THE STANDING SENATE COMMITTEE ON FOREIGN AFFAIRS AND INTERNATIONAL TRADE
EVIDENCE
OTTAWA, Thursday, November 6, 2025
The Standing Senate Committee on Foreign Affairs and International Trade met with videoconference this day at 10:31 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.
[Translation]
The Chair: Good morning, 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. I would now invite committee members to introduce themselves.
[English]
Senator Adler: Charles Adler, Manitoba.
Senator MacDonald: Michael MacDonald, Cape Breton, Nova Scotia.
Senator Robinson: Good morning. Mary Robinson, representing Prince Edward Island.
Senator Ravalia: Good morning. Welcome. Mohamed Ravalia, Newfoundland and Labrador.
Senator Ataullahjan: Good morning and welcome. Salma Ataullahjan, Ontario.
[Translation]
Senator Woo: Yuen Pau Woo from British Columbia.
[English]
Senator Harder: Peter Harder, Ontario.
Senator Wilson: Duncan Wilson, British Columbia.
Senator Pupatello: Sandra Pupatello, Ontario.
Senator Al Zaibak: Mohammad Al Zaibak, Ontario.
[Translation]
Senator Hébert: Martine Hébert from Quebec.
[English]
The Chair: I’d like to note Senator Robinson and Senator Pupatello are joining us today as observers. You are welcome, and you’re welcome to ask questions, as well, of our witnesses.
Welcome, everyone. To those watching us across the country on Senate ParlVU, welcome to you as well.
We are meeting today under our general order of reference to continue discussing CUSMA, the Canada-United States-Mexico Agreement, and Canada’s trade relationships with the United States and Mexico.
Today, for our first panel, we are pleased to welcome, from the Canadian Chamber of Commerce, Catherine Fortin Lefaivre, Senior Vice President, International Policy & Global Partnerships; as well as Gaphel Kongtsa, Director, International Policy. And from the Canadian Manufacturers & Exporters, we welcome Ryan Greer, Senior Vice President, Public Affairs and National Policy. Thank you for joining us today.
Before we hear your opening statements and proceed to questions and answers, I ask everyone in the room to kindly mute notifications on your devices and also observe the card about best practices regarding earphones and microphones so as to avoid audio feedback which could be injurious to our interpreters and others who are working to support us on the technical side.
We are ready to hear your opening remarks, to be followed, as usual, by questions from senators.
Catherine Fortin Lefaivre, Senior Vice President, International Policy & Global Partnerships, Canadian Chamber of Commerce: Good morning. It is with great pleasure that the Canadian Chamber of Commerce provides its remarks on the CUSMA review to this committee. I’m here with my colleague Gaphel Kongtsa, who has led our CUSMA consultation work over the past year.
The insights we are sharing today were submitted to Global Affairs Canada, or GAC, as well as to the Office of the United States Trade Representative, or USTR. We will also be submitting them to the Mexican government in the next few weeks.
Our findings are the result of feedback shared by over 70 organizations that are deeply involved in North American trade and represent the perspectives of virtually all sectors of the Canadian economy. We also draw from ongoing engagements which we’ve had with our members and other North American business counterparts over the past year. This includes our many delegation missions to Washington, D.C., one of which just concluded last week and involved a policy conference on the 2026 CUSMA review that we jointly organized with the Brookings Institution.
[Translation]
Since it came into force in 2020, CUSMA has played a crucial role in the success of the North American economic partnership. Together, the combined economies of the three countries now account for nearly one third of the global GDP.
[English]
Given the uniquely integrated nature of North American economic and commercial ties, our close proximity and extensive trade flows, Canada, the U.S. and Mexico share a common interest in a USMCA — or CUSMA — that strengthens North American economic growth, prosperity and competitiveness.
The concept of North American economic security is, today, especially relevant, given the current highly uncertain global economic and security environment.
[Translation]
To ensure that the 2026 review of the agreement is a success that benefits all three countries, the Canadian Chamber of Commerce believes that this review should be approached with the following strategic priorities in mind.
First, priority must be given to the continuity of the agreement and its key existing provisions.
Next, targeted measures must be implemented to strengthen the agreement and improve North American economic security.
Finally, North American economic integration must be strengthened by reducing or eliminating the tariffs recently imposed in North America.
[English]
In order to ensure that the 2026 USMCA, or CUSMA, review is a successful endeavour that benefits all three countries, the Canadian Chamber of Commerce believes that the review should be approached with the following strategic priorities. My colleague, Gaphel, will now speak to those in more detail.
Gaphel Kongtsa, Director, International Policy, Canadian Chamber of Commerce: Good morning. As Catherine mentioned, we have three core strategic priorities, the first of which is that the three parties prioritize the continuity of the agreement and its existing key provisions. A fractious CUSMA review would harm businesses in all three countries that rely on the stability and predictability of the trilateral trading relationship.
The agreement brings substantial benefits by facilitating co‑production in key sectors, especially agriculture and agri‑food, automotive, steel and aluminum, energy, natural resources, medical goods and many others. These partnerships leverage complementarities between the three economies that create efficiencies to help companies produce high-quality products at low cost.
The second strategic priority should be to implement targeted measures to strengthen the agreement and to enhance North American economic security. Rather than being a disruptive exercise, we believe the review should be viewed as an opportunity to build upon the successes of the agreement, address shared geopolitical challenges, enhance North American competitiveness and access, ultimately, the untapped potential of the North American trading relationship. Such measures should be, in our view, targeted and oriented towards enhancing and building upon existing provisions of the agreement and, wherever possible, should have buy-in from all three countries.
We have identified seven key areas where there are significant opportunities to strengthen the agreement. These include establishing a robust U.S. CUSMA competitiveness agenda, ensuring the agreement keeps pace with advancements in digital technologies and heightened cyber-threats, prioritizing North American regulatory alignments, enhancing workforce development and mobility, modernizing and simplifying rules‑of-origin requirements, modernizing processes that hinder customs administration and trade facilitation and, finally, encouraging North American coordination on trade and security risks posed by non-market economies.
The third strategic priority should be to strengthen North American economic integration by reducing or eliminating recently imposed extraordinary tariffs within North America. I think we’re all in agreement that the recently imposed U.S. tariffs on Canadian and Mexican goods violate the spirit and commitments of the CUSMA, which is, of course, founded on tariff-free trade access across North America. These tariffs, justified in large part under section 232 of the U.S. Trade Expansion Act, the national security claims, are unwarranted, since imports from Canada and Mexico, key defence and industrial partners of the United States, do not threaten U.S. security in any meaningful way. Instead, the tariffs disrupt integrated supply chains, raise costs and weaken competitiveness.
We are recommending that the three parties work towards unwinding the recent section 232 tariffs against Canada and Mexico; that the three parties broaden preferential tariff treatments for CUSMA-compliant goods, in line with the currently existing exemption for tariffs under the provisions of IEEPA, the International Emergency Economic Powers Act; and that they introduce a U.S. or CUSMA rapid response mechanism for mitigating tariff escalation.
