of dollars of investment that just the Canadian pension funds alone, the Maple 8, the big large pension funds, make in the United States, including hard assets in the U.S. economy. Again, I’m not an international investment expert, but when you look at the hard assets of the American productive economy that are owned by Canadian investors, it’s a story that is much more — let me give you one example, Senator Adler.
If you just look at Canadian investment in the United States — the deputy will correct me if I get this precise technicality wrong — take the size of the Canadian economy compared to the size of the European Union economy. We have 14 times the investment in the United States as a percentage of the size of our economy than does the European Union. That includes these hard assets that are important for the productive value of the U.S. economy. There is a very good story to tell there, and I am hopeful that over the coming weeks and months that can be part of a very valid, real, significant public narrative in the United States. Canadians are generally timid in the way we approach these things. We don’t celebrate that partnership that is good for the economy of both countries. There is another example, to your point, of that shared prosperity. I hope you’ll see more examples of us telling that story for the exact reason that you described in your question.
Did I get the numbers horribly wrong?
Mr. Stewart: It’s not for me to correct you, minister.
Mr. LeBlanc: That’s the bureaucratic answer. It doesn’t mean I didn’t get it wrong. It’s the “yes minister” show. Thank you.
The Chair: Minister, you’ve overstayed a bit, and we’re grateful for that. On behalf of the committee, I want to thank you for your appearance today and your candour in responding to our questions. I hope this was a very good warm up for your appearance in the other place this afternoon. Also, you did say you see this as a conversation that will continue. This committee would welcome that, and we would love to have you back at an early juncture.
Mr. LeBlanc: Thank you, Mr. Chair, for the occasion. If that is an invitation or an offer, consider it accepted. As you organize your work plan and the stuff that you decide to do over the coming months, I would welcome an opportunity, and would make available any of my colleagues or officials, if you lean into this review of the agreement or advice you have for the government as we prepare the Canadian position, I would be happy to come back myself, or happy to meet informally, Mr. Chair, with you or colleagues. I would benefit very much from your expertise and your advice in that regard. Thank you.
The Chair: Thank you very much.
We’re fortunate to have Martin Moen, the Associate Assistant Deputy Minister, Trade Policy and Negotiations; Lynn McDonald, Director General, North America Trade Policy Bureau; and Pierre Marier, Director General, Market Access and Trade Controls Bureau. If you had some more specific questions, colleagues, these are the experts, and I know they have been working hard on the North America file for some time.
[Translation]
Senator Gerba: The significant economic impact of the tariffs imposed by our southern neighbour shines a harsh light on Canada’s deep reliance on the U.S. market.
As the minister said earlier, you see a need to diversify markets and move toward secure and reliable partners.
According to S&P Global, by 2035, emerging and developing countries are expected to contribute to nearly two thirds of economic growth.
Do you have a more global diversification plan that goes beyond North America?
I know I’m straying a little from today’s topic, but I’d like to know if the government has a diversification plan, particularly with regard to major emerging markets.
Martin Moen, Associate Assistant Deputy Minister, Trade Policy and Negotiations, Global Affairs Canada: Thank you for the question, Senator Gerba.
[English]
The answer is that the question of diversification is definitely a critical question, and there is a lot of work that is under way to come up with ways to further support diversification. Now, we have, of course, long been working on this. The minister referred to, for example, the free trade agreement with Indonesia, an emerging economy, and that’s an example of the kind of work that we’re going to continue to do. We certainly do agree with the idea that we have to pay attention to countries that are developing because these are the emerging markets and these are the new markets. Obviously, they are markets where additional effort to support Canadian businesses succeed and providing framework conditions through free trade agreements would be worthwhile. Yes, there is lots of work going on in terms of how we can do that better, and we’re working towards potentially taking steps in that direction.
Of course, at the same time, my expertise and my role is focused on the United States. As we diversify, we will be very diligent in trying to find opportunities everywhere we can, but no matter what, we’re still going to have the United States as a very large and important market. It’s just a reality of geography. That is why we are also at the same time spending so much effort on improving our access and resecuring our access to the United States. Thank you.
[Translation]
Senator Hébert: Precisely, when we talk about restoring our access to the U.S. market, we saw that Canada took certain steps to try to reestablish the relationship. In particular, the counter-tariffs and what was called the “Netflix tax” were withdrawn, but there doesn’t seem to have been any reciprocal benefit from our American neighbours.
Where do we stand on that? What is your perspective on next steps in this regard?
[English]
Mr. Moen: Thank you for the question.
