THE STANDING SENATE COMMITTEE ON FOREIGN AFFAIRS AND INTERNATIONAL TRADE
EVIDENCE
OTTAWA, Thursday, October 23, 2025
The Standing Senate Committee on Foreign Affairs and International Trade met with videoconference this day at 10:30 a.m. [ET] to examine and report on such issues as may arise from time to time relating to foreign affairs and international trade generally.
Senator Peter M. Boehm (Chair) in the chair.
[Translation]
The Chair: Good morning, honourable senators. My name is Peter Boehm, and I’m the chair of the Standing Senate Committee on Foreign Affairs and International Trade.
[English]
I wish to invite committee members participating in today’s meeting to introduce themselves, as we usually do, starting on my left.
[Translation]
Senator Gerba: Amina Gerba from Quebec.
[English]
Senator Adler: Charles Adler, Manitoba.
Senator MacDonald: Michael MacDonald, Cape Breton, Nova Scotia.
Senator McNair: John McNair, New Brunswick.
Senator M. Deacon: Marty Deacon, Ontario.
Senator Wilson: Duncan Wilson, British Columbia.
Senator Coyle: Mary Coyle, Antigonish, Nova Scotia.
Senator Al Zaibak: Mohammad Al Zaibak, Ontario.
Senator Pupatello: Sandra Pupatello, Windsor, Ontario.
[Translation]
Senator Hébert: Martine Hébert from Quebec.
[English]
The Chair: I would like to point out that Senator Pupatello is joining us as an observer today, and we are delighted to have her at the committee. We may be joined by other senators as we move along.
Welcome, senators, and I wish to also welcome everyone across our country who may be watching us on ParlVU.
Colleagues, today we are meeting under our general order of reference to discuss the Canada-United States-Mexico Agreement, or CUSMA, as well as Canada’s trade relationship and overall relationship, in general, with Mexico.
You may have noticed from the first notice that we sent around that we were going to have two witnesses. Our second witness, Undersecretary Roberto Velasco Álvarez, cannot make it today. He has been called to see the president, so I expressed understanding on the part of the committee that the president would take precedence over us.
I am delighted to welcome Cameron MacKay, Ambassador of Canada to Mexico. He is joining us from Mexico City today.
Ambassador, welcome to the committee. Thank you for being with us today. It is good to see you. Before we hear your opening statement and proceed to questions and answers, I would ask everyone present to please mute notifications on their devices so we do not have any distractions, and also be very careful on how you use your earpieces. You are familiar with the routine on that — not to hold them close to the microphone. This will protect our staff and, in particular, our interpreters.
We are ready to hear your opening remarks, Ambassador MacKay, which will be followed by questions from our senators. You have the floor.
Cameron MacKay, Ambassador of Canada to Mexico, Global Affairs Canada: Mr. Chair, thank you very much for having me.
[Translation]
Honourable senators, it is an honour to speak to you today.
[English]
In my view, your interest in Canada’s relationship with Mexico is, of course, very timely.
Throughout President Trump’s presidency and beyond, Canada’s relationship with Mexico will take on a unique strategic importance. Of all the countries working to adapt to the accelerating changes being driven out of Washington, only Mexico shares Canada’s economic dependence on access to the U.S. market, along with the front-line pressures of sharing an enormous land border with our superpower neighbour.
[Translation]
2026 will be a particularly important year. Canada and Mexico will together face the challenges of the upcoming review of CUSMA and, of course, we will co-host the largest and most complex sporting event in history — the FIFA World Cup being organized for the first time across three countries, 16 cities, with 48 teams and 104 games.
[English]
Now more than ever, it is in Canada’s interest to have a resilient relationship of what I call strategic trust and collaboration with Mexico.
[Translation]
It is in that context that, during his visit in late September, Prime Minister Carney and President Sheinbaum elevated the Canada–Mexico relationship to a Comprehensive Strategic Partnership.
[English]
As part of that Comprehensive Strategic Partnership, the leaders committed that they, their ministers and their secretaries would engage in “frequent meetings and communication” as we move forward. They approved a new three-year Canada-Mexico Action Plan with intensified engagement under four pillars: prosperity; security; mobility, inclusion and well-being; and environment and sustainability.
Prime Minister Carney and President Sheinbaum were clear about their high expectations for assiduous bilateral engagement, with officials to report to leaders on progress every quarter. Our first report to leaders is due on December 18.
I anticipate a surge in bilateral engagement in the coming months and years. Senior officials from both countries will meet more frequently to advance shared priorities, including collaboration on ports, trade and energy infrastructure, biomanufacturing, anti-crime capacity building, disaster resilience and health collaboration, just to name a few areas. These engagements will build the trust and momentum we need to realize the full potential of our Comprehensive Strategic Partnership.