In closing, the Canadian Chamber of Commerce’s international team and its executives would welcome any opportunity to meet with you individually at any point during the CUSMA review process, and we believe strongly that frequent and frank engagements between governments and industry will be essential for securing a favourable outcome for Canada in 2026. Thank you.
The Chair: Thank you.
Mr. Greer, please go ahead.
Ryan Greer, Senior Vice President, Public Affairs and National Policy, Canadian Manufacturers & Exporters: Thank you, chair and committee members, for inviting Canadian Manufacturers & Exporters, or CME, to appear and contribute to your study.
For more than 150 years, CME has been the voice of Canada’s industrial economy, helping manufacturers grow, compete and create prosperity in communities across the country. Our sector employs 1.8 million Canadians, generates nearly $850 billion in annual sales and produces two thirds of Canada’s value-added exports.
Manufacturers have been hit hardest by unjustified U.S. trade actions — tariffs that have disrupted supply chains and weakened North America’s competitiveness. While we support all efforts to further diversify Canada’s export markets, these efforts are not a solution to our U.S. problem. The only way to fix our U.S. problem is to fix our U.S. problem, and we hope that the upcoming CUSMA review may provide an opportunity to do that.
The foundational idea behind CUSMA, and the North American Free Trade Agreement, or NAFTA, before, namely that our three economies should leverage our individual strengths to make things together to compete with the rest of the world, is no longer a universally shared belief. U.S. policies increasingly treat trade as a zero-sum competition, undermining the integrated production model that has sustained millions of jobs across the continent.
Canada must approach the 2026 review not defensively but with purpose: to strengthen cooperation, reduce friction and preserve the benefits that have fuelled continental manufacturing growth. A breakdown in our deeply integrated North American manufacturing supply chains would be deeply painful for workers, families and communities across the country.
Over the last several weeks, CME has surveyed more than 250 manufacturers of all sizes across the country regarding the CUSMA review process. Almost all of them — 98% — support extending CUSMA during the 2026 review. Three quarters said that non-renewal or getting stuck in an annual review process would significantly affect their business, and despite capricious U.S. trade actions, nearly 90% support deeper North American integration to boost competitiveness.
Manufacturers want stability, predictability and a constructive review process that reinforces, not weakens, North America’s manufacturing partnership. That is a challenging task, to say the least, for the government in the current context.
I’ll very quickly share a non-exhaustive list of some of our manufacturers’ priorities for the upcoming review.
In addition to a continuity of the existing agreement’s provisions, as mentioned by Mr. Kongtsa, CME is seeking permanent relief from section 232 tariffs. These tariffs are a tax on our shared supply chains, raising costs for producers and consumers on both sides of the border. Canada should seek to obtain a permanent exemption and/or codified limits on future unilateral actions.
Second, we need to strengthen North America’s response to unfair trade practices. All three countries face common threats from subsidized and dumped imports, particularly from non‑market economies. A renewed agreement should enable more coordinated enforcement and shared trade-remedy tools to defend regional producers.
Third, there is an opportunity to deepen cooperation on energy and critical minerals. Secure access to affordable energy and key minerals is vital to advance manufacturing. Expanding CUSMA to include a critical minerals and energy framework would strengthen supply chain security and reduce dependence upon non-allied and unstable suppliers.
Fourth, there is an opportunity to build a stronger North American defence industrial base. Economic and national security are now inseparable. Coordinated planning, procurement and industrial capacity have the opportunity to enhance resilience and support high-skilled manufacturing jobs across the continent.
Fifth, we need to look at how we can use the agreement to streamline borders and regulations. Manufacturers face delays and costs from customs and origin certification. Things such as digitizing certificates of origin and reactivating the Committee on Good Regulatory Practices can help to reduce the administrative burden and speed the movement of goods.
Finally, sixth, there is an opportunity to activate underused CUSMA committees which already exist in the agreement. So, in addition to the Committee on Good Regulatory Practices, bodies like the North American Competitiveness Committee remain largely dormant. Reviving them would allow all three governments to tackle issues in real time and demonstrate that CUSMA is a vehicle fit for purpose to tackle the geopolitical and economic challenges that lie ahead.
In closing, the 2026 CUSMA review will be challenging and certainly politically charged, but it’s also an opportunity. If managed strategically, it can reaffirm the principles that made North American manufacturing a global success: integration, stability and cooperation.
CME and Canada’s manufacturers stand ready to support the government and Parliament to ensure this review and the process strengthens our shared foundation and keeps North America the best place in the world to make things.
Thanks, and I look forward to questions.
The Chair: Thank you, Mr. Greer.
[Translation]
Honourable senators, I would like to remind you that you each have a maximum of three minutes for the first round, including questions and answers.
[English]
As always, please keep your questions precise so we can extract maximized answers from our witnesses.
We will begin the questions with the deputy chair of the committee.
Senator Harder: Thank you for being here. I have a request and a question.
My request is that you provide the committee in written form how various tools that President Trump has used for tariffs have affected your members. That is to say, you have talked about section 232, you have talked about IEEPA, and you have the counter-tariffs. It would be useful for the committee to have a sense of how all of that fits. You had IEEPA in the Supreme Court yesterday; you have section 232 tariffs being argued. It would be useful to have that structure.
My question is this: Are you working with your counterparts in the United States and Mexico to have a common position with respect to the renewal process? That would be interesting and certainly helpful but, I suspect, unachievable.
Mr. Greer: I do not mind jumping in first.
The short answer is yes, we are. We work very closely with our counterparts in the United States and Mexico. In the U.S., it’s the National Association of Manufacturers, and in Mexico it’s the Confederation of Industrial Chambers of Mexico. In fact, we welcomed manufacturers from all three countries — the leadership of those organizations — to Ottawa this time last year to discuss these issues, namely, how we can jointly share and promote a North American integrated manufacturing market.
It is perhaps a little easier for us in the sense that our members across all borders depend upon each other and share many of the same members. Three quarters of what our members ship across borders are parts, components and ingredients for each other’s manufacturing processes. Therefore, it is truly accurate to say we do not really compete against each other; we build things together to compete with the rest of the world.
For the better part of the last 18 to 24 months, we have been working closely with both organizations, spending time in D.C. and Mexico City, as well as having them here, to align. That does not mean there aren’t differences or that each of our organizations doesn’t have members who might benefit from specific measures around the section 232 derivative tariff.
However, in general, you will see all three of our organizations advocating to our national governments in the context of the current review to do everything possible to preserve the integrated economic platform that is North American manufacturing, to look at the opportunity to take the agreement, do some of the things we suggested around making it even more future-proof and equipped for some of the challenges that lie ahead and to avoid stepping backward, not just through tariffs but via any other activities that would undermine the agreement itself.
We don’t agree on everything and we don’t collaborate on everything, but we certainly work very closely and are aligned on the broad strokes for what is important for North American manufacturers.
The Chair: Thank you. I want to refer to the first part of Senator Harder’s question, which was a request. If you have that information and can put it together for us, that would be very useful. Please send it directly to the clerk of the committee, Chantal Cardinal. Thank you.
Senator Ravalia: Thank you for being here and for your contributions to our economy.