What I can say — and the minister spoke to this as well — is that a process of engagement at many different levels is under way. We are working on trying to do what we can to deal with the range of challenges that Canadian businesses are facing, whether it is the 232 tariffs or other challenges, and also looking forward to the review of CUSMA and how we can ensure that that review gets us to a place that is good. That engagement is occurring at many levels and it is under way, and our hope is that some of the steps we’ve taken, whether with regard to the border or whether with regard to irritants the United States may have, will help us. But above all, our ability to move forward is going to depend on the extent to which people in the United States — people in the United States in authority — realize the degree to which trade with Canada helps the United States. It is not a competition; it’s mutual benefit. That is the key, to get that message through, and we’re working very hard to do that.
[Translation]
Senator Hébert: Thank you.
[English]
Senator MacDonald: It is good to have you witnesses here today. Thank you.
I want to get back to the tariffs and how we’ve managed this issue. The U.S. economy represents about 25% of the world’s economy, but it represents about 40% of the world’s purchasing power, so it’s a very important market for this country. There were two countries that put up tariffs, Canada and China. Mexico, notably, didn’t. But unlike China, we are in a tripartite economic relationship with the United States. It appears that, because of their approach overall, they tend to have less retaliatory tariffs than we do facing them. How can we deal with that sort of a dichotomy? How do we deal with this?
Mr. Moen: Thank you, senator, for the question.
We have to take a look at the situation, and it’s a very complicated situation. Trying to get my head around all the different tariffs that are in place, the exceptions in place, is a continual struggle, and that is one of the challenges Canadian businesses also face. But if you take a look at it, both Mexico and Canada have benefited from exceptions to the reciprocal tariffs because of the CUSMA. We are both benefiting from that and continue to benefit from that. That is a major benefit that Canadian exporters have that others do not have, including others with free-trade agreements with the United States, because of the nature of our integration.
If we take a look at the section 232 tariffs that are of such great concern, it is true that we do not have an exception from them, but neither does anyone else. There are some minor differences, but Mexico, for example, faces the same tariffs on steel and aluminum as Canada does. This is the situation we’re in. I would be careful and wouldn’t go so far as to say Mexico has a better situation, necessarily, but the complexities are mind-boggling at times, so I would stress that.
Thank you.
Senator Harder: The minister articulated very well what the objectives of the Government of Canada are in these negotiations, both the CUSMA review and the bilateral work around 232 tariffs and other related issues. I understand that this is a public meeting in which you may not be able to be as frank as I would like, but for the life of me, I can’t figure out what it is that the Americans want. Can you articulate to this committee what you’re negotiating against other than 0.1% of fentanyl coming from Canada into the United States?
Mr. Moen: Thank you for the question.
That’s definitely an important question and is one we ask of the Americans and ourselves, as well. I am going to be very careful not to ascribe views to another country that can speak for itself. I’m not going to give you a very satisfactory answer, because that’s a question better directed to the United States.
What I did can tell you, though, is that we are engaged in discussions to see if we can find out what it is that the United States wants. In that regard, we are prepared to take measures to support our shared national security, economic security and prosperity, and we’ve been very clear about that. That’s the kind of conversation we’re trying to have, and I think that is the kind of conversation that will lead to a degree of success. It is an ongoing conversation.
Senator Harder: Are you making progress on that conversation?
Mr. Moen: There is an increased level of understanding. When and how that will lead to results, we will see. I am hopeful, but it is going to require significant effort. And not just conversations at a high level, which are very important, but also, as I mentioned earlier, that message that the relationship the United States has with Canada — the trading relationship, the investment relationship — is hugely beneficial to the United States and has been for a long time. Getting that message through — repeating and repeating that message — is very important.
The Chair: There are four other senators who want to ask questions. We’re not going to get everyone in, but we can do it this way, if you agree: I will ask you all individually to put forward your questions as succinctly as you can, which will allow our panel of witnesses to respond in one gigantic burst at the end.
Senator Al Zaibak: I yield my time.
The Chair: Senator Woo, are you yielding as well?
Senator Woo: No.
And in that case, the minister didn’t like the term “fortress North America,” but there are active discussions going on, not to use that term but on the idea of a grand bargain. There are various groups talking about it. It would incorporate some kind of trade-off around essentially deeper integration with some kind of common external approach, so to speak — maybe not tariffs — against other countries, and not only China but other countries as well. Fundamentally, it means a certain level of North America decoupling from the rest of the world. Is that a position that Canada is happy with and that we would pursue?
Senator Boniface: The minister made reference to a number of trade agreements that we have in other areas and spoke about our opportunities to expand those. One of the criticisms the government has received for some time is the lack of effort on the implementation of these agreements. The efforts to sign are great, but not actual implementation. So my question really is this: How much effort is being put into the implementation of those other agreements so that we can bring the balance we need to our trading relationships around the world?