[Translation]
We are not waiting to move ahead. Since the Prime Minister’s visit, ministers and officials have already been busy on multiple fronts.
[English]
Just last week, as part of the prosperity pillar of our action plan, Agriculture and Agri-Food Minister MacDonald visited Mexico to meet key counterparts, advance agricultural cooperation and promote Canadian agri-food exports.
Also last week, under the security pillar of the Canada-Mexico Action Plan, we hosted the visit of HMCS Ville de Québec, a Halifax-class frigate deployed under Operation HORIZON. The ship’s presence in Mexico serves as a powerful symbol of Canada’s commitment to regional peace and stability and provided a strategic platform for bilateral defence diplomacy and cultural exchange.
Earlier this week, we launched recruitment for a major Canada trade mission to Mexico to be led by Minister LeBlanc in February, focused on the sectors of greatest promise for enhanced bilateral trade: clean technology and clean energy; agri-food; advanced manufacturing; information and communications technology, or ICT; and creative industries. This mission will help to jump-start export and partnership opportunities for approximately 100 Canadian companies.
[Translation]
The timing of the minister’s trade mission is opportune. Canadian companies have arguably never been more motivated to diversify their international business activities and Mexico is clearly one of the markets they should be looking at.
[English]
After more than 31 years of free trade, Mexico is, after all, our second-oldest free trade partner. Canada’s commercial relationship with Mexico is good. Mexico is Canada’s third‑largest goods trading partner after the United States and China, and our bilateral commercial relationship now totals well over $100 billion, including bilateral trade in goods valued at over $56 billion, two-way investment of $46 billion plus billions more generated through tourism, education and other services.
I would like to put that in perspective. Canada is currently the ninth-largest economy in the world with a nominal GDP of nearly US$2.4 trillion. Mexico is the thirteenth largest economy in the world, at nearly US$1.9 trillion in nominal GDP. Frankly, given the size of our respective economies, our bilateral commercial relationship of over C$100 billion is clearly not reaching its full potential. After decades of free trade, we should be doing even more business together, and there is a lot of room for improvement.
To do so, we must ensure that our trade framework remains fit for purpose. The upcoming CUSMA review presents a critical opportunity to maintain and potentially reframe our free trade partnership with Mexico.
Canada is approaching this process with a clear-eyed, collaborative mindset grounded in our shared interest in a stable, rules-based trading environment.
[Translation]
To return to my earlier point, we recognize that a close, strategic relationship with Mexico is essential in this context — not just for navigating the review, but for addressing the broader transformational challenges and opportunities we both face.
[English]
Whether it’s supply chain resilience, energy and infrastructure investments or inclusive growth, Canada and Mexico are better positioned to succeed when we work together.
[Translation]
In that light, honourable senators, I look forward to your questions, comments and advice. Thank you.
The Chair: Thank you very much, ambassador.
Esteemed colleagues, I would like to remind you that you have a maximum of three minutes each for the first round, including questions and answers.
[English]
Therefore, as always, please be as concise as you can, without long preambles to your questions. That will give the ambassador more time to respond to us.
Senator MacDonald: Thank you to the ambassador for being here today. Mr. Ambassador, in the fall, in September, the Prime Minister and the President met and committed to close coordination in advance preparation for the upcoming review of the agreement. In what ways do you expect Canada’s and Mexico’s negotiating positions during the joint review to align, and which ways may they differ?
Mr. MacKay: I think one key area where we will absolutely align is that Canada and Mexico would like to keep the review as narrow and as targeted as possible. Frankly, we are both quite happy with the functioning of the agreement, which is less than six years old now. We are both quite committed to the trilateral aspect of the agreement. I know there has been some talk of bilateral negotiations, and I’m happy to speak about that further, but I think we will be very aligned in that regard. We’d both like to keep trade as open and duty-free as possible across North America.
Senator MacDonald: Where do you see the greatest room for growth in terms of Canada and Mexico’s bilateral trade?
Mr. MacKay: I think the areas that were set out as priority sectors for Minister LeBlanc’s upcoming February trade mission to Mexico really point to the answer to that: agriculture and agri‑food for sure, advanced manufacturing, ICT opportunities. I also see opportunities in clean technology and clean energy. I think mining is also one; that’s more of a Canadian direct investment abroad as opposed to exports. His trade mission will also cover creative industries.
Senator MacDonald: In the last negotiation, Canada, the U.S. and Mexico, it appeared, negotiated the body of the agreement. Canada came in late to the negotiation. Do you see us finding ourselves in the same position this time, or do you think it will be more of a trilateral negotiation, as it had been in previous years?