If I can take an off-ramp — and this is for you, Ms. Fortin Lefaivre — in the event of an unsuccessful joint review, to what extent have you begun to engage your ground game abroad, using your international networks? In particular, I would appreciate any connectivity you have established with China.
Ms. Fortin Lefaivre: As Canadian businesses, we have all had to reflect over the last year in terms of how we adapt to these quick, dynamic trade environments. Even before that, the Canadian Chamber of Commerce had heard from its members that they wanted the organization to be more internationally involved in various respects.
We have taken steps to do that. Just in the last two years, we have embarked on over a dozen international trade missions. Many of those are to the U.S. and to Washington, D.C., but they have also been to Brazil, Italy and the U.K. Next week, we are going to the Business 20, or B20, summit in South Africa. So it is very much on our minds that we need to find alternative markets and invest more of our time in building those relationships.
We don’t have any specific plans regarding China. It is an active question. We are mindful of the important economic opportunities that exist in China, but we are also mindful of security considerations that need to be asked regarding our trade there.
Certainly, diversification is top of mind for us. You will see that the Canadian Chamber will be looking to lean in more to those opportunities, not just for us as an organization but for our chamber network. As you may know, the Canadian Chamber of Commerce represents the whole gamut of businesses in Canada, from the very small, across the country, to the large multinationals that have operations in Canada. We want to ensure the smaller organizations, the SMEs — the chamber network that is represented by our local chambers from coast to coast to coast — they may have engaged more specifically with the U.S. in the past and have been successful. Anecdotally, many of them are questioning what they do next. They will need help in how they figure out that next step.
There are a lot of great government programs that exist through EDC and the Trade Commissioner Service, but we want to see where we can fill the gaps to get those smaller organizations, especially, to consider their alternatives and be successful, because we know that is a big ask.
Senator MacDonald: I have so many questions; we could be here for hours.
I have always maintained that we cannot control the actions of any American administration. The only thing we can really control is how we conduct ourselves. I would like your opinion on how the Canadian government has approached these negotiations. Would you have done anything differently?
Mr. Greer: I am happy to answer first.
That is a difficult question to answer, not being privy to what has happened behind closed doors in those negotiations. We spend a lot of time coordinating with Global Affairs and Minister LeBlanc, the Prime Minister’s Office and parliamentarians to inform and provide as much intelligence and insights as we can, both from what we know based on our members and their commercial relationships and also from what we know from our conversations with our allies in Washington, D.C., and the manufacturing representatives there. But it is difficult to assess what’s going on behind closed doors.
For us as manufacturers, it is perhaps a little bit different than for some other sectors of the economy. Arriving at a deal — not a bad deal but some kind of deal — is more urgent for our members than some other sectors because we are so deeply integrated with the U.S. We are the ones being hit first and hardest by trade action. All of our members are affected in some way, even if they are CUSMA-compliant. They are integrated into the U.S. manufacturing processes. U.S. manufacturing is soft right now. Corporate partners are looking to diversify away from Canada, even if there is no tariff, in certain cases. They are all being impacted in one way or another.
We are hoping for some section 232 relief as soon as possible and are hopeful that those discussions can resume productively in the short term. Obviously, we are hoping that the CUSMA process results in a renewed agreement because there are tens of thousands of manufacturing jobs that depend upon it.
Senator MacDonald: I am a big believer in complete free trade. I have heard the President, over the years, say that he believes in free trade; it just has to be fair.
If we adopted complete free trade in everything, I believe we would become the wealthiest country in the world. What do you think of complete free trade?
Mr. Greer: On behalf of manufacturers, I will say that manufacturing is not a protected sector in any way. We are entirely trade-exposed. Our members are conducting themselves in a global trade environment that was, until recently, extraordinarily free. That is what strengthens our sector and what has also led to some of our difficulties.
So, in principle, fewer barriers and more opportunities to trade, fewer non-tariff barriers, create more opportunities for Canadian manufacturers to sell to other markets and are a net benefit to our members.
The Chair: I wish to note that Senator Coyle of Nova Scotia has joined the meeting.
Senator Ataullahjan: Thank you for being here this morning and for having these discussions. They are ongoing; we still are learning. We wake up every day and wonder what is coming at us.
My question is similar to what Senator Ravalia asked. Are Canadian businesses ready to take risks and look at markets other than the U.S.? Having been on this committee on and off for a long time, we have consistently heard that Canadian businesses are risk-averse. We keep hearing businesses and people say, “We should have done this long ago.” Do you think they are finally ready to take a risk and look at other markets?
Ms. Fortin Lefaivre: Again, we represent the full gamut, and the risk tolerance will be different by sector, opportunity and size. Many will be forced to look at other markets; they won’t have a choice.
What we need to do — us being representatives of the business community working closely with government — is look at the current barriers. Why haven’t they shifted in the past? We need to tangibly zero in on those. Are our current programs and supports adequate? How are we executing on those supports?
There are new provisions to support market diversification in the budget that was tabled earlier this week. That is encouraging. How are we executing on those? Are they actually working for businesses?
The only way to figure that out is to actually work closely with businesses. We stand ready, as the Canadian Chamber, to roll up our sleeves and be part of the design of whatever the new programs are to make sure they are on the ground and being used. It is one thing to announce something; it is another to ensure it is useful.
I would say let’s zero in on why we haven’t in the past. Coupled with the fact there is now an urgency and necessity that weren’t there before, that will force us to go down that path.
Trade agreements are great, and we’re happy to see there are so many, but it is the utilization that comes into play there.
Mr. Greer: To answer briefly, one thing that gets lost in the diversification question is that Canada can be a relatively high‑cost jurisdiction to do business. That is offset by our geographic proximity and connectivity to the U.S. market. That has been a tremendous benefit to our economy.
In addition to the tools, resources and financing that Ms. Fortin Lefaivre described that are very important to businesses, particularly SMEs, any efforts to seriously diversify — and we acknowledge the government’s goal to try to diversify non-U.S. exports over the next decade — need to be accompanied by very strong efforts to lower the costs of doing business within Canada in order to make us more cost‑competitive. Ultimately, it is price in those markets that will drive our ability to compete. Look at the tax system and the tax burden. Look at the regulatory burden, internal trade barriers and other things that make our internal market less efficient. We need to be serious about those if we are going to make Canadian manufacturers or any other sector more cost-competitive in new markets.
Senator Woo: Thank you for your testimony.
A common theme in both of your presentations is the need for deeper integration and what you call “regulatory alignment.” There was a time when regulatory alignment meant easing the passage of trade across the Canadian-U.S. border and reducing barriers — what we used to call “trade facilitation.” The new regulatory alignment is not that. It is about aligning with American geopolitical priorities. It is about aligning with the entity list, perhaps, or maybe even higher common external tariffs. It is aligning with American investment priorities for their benefit.
Is that the kind of regulatory alignment that you favour? Also, how do you see that benefiting Canada, despite perhaps smoothing the trade barriers between the two countries? What I am saying is that you could have a high external barrier, even though you have smoother trade between the two countries.