Senator Ravalia: In light of our desire to broaden trade diversification, is consideration being given to revisiting the 100% tariff on Chinese EVs and the implications of that, particularly with respect to the environment and climate change, which could be potential secondary benefits to all countries?
The Chair: Since Senator Al Zaibak yielded his time, I will allow Senator MacDonald to squeeze in the supplementary he had from before, if he wishes.
Senator MacDonald: No, go ahead.
[Translation]
Senator Gerba: In June, the government indicated that it anticipated an agreement with the United States to lift all tariffs at the end of the G7 summit. Then, the government announced that it was giving itself 100 more days to reach an agreement, which has yet to be concluded. Do you really think it is still credible to expect an agreement that would lift all tariffs, or are these tariffs here to stay? Even the United Kingdom, which is a very close ally of the United States, has only secured a 10% tariff agreement.
The Chair: You have five minutes to respond.
[English]
Mr. Moen: Thank you to the senators for the questions. There is a lot to cover, and I will do what I can. Perhaps during a future occasion, we can delve in more deeply.
Generally speaking, the situation is multifaceted, and we have to be aware that that means we may not be able to do everything all at once. We have the 232 duties, which are very important for the steel and aluminum producers and the auto sector. Those are now expanding, and we have 232 duties on logs, softwood lumber, upholstered wooden furniture, kitchen cabinets and bathroom vanities, copper, with potentially more to come.
That is one set of issues that we know is of deep concern, having spoken to Canadian industry. These are issues that we would like to resolve as quickly as we possibly can. We don’t feel, in any of these areas, that Canada poses a national security threat. We’ve been very clear about that. In fact, if anything, a successful Canadian steel industry or aluminum industry supports the security of the United States, and we’re making that point. Our desire is to move forward on these areas, if we can, in any way that we can that is reasonable and not necessarily tie it to some grander bargain. If a grander bargain emerges, of course we will take it, but that’s not the point; the point is we are working on these.
We also have the CUSMA review, which is something that was going to happen irrespective of the position of the U.S. administration and these other tariffs. It is something we want to spend some particular effort to get right. For example, because of the CUSMA exception that we have to the current set of overarching tariffs, we have seen the value of the agreement we have and the value of having that kind of an agreement that all three countries support. We need to get the CUSMA review right, and that means we need to work very carefully with Canadian stakeholders to understand the situation as it now is. That is going to require significant effort.
Then, of course, there is the broader issue of these tariffs that would apply to those goods coming from Canada that don’t meet or can’t certify, even if they may meet, the CUSMA rules of origin — the CUSMA preferential requirements. Again, that is an issue we haven’t forgotten about.
These are all issues that are important to Canadian exporters. We are not putting ourselves in a situation where we will only solve one if we solve all of them. We are open to moving forward wherever we can to help Canadians.
Going back to questions about a common external approach or fortress North America, we have to be very careful in how we talk about this. There are certain shared economic and security challenges that we have with regard to certain kinds of products and certain kinds of situations. We’ll have to be looking very carefully at whether these shared economic challenges mean we act in a similar manner. But we’re going to have to be very careful in how we do that and what that means, and we will, of course, be so.
Then, in terms of diversification questions and implementation of trade agreements, for us, we are confident that the implementation by Canada of its trade agreement obligations is proceeding as it should, but one area where we do want to do more and where we are considering how to do more is to support Canadian companies to take advantage of the opportunities provided by the trade agreements that we have and that are coming into force. That’s very important because, while some of these markets have a lot of potential, they are also markets that can be risky for Canadians — particularly smaller businesses — to take the first step into. We’re going to have to examine how we can help them move forward in taking advantage of the agreements that we have and the ones that we are negotiating.
I’ll leave it at that. Thank you.
The Chair: Thank you very much, Mr. Moen.
First of all, I want to thank our witnesses: Martin Moen, Lynn McDonald and Pierre Marier, for being with us. I suspect we’ll be seeing you again soon. The minister offered, but I know you’re always available and willing, and that’s a good thing.
I would ask members of the steering committee to stay behind, please.
There is one other part of business I wanted to mention, and that is members of the committee will recall that we agreed to adopt the Africa study order of reference. I want to speak up in the Senate on that today. We had discussed this at the last meeting, but I need the approval of this committee. I could read the whole thing out for you, but you have seen it before because the document was circulated. Do I have agreement?
Hon. Senators: Yes.
The Chair: Okay. That concludes the formal part of the meeting.
(The committee adjourned.)