Mr. MacKay: I think if you go all the way back to the original NAFTA negotiation, much of the negotiation was trilateral. There were also bilateral negotiations. Tariff negotiations tend to be more bilateral. But at the end of the day, we bring everything together into a trilateral agreement. That’s what we saw as well when we negotiated the NAFTA into the CUSMA. There were absolutely bilateral discussions between the U.S. and Mexico separate from Canada, likewise between Canada and the U.S. and between Canada and Mexico. Then at the end of the day, we bring it together trilaterally. I foresee a similar approach this time around.
Senator MacDonald: Thank you.
Senator Coyle: Thank you, ambassador. I’m curious about how we marry Canada’s domestic strategies with our international strategies. You mentioned one of the priority sectors being clean tech and clean energy. We are all waiting to see what Prime Minister Carney’s climate competitiveness strategy is going to look like. There were some hints — actually, they are no longer hints. Apparently, we are going to learn more about that in the budget. We thought we were going to learn more about it before that. I’m curious what you see as the opportunities there between Canada and Mexico in that sector that you have raised a couple of times.
Mr. MacKay: On clean energy, in particular, the Mexican government has its own climate change ambitions and goals. In particular, for example, it wants, I believe, 45% of its electricity to be clean by 2030, which is a very ambitious goal. But I think it is achievable with the right level of forward investment in clean energy in Mexico and the right regulatory regime here. So there is one opportunity, not only for Canadian foreign investment but for all of the suppliers on the goods side and the services side to help to build the clean energy grid in Mexico. So there is one concrete example.
Senator Coyle: Could you tell us a little bit about Mexico’s relationship with China on clean energy, where that stands at the moment?
Mr. MacKay: I don’t have specifics on the clean energy relationship. I can say that, across the board, Mexico has an open relationship with China; it trades with China, has some Chinese investment here — much less than Canada and the United States do. The China relationship is, I would say, less important to Mexico than it is to Canada or the United States. They simply have fewer exports. It tends to be more of an import relationship. That has caused a lot of sensitivity in Mexico in recent years and, frankly, Mexico has therefore raised certain tariffs against products from parties with whom it does not have a free trade agreement — and that includes China — and it is proposing to raise additional tariffs, for example, on electric vehicles, or EVs. There is an overview of the relationship. As for clean energy per se, I’m not aware of major Chinese investment into the clean energy grid here. I don’t think it is significant, to my knowledge.
Senator Coyle: Thank you.
Senator Woo: Thank you, ambassador. There are discussions in this country about approaching our relationship with the U.S. and Mexico through some sort of a “grand bargain” — serious discussions, as far as I can tell. The grand bargain idea is one which would try to tie trade issues with border security issues and defence issues. This would align somewhat with the Americans’ own stated strategy in their National Security Strategy report released recently, focusing on hemispheric integrity and security.
Are there similar discussions in Mexico that are advocating for this kind of grand bargain?
Mr. MacKay: I haven’t heard the term “grand bargain” used with respect to Mexico-U.S. relations. But it is absolutely the case that Mexico, like Canada, has a constant, ongoing deep relationship with the United States — not just on trade but also on security issues. I think everyone has heard what President Trump, for example, has said about his concerns with respect to fentanyl and migrants from Mexico. Mexico has a very deep and complex relationship with the United States with respect to managing their border. Those discussions are ongoing all the time.
I do not foresee an easy way to bring these into the CUSMA review, which is coming up next year. But just like Canada, the Mexicans are in a constant dialogue with the U.S. about trade, about security and, to a lesser extent, on defence issues.
Senator Woo: If not security and defence more broadly, would the Mexicans be amenable to some sort of a common external tariff that would be part of the grand bargain in order to placate American concerns about import penetration? Of course, they have already done that, and we have done that too with Chinese EVs and other Chinese products. Is there a conversation in Mexico about a common external tariff?
Mr. MacKay: I have heard no government official refer to that. I think in the past, think tanks have written papers and whatnot. All the way back to the very original NAFTA there has been some public dialogue about a common external tariff. But I have heard no government official speak about it recently.
More common in the public debate here is the notion of greater alignment with the United States and Canada vis-à-vis parties outside of the free trade zone. The rules of origin of the CUSMA are specifically designed to ensure the benefits of the agreement accrue only to the members of the agreement. It is the case that, currently, Canada and the United States are largely aligned vis-à-vis China — not entirely, of course — and Mexico a little bit less so.
To give you one salient example, Canada and the U.S. each have 100% tariffs on electric vehicles, including from China. Mexico has no such tariff at the moment. It is proposing a new tariff. There is a bill going through the Mexican legislature now for a 50% tariff on electric vehicles. So there is an example of Mexico moving toward greater alignment, but I have heard no proposal for a common external tariff.
Senator Woo: Thank you.
The Chair: Thank you. We went a little over on that segment. We can come back to that; it is an interesting topic.