Ms. Fortin Lefaivre: It is a complicated question.
Senator Woo: It is real. It is happening.
Ms. Fortin Lefaivre: It is happening for sure.
I think we always have to look at what is best for Canada. Sometimes, what is best for Canada, at the end of the day, in order to enable our growth, is to align with U.S. requests. Sometimes, it’s not.
We also have to look at what is best for Canadian businesses so they can do business with international partners and grow. We hear from our members that when there is a lack of interoperability in certain sectors — let’s take the tech sector — it makes it harder for those start-ups to compete globally, because there’s a patchwork of regulations, maybe at the provincial level or the federal level, that isn’t aligned with other countries they want to work with. That means a lot more compliance burdens and costs.
From our standpoint, what we’re looking at is how hard it is for Canadian businesses to do business with the world. If we are interoperable in that respect, it’s good for us.
Every trade question now is related to CUSMA. We’re seeing that they’re no longer separated; it is not what is under CUSMA and what’s not. It’s almost like everything is fair game, which makes it very complicated.
It’s not a black and white answer, but at the end of the day, we need to justify our actions with answering the question of whether something will benefit Canadians long term and if it will enable our growth. We can’t be doing something just because it’s the politically right thing to do at the moment; it has to be a long-term economic growth plan.
Senator Wilson: My question was basically asked by Senator Harder, but I’ll put a twist on it. I’ll give Ms. Fortin Lefaivre a chance to respond.
In terms of your work with your counterparts in the United States, and this applies to CME also, I know from my experience with your organization — in fact, I was chair during the last Trump presidency — that there are very deep connections between the U.S. Chamber of Commerce and, particularly, the Republican side of the House of Representatives and the U.S. Senate and, often, with the President. It seems to me that by the time we get to next year and we’re starting to look at renegotiating this, some of the pain will have been felt, and people might be prepared to stick their heads up a bit more in the U.S. Are you building a strategy, as we’re going through the CUSMA review, to be working with those folks in the U.S. Chamber of Commerce — this question is also for CME — to ensure there’s alignment? I personally think they’ll be the most influential people in terms of getting a deal done in this current context.
Ms. Fortin Lefaivre: I have to say that we work very closely with the U.S. Chamber of Commerce — different groups within that large organization. They’ve been very collaborative, and we’ve actually been very aligned. Gaphel Kongtsa can speak to that, but we trade and compare notes with their team in working on the USTR submission.
I would say that we’re very aligned on the fact that we want to be preserving and strengthening the agreement. There will definitely be different views at times, but we share some members, as well. That’s a very positive relationship there, but there are many influential groups in the U.S. and in D.C. That’s something we have been focused upon increasing over the last few years. Gaphel was just in Washington last week, leading a group with our CEO. We did a joint event with the Brookings Institution and a number of other organizations we’ve been collaborating with, such as the Center for Strategic and International Studies, or CSIS, and a few others over the last few years.
We’re deepening our ties there, but we’re seeing there’s a lack of a presence of a Canadian voice in D.C. We’re trying to fill that void without actually being present there.
Mr. Kongtsa: To add to what Ms. Fortin Lefaivre just said, it’s an important feature of these discussions that there is broad alignment between the business communities in Canada, the United States and Mexico on many of these questions. Based on discussions that we’re having with our partners in all three countries, we really all want the preservation and continuity of the CUSMA, and we want to enhance North American trade ties.
There are areas in the margins where there are some disagreements, and, of course, there are trade irritants, but, broadly speaking, I think we’re all in alignment.
[Translation]
Senator Hébert: Thank you very much. Good morning, everyone. It’s a pleasure to see you here. Ms. Fortin Lefaivre, you spoke a little earlier about export services for businesses. In Canada, there is Export Development Canada, or EDC, the Canadian Commercial Corporation, or CCC, which helps access government markets, and the BDC, which provides financing for equipment and other things for businesses.
Let’s focus on high-potential players, because we know that it is much more complex for SMEs to diversify markets. I would like to know if your members use the services of these organizations. If not, why?
Ms. Fortin Lefaivre: That’s an excellent question, and I would like to be able to give you more specific data on that, but we would have to survey our members. Usually, it is not the big players who have trouble accessing services, but SMEs. That is where we need to focus, especially considering that 98% of our businesses in Canada are SMEs. If we don’t get them on board, it will be difficult for us to accelerate diversification. I would be happy to get back to you with a little more data on this. We want to focus our efforts where we can help speed things up and where there is a gap to fill.
[English]
Mr. Greer: I will provide some anecdotal evidence. When we speak to small- and medium-sized manufacturers — in fact, I was just chatting with one of our SME members yesterday — they find the programs valuable, whether it be access through EDC, BDC for some supports. Certainly, they find the trade-diversification supports valuable.
These programs are still very difficult and daunting to access. They are expensive. They have to work with grant companies that help you navigate the process in some cases, and there’s a cost to that. If they go it alone, it can be very intimidating. After the fact, they can recognize the value of the support and say, “I’m not sure if I’d go through that again,” because of the opportunity cost of all the time and energy they have to put into access.
So one of the things we’ve said repeatedly to the government is that more support and more funding are important, but you need to make these things easier to access. The operating principle of every program, especially in a time of crisis, can’t be “How can we guard against getting slapped on the wrist by the Auditor General in three or four years?” Why do we have to presume that everyone who is accessing the program is trying to take advantage of it? How can we be more facilitators of the kinds of activities we need to have? That takes a real culture shift and a lot of political leadership, but we think it’s going to become really necessary if we’re going to help SMEs access new markets in the months and years ahead.
Senator Al Zaibak: Thank you all for joining us and testifying this morning.
Having previously served as a member of the board of directors of the Canadian Chamber of Commerce and having worked closely with the manufacturers’ association, I appreciate the work you do for our businesses and for our country. Thank you so much.
On October 15, 2025, Candace Laing, President and Chief Executive Officer of the Canadian Chamber of Commerce, argued that U.S. tariffs would drive up costs for American businesses and consumers, while hurting Canadian exporters who have played by the rules and invested heavily in the U.S. market. In your view, how would you assess the performance of the Canadian government in bringing its message about the benefits of CUSMA to the American people, businesses and political leaders so far?
Mr. Greer: I’m happy to jump in first.
I think the government has been doing relatively well. Success will ultimately be graded on where we end up with the agreement and relief from some of the section 232 tariffs.
The challenge, at least how we’ve perceived it based on our interactions in Washington and with allies in the United States, is there isn’t deep support at all for the action against Canada. It is the administration; it is key figures, led by the President himself. In meetings we’ve had with members of the House of Representatives, senators, even right-wing MAGA representatives, we detect very little animus for action against Canada. They’re well aware of how integrated supply chains in their state or district are into Canada. They’ve heard about the damage from this. It’s really just the political incentive not to speak up. They have other things they’re focused on, and not getting offside with the administration is one of them.
The returns on how far we, collectively, as the business community can reach into U.S. supply chains and push for alternative views — I think we have a lot of allies; I just think they are not incentivized politically at the moment to speak up in a way that would be beneficial to the Canadian relationship. We also have to acknowledge there are limited things we as Canadians or the Canadian government can do to change that in the short term.