Senator Wilson: My question is in the context of, obviously, the CUSMA agreement as a large priority for both countries in terms of access to the U.S. market. How far can we go with Mexico in the context of that discussion that we are having, the three-way discussion we are having on the other side? What are the limitations? Are there sensitivities? I would be interested in your thoughts.
Mr. MacKay: Do you mean in terms of how we could work with Mexico on the CUSMA review?
Senator Wilson: No. I mean how far we can go in terms of our bilateral agreements with Mexico in the context of still moving forward, trying to get some resolution on the CUSMA side.
Mr. MacKay: In bilateral agreements, do you mean outside — Canada and Mexico have two free trade agreements, or FTAs, in force between us now. One is the trilateral CUSMA, and the other is the plurilateral Comprehensive and Progressive Agreement for Trans-Pacific Partnership, or CPTPP. We are both members of both. We have a range of bilateral agreements and memoranda of understanding, or MOUs, largely in other areas. We have increasing bilateral dialogue, I would say. For example, the agriculture minister was here just last week to talk to his counterparts here about how to deepen bilateral trade and investment. But in terms of big treaties, it is really just the CUSMA and the CPTPP that apply to trade.
Senator Wilson: With CUSMA and CPTPP, are there areas that are not adequately covered by, say, CPTPP that we should be paying attention to?
Mr. MacKay: Well, the beauty of both agreements is that both FTAs are very ambitious and very comprehensive. They cover trade in goods, services, intellectual property — all sectors from fintech to agricultural products. Everything is there. I have not had a Canadian business come to me and say, “There is something missing in the trade agreement. We need a new chapter on this or that.”
You have heard from other witnesses, and we’ll hear from more, that Canada’s position is that what’s coming up next year is a review; we are not seeking a renegotiation. The Americans have a different position on that. If we end up renegotiating, are there areas that could be improved? Perhaps that’s the case.
Senator Wilson: Thank you.
[Translation]
Senator Gerba: Thank you, Ambassador MacKay, for being with us today. The Canada-Mexico Action Plan 2025-2028 that you mentioned highlights the shared goal of increasing trade and supporting SMEs. However, Canada’s 2025 State of Trade report found that many of our businesses still face significant barriers to foreign market access, including the Mexican market, despite CUSMA. Are you having discussions with Mexican authorities to reduce the regulatory and logistical barriers faced by Canadian SMEs wishing to set up shop in Mexico?
Mr. MacKay: Thank you very much for the question.
[English]
I would say that on the whole, when I speak to small- and medium-sized enterprises in Canada or those who have come here to do business, I don’t hear much about formal barriers to trade by Mexico. After 31 years of free trade between us under the NAFTA and then the USMCA, there are very few formal barriers left. They have largely been addressed.
What I do hear from small- and medium-sized enterprises in Canada are problems of access to capital in Canada and knowledge of the market abroad — how to do business outside of Canada or the United States. Most Canadian exporters start by exporting to the United States; it is a familiar market, a similar legal system, often the same language. Coming to Mexico is, for many exporters, their first time moving into a non-English language environment where the legal system is more unfamiliar.
That’s where we have such a strong role to play for Export Development Canada; for the Business Development Bank of Canada, or BDC; for the Canadian Trade Commissioner Service and others who help to advise small Canadian businesses when they move to a new market. One of the priorities here in the Canadian embassy in Mexico, where we have a considerable trade team with offices in three locations across Mexico, is to provide the introductions and business advice and business acumen that new Canadian exporters to this market would need.
I’ll just add that where we do see regulatory barriers that are in any way non-compliant with Mexico’s trade obligations, then the Canadian government raises those quickly with the Government of Mexico. We expect Mexico to live up to its trade obligations in the treaty. But in my 10 months here, none of those issues has arisen.
The Chair: Thank you. I would like to acknowledge that Senator Boniface of Ontario has joined the meeting.
[Translation]
Senator Hébert: Ambassador, thank you for your explanation. When you talk about diversifying our exports to Mexico, stepping up our efforts in agriculture, advanced manufacturing, clean energy and all of that, I think that’s noble and commendable. However, one reality remains.
[English]
This reality is the fact that most of the trade between Mexico and Canada is tied to the automobile sector. We know that with what is happening with our neighbours to the south, this sector is jeopardized and is in difficulty right now.
How do you see the situation going on? Even if we put all of these efforts into these sectors that you talked about, I’m not sure it will compensate for what is happening in the auto sector, which is the largest part of our trade with Mexico.
Mr. MacKay: Excellent question. Frankly, there is no straightforward or easy answer. Auto trade between Canada, Mexico and the United States is very intense. As you said, the majority of Canada’s imports from Mexico are autos or auto parts — intermediate goods that we then use to put into the autos we are assembling in Canada and then re-exporting to the United States and Mexico. Not just autos but many auto parts cross the border multiple times as each country is adding value to them. Autos is that sector where, arguably more than anywhere else, we don’t just trade with each other; we are making things together. We make cars together.
Earlier this week, I visited the Bombardier facility here in Mexico, and aircraft is another example where we are actually making these aircraft with all three countries contributing.
So how we are going to deal with this in the CUSMA review next year, I think, is the $64-billion question. President Trump and his administration have been clear about what they see is the future of auto production in North America. I think some of that ambition is unrealistic. It’s simply not possible for the United States to make cars all by itself in the near term. We’re well aware in Canada that 10% of the auto parts that United States companies need to make autos in the United States come from Canada, and 43% come from Mexico. It’s an even bigger auto sector here.
This, frankly, is one of the sectors where I could see considerable alignment between the Canadian and Mexican negotiating positions as we review the CUSMA over the coming months.
Senator M. Deacon: Thank you, ambassador, for being with us this morning. It’s greatly appreciated.
My colleague just asked the diversification question I was thinking about, but I’m going to take it in a slightly different direction. That was a reflection on the auto sector and some of our common work together.
In Canada, we’ve had to take a long, hard, deep look at our domestic work and the obstacles of trade from province to province to territory within Canada, and we’ve lagged on that. This last 12 months has told us that we’ve got to pull up our socks and do some better work in our domestic opportunities to move goods throughout the country in a much more strategic way.
I’m thinking about Mexico, and the question I have for you today is this: Have you also in the last year or two had to take a look within Mexico and what you need to refine or refire on? Perhaps you can share a little bit about that with us.
Mr. MacKay: I would say with respect to internal trade, Mexico is a federation like Canada, but it’s a different kind of federation. The states have jurisdiction over fewer areas than provinces do in Canada, so the kind of internal barriers to trade we’ve been struggling with in Canada aren’t such a significant factor in Mexico.
The Mexican government plan that was announced just 10 days before President Trump took office, Plan México, has an elaborate industrial strategy to try to build up certain geographic areas — what the Mexicans call “poles of development” — for example, pharmaceutical specialization here, auto production in this or that state, depending on the geography, climate and access to logistics, et cetera. There are also sectoral priorities for Plan México. Autos, pharma, medical devices, semiconductors — these are areas where the Mexicans are looking to increase their production and export capabilities. The overall goal is to make Mexico a top-10 economy in the world. I mentioned earlier they’re about thirteenth largest now; they’d like to be tenth or larger in the coming years. Their focus internally has been really much more on that.
When the Prime Minister was here about a month ago, he had great detailed conversations with President Sheinbaum about the complementarity between Plan México and the Canada Strong approach the Canadian government is taking to developing the Canadian economy domestically and also building our ability to export.
Senator Adler: Ambassador, thanks very much for taking my question. It has to do with the speech that was delivered last night — I don’t know whether you saw it or read it — from our Prime Minister, and I want to focus on one nugget and see whether it’s worth chewing on. The Prime Minister said last night that exports from Canada to non-U.S. countries would double. That was his strategy, the government strategy for the next 10 years: a doubling of Canadian exports to non-American countries. From your perch in Mexico, could you give us a sense of where the expansion could take place in trade between Canada and Mexico in terms of which Canadian exports we could anticipate gaining a larger market in Mexico?
Mr. MacKay: Thank you. I did see the headlines this morning about that commitment by the Prime Minister, which, of course, seems entirely achievable to me. I speak to a lot of Canadian businesses here, and everyone is talking about diversification beyond the United States. No one is talking about wanting to export less to the United States. This is a matter of adding to as opposed to subtracting from, and Mexico is one of those markets abroad where, as I noted in my opening remarks, there’s real opportunity to grow Canadian trade.
We’ve had 31 years of free trade. It’s relatively barrier-free; there are no duties to export to Mexico. The regulatory environment is stable and welcoming for most Canadian exports. It’s a large country, the thirteenth-largest economy in the world, with 130 million people, a young population. The median age of Mexicans now is 30, as opposed to 38 in the U.S. and, I think, 40 or 42 in Canada, so it’s a young population. The economy is growing.
It struggled, of course, through the tariffs over the last few months, but it’s still growing, and to put it into perspective — I just heard this yesterday — Mexico now graduates annually more STEM graduates than Japan does. Mexico is absolutely a country and an economy on the move, and I would come back, therefore, to the sectors I mentioned earlier, which we selected with Minister LeBlanc for sectors of focus for his upcoming trade mission. Advanced manufacturing, and that’s everything from autos and aircraft to electronic components, et cetera — there are opportunities for Canadian companies there.
In agriculture and agri-food, we do good business in Mexico now, but we could be doing more, especially more in the value‑added areas. In terms of ICT, including everything to do with technology, Canadian companies, as you know, can be world leaders at everything from agricultural technology to fintech, so with the state of the Mexican economy now, we think there’s opportunity there as well. I would also come back to the clean technology, clean energy, which I spoke about earlier.