To bring it back to CUSMA, we detected a lot of support to take the Canada-U.S. relationship, no matter how difficult these discussions are, and move it into a more formalized process. CUSMA presents an opportunity to do that. Even if those discussions are difficult, it’s better to have those discussions in a formalized process and hope we can drive that towards a new deal that benefits manufacturers on both sides of the border.
Manufacturing in the U.S. is not in the middle of some boom. This has not been a tremendous benefit to U.S. manufacturers thus far at the cost of Canadian exporters. It has been a softening of manufacturing across the continent.
Senator Adler: I don’t know whether anyone on the panel is comfortable in offering any kind of an opinion on what happened yesterday in what could be called the court of confessions at the Supreme Court where the Trump administration didn’t appear to be having a good day. His defence lawyer was the Solicitor General, who admitted that, yes, this was a tax; yes, this was a tax being paid by Americans; and, yes, the executive is not constitutionally allowed to raise taxes; only the Congress can do that, unless there is an emergency. They even admitted that what they were calling emergencies weren’t very urgent. They had a tough day. I’m wondering if their tough day is a good day for Canadian business and Canadians.
Mr. Greer: The short answer is yes. We were following some of the discussion yesterday. I haven’t had a chance to review all of the hearing. Certainly following U.S. markets, they seemed to react favourably to some of the testimony you’re referencing.
Our hope is for a positive outcome to that case. How it will impact Canada; what the political, economic and government fallout in the U.S. will be — there are many unanswered questions.
In net effect, we think the tariffs are not justified. We know there are many allies in the United States, including those who handed some of these powers to the executive, who are regretful of where that has led the Canada-U.S. relationship in the use of them.
In net, it’s positive for Canada, but it’s one positive piece of news. We need to see where it ends. We need to see how it fits into the broader bilateral discussions, and then trilateral discussions ahead of us.
Senator Adler: Is the Canadian Chamber optimistic today, a little more optimistic than yesterday?
Ms. Fortin Lefaivre: Perhaps. There are updates every day. It’s up and down in terms of the news that comes out of the U.S. We’re paying close attention. We’re weighing in with the media many times a day. We have to remember not to get too swayed one way or another by the news in the U.S. and keep our eye on the ball, which is CUSMA renewal. At the end of the day, that’s what we want — to have an agreement that is as favourable for Canadian businesses and the economy as possible. Yes, we’re paying attention, but it’s a daily barrage of news. We’re guarded in our reactions.
Senator Pupatello: I think you’ve likely found vehement agreement everywhere you’re taking your message within Canada with provincial and federal agencies, ministers, everyone you’re plying with information, here as well. We hear the message and understand it.
Knowing we can’t control what they do, and even if a court were to side with us on this, the President’s office may not listen to that in any event. They’re abrogating the trade agreement now, so my question is this: Have you put anything on the table that would allow the government to put something forward? Because they are apparently waiting for that good deal, because we’re saying no deal, unless it’s a good deal. How long should we wait for that? I’m thinking about our manufacturers and how long they can wait, knowing how close to the brink some of them are.
Not everyone in America in manufacturing is actually on our side: the United Automobile, Aerospace and Agricultural Implement Workers of America, or UAW, on the shop floor, or the tool, die, mould guys who think they can take all our tool, die, mould business, but they cannot. Interestingly, there are these little things. At what point do you say, “Just give them something”? How long, and what would you offer?
Mr. Greer: That’s a difficult question to answer not knowing the dynamics of the discussions that have been had to date.
As opposed to being defensive, there are a lot of opportunities to be offensive, to look at our shared interests and how we can deepen cooperation to provide things we know the U.S. wants and needs. Again, we think about energy and critical minerals cooperation as being a big opportunity and one that can be net sum for everybody, as opposed to getting trapped in this “Who can give up what to get what?”
We think all the opportunities around how we can more deeply collaborate around shared economic and geopolitical goals on issues we know are important to the Americans in particular is the place to start.
In terms of how long, as I mentioned — and as you well know, senator — it’s manufacturers that are being hit hardest. That’s where many of the layoffs are happening. That’s where more damage is to be foreseen if there are additional 232 derivative tariffs, which we anticipate in the months ahead. We are continuing to communicate urgency. We think a bilateral deal in advance of the CUSMA renewal discussion, which will be extended over a longer period of time, is important.
Our focus, again, is on where we can offensively collaborate to address shared interests as opposed to looking at questions of what and where we give up. We think it is important for the government to look at all of the factors and deeply understand what the Americans’ interests are and how we can meet those in a way that is beneficial to everybody.
Ms. Fortin Lefaivre: It really depends on the sector. The hardest-hit sectors — steel, aluminum, auto — want deals and relief ASAP. We represent many of those. We agree something has to give there.
At the same time, we wouldn’t want to make a deal that gives us less leverage down the road, if we’re looking at the big picture. We do have a lot to offer if you think of critical minerals. Would it be worthwhile to have a side deal with critical minerals ahead of time? Our membership would probably be divided on that. The details really matter in terms of what we’re considering.
It is fair to say we’ve entered the CUSMA renegotiation time. Everything is fair game at this point. Status quo is we still do have a carve-out. It could also be worse.
The Chair: I have a question to ask all of you. We’re a decentralized federation in our country. It’s important we can speak with one voice, especially going into discussions, negotiations with the U.S. Do you feel we are speaking with one voice?
Ms. Fortin Lefaivre: It’s a question we’ve posed ourselves. The Team Canada approach, could it be better? Certainly, there’s room for improvement in ensuring all partisan stripes and types of contributors are involved in that process.
I know from a business standpoint we are engaging quite a bit with the government on this issue, and very positively. There’s always room to do more. The business community stands ready to roll up their sleeves even more so and be more involved in those discussions and weigh in on the behind-the-scenes discussions that are happening, too. I would say we’re there to be leveraged more if the appetite is there.
Of course, speaking with one voice is very important. Obviously, it’s very difficult. It sounds obvious to say, but any kind of division internally will not serve us well.
The Chair: That’s a diplomatic response. Thank you.
Mr. Greer: Maybe I’ll chime in. I think one area where we’re not speaking with one voice, which is directly related to this, is even where we were six or seven months ago around doing everything necessary to generate as much business investment and growth as possible in the Canadian economy. Six or seven months ago, it was all internal trade barriers, bilateral deals and mutual recognition. It was about building everything and getting it done as fast as possible.
We’re seeing some cracks in how various jurisdictions are responding to that. I don’t hear as much. I know there are a lot of behind-the-scenes discussions in terms of getting some of these internal bilateral trade agreements done, but that’s one area where we clearly want to see all levels of government remain as focused as they were six or seven months ago on doing everything they can to incentivize business investment. I think that’s one area where we’ve seen a softening that we would like to see turned back.
[Translation]
Senator Hébert: Ms. Fortin Lefaivre, I would like to come back to your comment about SMEs and exporting. I would like to know one thing about when you survey your members: I think it is easier for an SME to integrate into the supply chains of foreign companies that are established here. If we look at France, particularly L’Oréal Paris, Danone Canada and Air Liquide, it is much easier for SMEs to then break into the international market because they are already in the supply chain.