Senator Adler: Thank you very much.
Senator Pupatello: Good morning. I’m curious about the Mexican trade agreements with their rest of the world — which is even greater than Canada’s agreements with the rest of the world — the southern countries, in particular. Are there opportunities to use Mexico as the launch pad for Canadian companies to get into those MERCOSUR-related countries? I was always impressed with how well Mexico did that way. They have all the northern countries and they have the southern countries, and we don’t. Where are those opportunities with South American countries that we’re not taking advantage of, given the Prime Minister’s focus on getting moving on that?
Mr. MacKay: You’re absolutely right; Mexico has done an admirable job negotiating free trade agreements all around the world. To my knowledge — and I’m the Canadian ambassador — we have more trade agreements and our trade agreements are better, more ambitious, more comprehensive. That said, it’s a friendly competition between Canada and Mexico as to who can be more open to trade and who can have deals with more partners.
If the Mexican ambassador were here, he would probably pitch that Canadian companies should relocate to Mexico and then have access to all of these other markets. I would make exactly the opposite pitch: That’s why you should be doing business in Canada. The truth is that most of the Canadian businesses who are manufacturing here, for example, and then exporting are exporting back to the United States and to Canada, and that’s particularly intense on autos and aircraft, as we mentioned earlier, but it covers other sectors as well.
One area where we really see opportunity to do just what you were describing is helping to introduce Canadian businesses to major Mexican companies that also have extensive ties through Latin America and the Spanish-speaking world. I’ll give you a hypothetical example with fintech. If we could find a Canadian fintech company that can partner with a Mexican bank that also has presence elsewhere in Latin America, et cetera, then you have a bigger partnership than just this market of 130 million people, so the Trade Commissioner Service here is very focused on making just those kinds of introductions and having Canadian businesses who come to do business in Mexico think that way: that this is the first step not just to Mexico but to all of these markets beyond. It is absolutely along the lines of your thinking.
The Chair: This is usually where, as chair, I get to ask a question, too, and I’ve been wanting to ask about two items, really.
I’ve been dealing a lot with Mexico as a senator and certainly in my previous life, and I have visited many times and engaged with Mexican decision makers. As you know, ambassador, I was in Mexico City two weeks ago. One of my big take-aways was the overt enthusiasm amongst legislators, both in the Senate and in the Congress, for having greater contact with us on a variety of subjects, and they really want to build. This is something I’ve not seen before, so this, I think, reflects a turn in the relationship. I wouldn’t mind having a comment from you on that.
My other question is this: In my conversations with Mexican senators and congresspeople, they emphasized the great success of the Seasonal Agricultural Worker Program, which, of course, has been in place for a large number of years, but they see this as a very important facet in our bilateral relationship. I’m wondering if you could give a comment on that as well.
Mr. MacKay: Absolutely. On parliamentary engagement and engagement between legislatures and the Senate, I hear a lot of that as well from the Mexican senators and diputados, that is, members of Congress. I hear they are keen to engage with Canada. I think Mexico absolutely realizes the strategic opportunity to build closer relations with Canada, especially now, because of what is happening in Washington.
I would say that more than ever, Canadians and Mexicans are looking at each other and saying, “I think we could do more; I think we need one another; I think we need to collaborate; we should know one another better.” For too many years, our relationship has really been intermediated by the United States. We’ve each been so focused on our relationship with the United States that we, arguably, have not done enough bilaterally together. I think that it’s changing, and it’s changing quickly, aided greatly by Prime Minister Carney’s visit in September and his and the president’s elevating of this relationship to a Comprehensive Strategic Partnership. Legislators here are absolutely paying attention to that and wanting to know who their Canadian counterparts are and to meet them.
The Seasonal Agricultural Worker Program is more than 50 years old and is seen as very successful by both governments. On the Canadian side, although there’s a lot of debate about migration and numbers in Canada, I’ve never heard a complaint about the Seasonal Agricultural Worker Program.
About 26,000 Mexicans per year come to help with the Canadian harvest all across the country. They stay for a maximum of nine months, and then they return. The incomes they earn in Canada can help them to support families here in Mexico and raise those standards of living. The Mexican government sees this as a terrific example of managed, controlled temporary migration abroad, and I think, likewise, the Canadian government sees this program as a great success. It was highlighted in the Canada-Mexico Action Plan that the leaders approved.
The Chair: Thank you very much.
Senator Coyle: This has been a very important discussion. I’m curious; you mentioned the trade mission, I believe, including creative industries. I’d like to know a little bit more about that.
I would also like to know about research and education, particularly the higher education sector, and what kind of partnerships are in place and whether there is any move to improve upon that.