Mr. Greer, you mentioned complexity. In Quebec, Investissement Québec, which is the equivalent of BDC, has created a division for international investments; this allows businesses to work with Canadian delegations and consulates abroad.
Do you think Canada should adopt a similar model? As a result, companies would only have to deal with one organization, and once they were in, they would be taken care of. Internal teams would direct them to funding programs, so they wouldn’t have to deal with three agencies, as is currently the case — BDC, EDC and CCC — but rather a single entity where they would have access to everything they might need. This model is not perfect, but I would like to hear your thoughts on it.
[English]
Mr. Greer: Thank you for the question. I’m not directly familiar with the model, so I wouldn’t want to comment specifically on how it may be working for some of our Quebec‑based members. In principle, the idea of a single-access concierge service to support I think is an important one and can be helpful for SMEs. It’s very intimidating to look at six different programs and six different points of access.
I will go back to what I said earlier: Once you get into the program and go through the process itself, governments will tend to defer to, “What if we create a new tool, a new way to help them understand the complexity of the system?” Those are helpful, but there also needs to be a focus on decreasing the complexity of the system itself. You continue to layer on time, process and risk, but even with some of those tools, it can prohibit people from willing to take that chance or access a program a second time. I think those types of supports and services are helpful, but I also think the back-end complexity of the programs themselves and the processes and requirements need to continue to be streamlined.
Senator Woo: Do you agree that there’s a non-zero probability that the U.S. will choose to withdraw from CUSMA on July 1, 2026, and start the 10-year countdown? In that eventuality, what are your organizations doing to prepare for it?
Mr. Kongtsa: Thank you for the question. It is possible. The CUSMA does include within it the possibility for any of the three parties to withdraw with sufficient notice — I believe it’s six months. As we approach the 2026 review, of course, there’s also the possibility of a withdrawal. We’re looking at all sorts of different possible scenarios from a business standpoint.
I think one of the more plausible but less desirable scenarios is that we fall into bilateral deals as opposed to a trilateral deal moving forward. From our standpoint, though, I think the trilateral approach is hugely preferred. I don’t think we’ve encountered any members or businesses in the United States, Canada or Mexico that favour breaking up the agreement into bilaterals or even the failure to renew the agreement in 2026, leading into annual renewal discussions, which would themselves be hugely disruptive to businesses.
I suppose, yes, it is possible. I think on balance, though, it’s still unlikely. We think it’s more plausible at this stage that we’ll enter a kind of renegotiation period where there will need to be concessions on all three sides. It likely will be challenging, but as far as we can tell from the private sector perspective, there’s no appetite for the other alternatives.
Mr. Greer: I agree with everything Mr. Kongtsa said. All I would add is, for our sector, short-term relief and getting a deal as soon as possible are going to save many jobs and a lot of uncertainty. Nevertheless, Canada will need to continue to take a long-term view on this. There’s no guarantee that the figures in the administration who are most supportive of the approach to Canada will be there. Maybe for the duration of the current administration, certainly, but there will be mid-term elections coming up, and then, of course, there will be another presidential election.
If we do enter into that business-to-business model, we’ll need to continue to remain as close, if not closer, to our U.S. and Mexican counterparts in terms of how we approach that. We need to continue to communicate what the problems with a year‑to-year renegotiation or withdrawal would look like on all sides of the border, and we need to continue to think long term about what is best for the North American manufacturing platform for the decades ahead as opposed to just the months and years ahead. Keeping our heads down and doing the things that we’ve been doing and the government has been doing will remain even more important in that type of scenario.
Senator Ravalia: I was wondering to what extent, if any, the interprovincial trade barriers are a burden for your sector or industry.
Mr. Greer: Yes, a very big burden, and it depends on what business you’re in and what you’re doing. In short, different Senate committees, House committees, think tanks and others have done a tremendous amount of work and research on this problem. I think we in the business community have been talking about this as much as we possibly can for the last couple of decades.
As I mentioned earlier, we were sort of encouraged that one of the small silver linings to the current trade environment was, all of a sudden, a big rush to try to eliminate a bunch of these barriers through mutual recognition, which is really the only true way to do it in the sense that most of these are small regulatory differences; obviously, they’re not tariff barriers between provinces.
We are hopeful that, regardless of what happens in the weeks and months ahead on Canada-U.S. trade and on the CUSMA, that urgency does not dissipate, because, ultimately, it means more jobs, more wealth and a better standard of living for all Canadians if governments can put the time and energy into removing those barriers.
The Chair: Thank you very much. We’ve come to the end of our panel time, so on behalf of the committee, I’d like to thank Catherine Fortin Lefaivre, Gaphel Kongtsa and Ryan Greer for being with us today. I think it’s very important for us to hear from businesses and from manufacturers across the country whom you represent. This is a big existential issue for our country, and we will continue our studies. I dare say we’d like to have you back a little later on. Thank you again on behalf of the committee.
Colleagues, I would like to note that Senator Todd Lewis of Saskatchewan has joined us.
We are pleased to welcome back as witnesses from another time, from the Canadian Agri-Food Trade Alliance, Michael Harvey, Executive Director; from the Canadian Cattle Association, Tyler Fulton, President, and Dennis Laycraft, Executive Vice President, who are joining us by video conference; and from the Grain Growers of Canada, Kyle Larkin, Executive Director, who is here with us in the room.
We are ready to hear your opening remarks. As per usual, that will be followed by questions from senators and your answers.
Mr. Harvey, the floor is yours.
[Translation]
Michael Harvey, Executive Director, Canadian Agri-Food Trade Alliance: Thank you for inviting me today.
The Canadian Agri-Food Trade Alliance, or CAFTA, is a coalition of national organizations that advocate for a more open and fairer international trading environment for the agriculture and agri-food sector.
[English]
While the Canada-U.S. trading relationship has faced elevated political uncertainty under the current administration, it is essential to underline that these risks have not materialized in the agri-food sector. Most Canadian exports continue to benefit from tariff-free access to the U.S. market under CUSMA provisions applicable to qualifying agri-food products. This is favourable to the position of several competitors in the U.S. market.
CAFTA and its members have sought to manage this political risk by increasing our level of engagement with U.S. agri-food stakeholders and political actors. A coalition of all 12 CAFTA members and I will be travelling to Washington, D.C., from November 17 to 19 to meet with members of Congress and staffers, administration officials and U.S. agri-food stakeholders. We undertook a similar mission in April, when Senator Harder and I had an excellent conversation at the airport while waiting for a delayed flight.
We have found the U.S. sector to be largely supportive of agri‑food trade with Canada and of CUSMA as a stable framework for this trade. The U.S. agri-food sector is, like ours, largely export-focused. Many in the sector tend to view Canadian agri‑food imports as important inputs that enhance their global competitiveness. They recognize that Canada and the U.S. produce food together and have built integrated supply chains over the years that would be extremely costly to dismantle.