Mr. MacKay: On creative industries, it’s a smaller sector for us, but, frankly, we do see some opportunity, and there is also an opportunity there for some cultural diplomacy. It’s a significant business for Canadian creative exporters of everything from film and television to music and live performances. This is another area where we’d like to see not just Canadian governments but Canadians in the creative sectors interacting more and exploring more with their Mexican counterparts what more we can do.
I know that on the Mexican side they are enthusiastic as well. They have such an enormous market in the United States, where 11% of Americans trace their roots to Mexico. I think the Mexican sector is also keen to look at how they can grow in Canada.
To your second point about education collaboration, we have more than 300 MOUs between various government entities, academic institutions and research institutions in Canada and Mexico. Too many of them, I think, are underutilized, but we should be doing more on education.
We have about 20,000 young Mexicans being educated in Canada at any given time. I think about 8,000 or 9,000 students are doing higher education in college and university. Mexico is the largest supplier of students to Canada from Latin America, and then others are coming to Canada to learn language skills, English language skills in particular.
On the science and tech research and development collaboration side, one of the things that the leaders agreed to during the Prime Minister’s visit was to finalize, by the end of the year, memoranda of understanding between the Natural Sciences and Engineering Research Council of Canada and the Social Sciences and Humanities Research Council and their Mexican counterparts to help deepen science and tech and research collaboration.
I think there are some leading research institutions in Mexico, and it might surprise many Canadians to know just how much is going on here in STEM, in artificial intelligence and in social sciences issues to do with Indigenous Peoples, for example, and cultural promotion. There is more we can do in that space, and our leaders are absolutely directing us to do more. And let me add briefly that we would bring along the provinces and territories.
Senator Coyle: Thank you.
Senator Wilson: We’ve all become quite accustomed to not expecting the status quo anymore when it comes to our largest trading partner, and a significant amount of the trade between Canada and Mexico in goods moves through the United States by truck and by rail. In my prior experience working in the port sector, I encountered on several occasions in my 20-plus years, the U.S. legislators trying to put levies on containers, for example, coming in through Canadian ports and going into the United States.
I’m interested to hear your perspective. Potentially, the CUSMA discussions could continue to be frustrated. How confident are we in terms of unfettered transit access through the United States, and are you considering the potential for greater seaborne trade between Mexico and Canada, much as we see with other South American countries?
Mr. MacKay: A great question. I might just add that at least some economists estimate that the Canada-Mexico bilateral trade figures that I provided earlier are undercounted by 15% to 25% because they transit through the United States, and they, for one reason or another, therefore, appear as U.S. exports to Mexico or to Canada, when, in fact, the country of origin is one of us.
Most of our trade now is moving by truck. A lot of it is moving by rail. Major commodities, such as canola, for example, tend to move by sea from Vancouver to Manzanillo, so depending on the product and depending on the logistics needed to move that product. I’ll also add air. It’s not just people, but there is certain cargo that moves by air.
I think there is an opportunity to do more, and it’s for that reason that, again, one of the areas the leaders in the action plan directed officials to work on is maritime connectivity between Canada and Mexico. Canada, as you know, is wanting to develop, modernize, improve and expand our port capacity for exports. The Mexicans have the same plan, so we will be establishing, under the action plan, a maritime connectivity working group to look at how we could improve trade‑facilitating infrastructure in each country to allow us to trade more directly with one another by sea.
That group won’t be limited just to maritime, although that’s the name of the group. It will also look at rail, road and, I believe, air, at how we can ensure we’ve got the most free and open opportunities on the logistics side to move goods between the two countries.
I haven’t heard any recent proposals from the U.S. to in any way put restrictions on inbound movement of goods from Canada to Mexico or vice versa, and I hope that it doesn’t become the case.
[Translation]
Senator Gerba: To add to my previous question, Export Development Canada, or EDC, states on its site that a number of Canadian businesses have compliance issues, particularly with regard to the rules of origin that are imposed to benefit from CUSMA. Faced with these barriers, some SMEs prefer to pay customs charges to avoid compliance or bypass these obstacles. This is often brought up by EDC.
However, I agree that our trade commissioners and businesses do need even more guidance. CUSMA is a good agreement, but it’s not easy for SMEs.
[English]
Mr. MacKay: I think that’s an excellent point. Global Affairs Canada and the Trade Commissioner Service recognize that for large companies and larger exporters who can afford to have legal counsel and customs brokers at their beck and call, it’s much easier to abide by the paperwork required to meet the rules-of-origin requirements for duty-free entry. Especially now, to the United States, it has become more complicated than ever.
It’s for that reason that Global Affairs Canada has had a program since the spring to help guide Canadian businesses on how to meet those rules-of-origin requirements and file the paperwork, especially to export to the United States.