CAFTA welcomed the letter of October 30, 2025, in which 124 organizations representing the American food and agriculture value chain expressed support for a full 16-year renewal of CUSMA. The letter underlines that CUSMA “. . . allowed agricultural exports from the United States to soar.”
CAFTA thus believes that the U.S. agri-food sector will remain a valuable ally in reinforcing to the U.S. administration that imposing tariffs on Canadian agri-food would undermine shared economic interests.
It is increasingly evident that other sectors of Canada’s economy face heightened tariff exposure as the U.S. administration appears to view some sectors to be more strategic or related to national security. It is critical that the Government of Canada manage these U.S. concerns in a way that avoids spillover effects, particularly the imposition of across-the-board tariffs on sectors such as agri-food, to which the U.S. has not accorded the same strategic priority.
Moving on to Mexico, we welcome the Government of Canada’s efforts to strengthen relations with Mexico in the run‑up to the CUSMA review. In our opinion, a durable trilateral agreement is in the interests of all three countries, given our shared continental geography and the integrated supply chains we have built up accordingly. It is normal in a trilateral negotiation for discussions to be bilateral at times and trilateral at others. However, Canada should continue to pursue a trilateral agreement because such an outcome protects market access, regulatory coherence and regional competitiveness, all of which is in Canada’s national interest.
[Translation]
I will be pleased to answer any questions you may have.
[English]
The Chair: Thank you very much, Mr. Harvey.
We will now hear from Mr. Fulton, please.
Tyler Fulton, President, Canadian Cattle Association: Thank you, Mr. Chair, for the invitation to appear before your committee regarding the Canada-United States‑Mexico Agreement, or CUSMA, and Canada’s trading relationship with both the United States and Mexico.
My name is Tyler Fulton. With my family, we have a beef farm outside of Birtle, Manitoba. I’m currently serving as the President of the Canadian Cattle Association, or CCA.
Through our provincial members, CCA represents almost 60,000 beef producers. Canada’s beef industry contributed $16.8 billion in farm cash receipts in 2024, contributes $39.4 billion to national GDP annually and accounts for about 347,000 jobs. We are a trade-dependent industry, with over $7 billion worth of live cattle and beef exports in 2024. Our ability to export increases the value of every animal by about 40%.
The United States accounts for 85% of these exports, with Mexico accounting for about 4%. As such, Canada’s trade relationships within North America are absolutely critical to the success of our sector.
In reality, the Canada-U.S. beef industries operate within a single North American market where processed beef and live cattle have historically moved across the border relatively unimpeded and tariff-free. Feed and inputs are also a critical part of this integrated market with the U.S. There may be a calf born in the United States, fed in Canada and shipped back to the U.S. processor or vice versa. Having tariff-free access is crucial to maintain the integrity of our integrated sector.
The integrated market provides benefits on both sides of the border. These benefits have been enhanced through the Canada‑United States Free Trade Agreement, or CUSFTA, then NAFTA and now CUSMA. The agreements have made the North American beef industry more competitive globally and have created the most resilient food system in the world.
We need to have a Team Canada approach that seeks to build on CUSMA’s benefits without jeopardizing the existing agreement, particularly when it comes to tariff-free access to each other’s market. This is essential for Canadian beef producers who are ready to be part of a deeply integrated supply chain across the continent.
CCA was pleased to see the Government of Canada remove tariffs from U.S. products that were compliant with CUSMA. This was in line with our industry’s recommendations to both Canadian and American officials. CCA continues to work with industry partners across North America to uphold CUSMA and protect the economic and competitive benefits of the agreement.
CCA stands ready to work with the federal government to shape the North American trading relationship. As industry leaders, we continue our triannual dialogues with our American and Mexican counterparts to maintain our productive and collaborative relationships in the cattle and beef sector.
CCA and provincial beef leaders continue to travel to state-level cattle industry meetings as well as the U.S.- and North American-focused events where trade remains a priority. We will continue our advocacy with U.S. stakeholders with the goal of maintaining the strong integration of our sector. Where there are opportunities for us to work together with your committee or Canadian senators at large, we are ready to join and speak to the positive trading relationship.
Thank you for your time. I look forward to the discussion.
The Chair: Thank you, Mr. Fulton.
Last, we will hear from Kyle Larkin. You have the floor.
Kyle Larkin, Executive Director, Grain Growers of Canada: Thank you, chair and members of the committee, for inviting us today.
As the national voice for Canada’s grain farmers, Grain Growers of Canada, or GGC, represents over 70,000 producers through our 14 national, provincial and regional grower groups. Our members steward 110 million acres of land to grow food for Canadians and for 160 countries around the world, creating $45 billion in export value annually. As the farmer-driven association for the grains sector, we champion federal policies that support the competitiveness and profitability of grain growers across Canada.
The Canada-United States-Mexico Agreement remains the foundation of a stable, predictable and competitive trade environment for Canadian grain farmers. Since its implementation, CUSMA has safeguarded tariff-free access to two of our largest export markets for grain and grain products, accounting for over $18.6 billion in 2023. For producers, this translates into stable demand, market confidence and the ability to reinvest in on-farm innovations and productivity, as some of the farmer senators around the table might know.
CUSMA has also been essential in integrating our continental production system, with grain and grain products crossing borders multiple times before reaching their final customer. Canadian grain is a vital input for American food, feed, milling and biofuel industries, while Mexico remains an essential partner for value-added processing and livestock feed markets. For Canadian grain farmers, North American integration means reliable access to inputs and markets, a predictable business environment that encourages investments and the ability to maintain a competitive edge over growing global competitors.
However, CUSMA and tariff-free access within the bloc, especially with the United States, are being challenged. While grain and grain products currently remain tariff-free under the agreement as of this moment, uncertainty due to changing trade policies by the American administration has impacted grain farmers’ bottom lines. Furthermore, tariffs on steel and aluminum will have an impact on the future costs of farm equipment.
To support the livelihoods of producers, and as we look forward to the 2026 review of CUSMA and possible renegotiation, there are a few key pieces that our sector requires. The first and foremost is the preservation of tariff-free access to the U.S. and Mexico through CUSMA. Prior to pushing for changes, the government must secure the continuation of the trade agreement. This includes ensuring that all sanitary and phytosanitary measures remain science- and risk-based. It also includes protecting the dispute-settlement mechanism under CUSMA that is essential for state-to-state resolutions of disagreements over treaty obligations, ensuring that member states are unable to ignore their commitments.
To further the success of CUSMA, the government should seek further regulatory alignment between our three countries. This will ensure that grain and grain products can more easily flow to export destinations, allowing further market growth within the North American bloc. Furthermore, coordination with the U.S. and Mexico should be enhanced to address potential or current non-tariff barriers that may emerge.
Finally, during a time of international geopolitical shifts and trade uncertainties, CUSMA has and can continue to have the potential to keep North American farmers prosperous. The preservation of CUSMA is essential in supporting the bottom lines of family-run grain farms, especially at a time when our second-largest trading partner, China, continues with direct tariffs on canola and peas.