I have not personally heard of that being a problem for Canadian exporters to Mexico, but if it is, I would encourage the businesses — or yourself if you have specifics — to bring that to the attention of the embassy, the Trade Commissioner Service, Global Affairs Canada, and we’re happy to work with companies that are struggling with this. It’s a priority for us.
Senator Gerba: Thank you.
Senator M. Deacon: You mentioned in the opening a little bit about FIFA and the upcoming 2026 multi-country-hosted event. Senator MacDonald and I were together at meetings in Seattle in July with our mostly Canada-U.S. trade partners, companies, politicians, and a few from Mexico. We went through a simulation, and we know it’s a sporting event, but it’s also a tremendous opportunity for legacy and testing and really, in this day and age, what it means to move people in and out of countries.
We spent two and a half hours on a simulation. They called it “bed-to-bed,” but I’m going to call it “chair-to-bed.” It’s where you can be in one of 206 member countries, and you can book your tickets, use your documents in your home, and you will never have a piece of paper in your hand or a passport. It’s a really sophisticated plan, particularly between Canada and the U.S., but the conversation was also how this works for Mexico to the U.S. and Mexico to Canada.
In theory, it was very impressive, very informative and almost frightening, in a sense, because you could lie in your bed and get to the country you want to get to, to the event, to the stadium, to your seat, to your hotel, to your bed. And that’s what they’re looking at.
I wonder if you have anything you’d like to share from Mexico’s perspective on this so we don’t have the lead stories be people who were denied access getting in and out of countries.
Mr. MacKay: A great question. We’re all very excited to be hosting FIFA next year; it will be enormous. As I see it, it will be like Vancouver and Toronto each hosting the Olympics at the same time. It’s going to be a very big deal.
The Mexicans are skilled at this. It’s our first time hosting FIFA. This will be number 3 for Mexico, and they’re absolutely looking at leveraging this for tourism, to help to brand Mexico globally, et cetera. So there’s lots of good news on that, and I’ll share with you that I’ve written letters to the mayors of Toronto and Vancouver and to Adam van Koeverden, our new FIFA Sherpa, offering to facilitate outreach to their Mexican counterparts.
There will be challenges at the same time. There will be challenges on visas for Canada. Entry to Canada is pretty seamless for individuals who have passports where a visa is not required, which are visa-exempt. But many Mexican fans will need a visa to enter Canada, and there are many countries all around the world for which Canada requires a visa before you enter.
So I know Immigration, Refugees and Citizenship Canada are all over that with big plans on how to manage this very significant movement of people and the provision of visas where it’s not going to be entirely digital. You have to have a passport, and you have to have a visa stamp in your passport; that’s how we do it.
The Americans face the same issue, so there’s already trilateral dialogue about how to make this as seamless as possible.
[Translation]
Senator Hébert: I want to go back to the auto sector and the relationship with China, ambassador. Some experts have suggested that Canada might benefit from reviewing some of its current positions on China, particularly when it comes to electric vehicles. You mentioned that Mexico was more open or had tariffs of only 50% compared to China, as well as important decarbonization targets.
What is your opinion on an introduction — perhaps not a complete opening of the market — but at least a greater openness towards China on electric vehicles with certain conditions such as quotas? How do you see that?
[English]
Mr. MacKay: That’s a very topical question. I’m not in a position to provide advice or opinion about domestic policy in Canada, but I can describe the situation in Mexico. Mexico has had, I believe, tariff-free or at least very low-tariff imports of Chinese electric vehicles for the last several years.
In terms of new cars sold in Mexico now, about 20% of new cars sold in Mexico annually now are of Chinese origin, and most of them are electric, and most of them come from General Motors plants in China.
But frankly, that has created some discomfort in the auto industry in Mexico and in the United States and in Canada. And it’s for that reason that Mexico is looking at changing that policy and going from, again, a zero or a very low tariff currently to a proposal in Congress in Mexico now to raise that to a 50% tariff, so lower than Canada and the U.S. but much higher than currently.
That tariff is not in place yet, but the government has a majority in the legislature here, and I have no reason to believe there will not be a 50% tariff pretty soon. So the Mexicans are going absolutely in that direction, very much facing toward North America and with their back to auto production outside of the continent.
The Chair: We’ve come to the end of our time, so on behalf of the committee, Ambassador MacKay, I’d like to thank you for putting up with our questions and giving us very good responses. As negotiations, revisions, reviews — whatever word you want to use — continue with respect to the CUSMA, or T-MEC, as it’s called in Mexico, we will solicit your views. We hope to have you back as a witness. On behalf of the committee, thank you very much.
Mr. MacKay: Senators, thank you.
The Chair: Colleagues, I would ask the members of the steering committee to stay behind, please.
(The committee adjourned.)