CUSMA has been an invaluable agreement for the Canadian grain sector. It has allowed grain farmers to thrive in an integrated and competitive marketplace. Its preservation must be the number one priority of the Government of Canada.
Thank you, and I am happy to take any questions.
The Chair: Thank you. We will go to questions and answers.
Colleagues, I only have three senators on my list so far, so I encourage you to think about questions.
Senator Harder: Thank you to our witnesses for being here.
My question is for Kyle Larkin. It has to do with your reference to the tariffs on canola and peas and the desire to have a CUSMA that comes out of this review process be relatively intact.
Premier Moe, as you know, has called upon the Government of Canada to react in a fashion that allows China to lift the tariffs. I would welcome that, but I’d like your views on how we knit that aspect with your desire to come out of this CUSMA process whole.
Mr. Larkin: That is a great question.
I will start by saying that grain farmers are stuck between a rock and a hard place right now. The rock is the United States, and the hard place is China. We are stuck between these two major geopolitical powers and are being squeezed, as are the bottom lines of grain farmers. I have spoken to many grain farmers over the past few weeks who have had average to above‑average yields — which is good news — but they are having lower-than-average prices for their crops. Therefore, they are either coming out even or losing money on what they have grown over the past six months.
I will share a few tidbits and stories. First of all, Michael Harvey and I, and the CAFTA delegation, were in Washington, D.C., in early April, meeting with members of Congress — senators and political staff. One of the notes I took coming out of those meetings was that we spoke a lot about the Chinese tariffs and the Chinese situation, both between the U.S. and China and between Canada and China. What amazed me was that all of the members of Congress we spoke to, Republican and Democrat, did not know that Canada had taken tariffs against Chinese electric vehicles at the behest of the American administration. They did not realize that it had happened and was still happening.
We had taken these tariffs against electric vehicles and Chinese steel and aluminum tariffs. Canadian grain farmers are being impacted because of that decision, and the American administration and members of Congress are unaware of that action by our government. That is one piece I would give you.
The other piece I would give you is that we cannot sacrifice our U.S. relationship, just like we can’t sacrifice our Chinese relationship. I understand it is a tough situation right now between the American administration and the Chinese administration, but we have to find a better path forward. We have to find a solution to those tariffs.
At the end of the day, the U.S., which is worth $17 billion in grain and grain products, is by far our biggest trading partner, and China comes in at $9 billion. There is a pretty steep drop from number one to number two. We have to get our U.S. and North American markets right as well as our Chinese market.
Senator Ataullahjan: Thank you. My question is for Mr. Fulton.
I was adding the numbers — 85% of beef exports to the U.S. and 4% to Mexico. Have you looked at other markets, particularly the Middle East? Here, I want to mention, as a Muslim, I am constantly thinking about the halal meat market, where I feel Canada is missing. I know that New Zealand and Australia have pretty much covered the beef and lamb markets. Is that something you should be looking at? It is a huge market now.
Mr. Fulton: Absolutely. Thank you for the question.
Specifically on halal certification, we recently invited and had inspectors from Indonesia, which represents a market that is more than 300 million people and growing. With the new Comprehensive Economic Partnership Agreement, or CEPA, we think there are huge opportunities there.
We are always looking to diversify our markets. This is not a new goal or desire for our industry. The reality is the Americans tend to set the price in the high-quality grain-fed beef that we produce in Canada and in the United States. It commands the highest price largely in the U.S. We need to be prepared to pivot in the event that things go awry, and that’s why we are constantly trying to improve market access into countries like Indonesia.
With respect to your reference to the Middle East, we also think that longer term there are opportunities there. Processors have expressed some interest.
With respect to the previous question on China, I would reference that beef has actually had no access to China since 2021, and I think that reflects a relative reliability question as compared to some of our other key markets.
[Translation]
Senator Hébert: I will pick up on my colleague’s question because there’s a lot of talk about diversification. It is true that it’s necessary, and we’re seeing that in our relationship with the United States. What we’re experiencing now is likely to continue. We know that things won’t go back to the way they were before. This poses a challenge for our businesses in the agri-food sector, which need to diversify.
Mr. Larkin, you put it well: You already have a foothold on other continents around the world. One thing I’d like to know is, how realistic is it in the agri-food sector to say that we’re really going to diversify our exports, considering that we’re extremely focused on the United States? What do we actually need to do to achieve this?
[English]
Mr. Larkin: Thank you for the question. Let me go over the list of our top five markets: number one, the U.S., at $17 billion; number two, China, at $9 billion; number three, Japan, at about $2 billion; Mexico is number four at $1.6 billion; number five is Indonesia at about $1 billion. There is a pretty steep drop when you think about where the U.S. is and where the fifth market is.
With that said, market diversification is extremely important for the grain sector. The challenge, though, is that it’s something that takes a long time to get through.
The most recent trade agreement that Mr. Fulton referenced with Indonesia, that’s good news. It will take some time for it to be implemented, and it will take time for businesses to be able to take advantage of it, but it’s good news. It’s a big market, and there’s a huge opportunity there. There are also other large opportunities in the Indo-Pacific region as well. We have an office in Manila, Philippines, called the Indo-Pacific Agriculture and Agri-Food Office. Their job is market access and growing and opening up markets in the Indo-Pacific.
I always remind folks that the U.S. Department of Agriculture, or USDA, has had offices like that for decades in almost every country in the Indo-Pacific. We just have one office that we only started about five years ago in Manila, Philippines.
There is a lot more work for us to do, and we have a lot of global competitors, such as the Americans, the Australians, the Europeans and the Brazilians, who are out there every day competing for market access and market growth. We’re there as well. Could we do more? Absolutely. Is market diversification the silver bullet for the issues we have with the U.S. and China? Unfortunately not. Those markets will always be our largest markets just because of our close relationship with the U.S. and because of the size of the population in China.
Senator Hébert: I would like to hear from the two other witnesses on the second round, please.
Senator Al Zaibak: I’d be interested in the panel’s reaction to Budget 2025 and whether, from your various sectors’ perspectives, it has met your expectations, or if you have any remaining wishes, let me say.
Mr. Harvey: I will say, broadly, from the perspective of someone who is pushing for more agri-food exports, we’re happy to see the focus the government has on exports. That’s very positive.
The emphasis being placed on trade policy with the announcement on a strategic exports office — there are a number of details we still need to understand, but we found that a very interesting part. Although I don’t work on infrastructure directly, discussions of improving our trade infrastructure are, of course, very important for exports.
Mr. Larkin: There are three pieces I would outline, and some are repetitions of what Mr. Harvey has said.
First, there are serious funds, millions of dollars, for market access work, especially the work that the Canadian Food Inspection Agency, or CFIA, does on the international level. When we look at market access, regulatory alignment with different markets, even markets within CUSMA, the work that CFIA does is incredibly important. Extra funds towards that will not only help CFIA do the work they do on a larger scale but also allow our businesses to access more customers, meaning we improve economic growth here in Canada. That’s good news.
On the trade-enabling infrastructure piece, obviously, we need infrastructure to deliver these products around the globe. We have been calling for quite some time for the Port of Vancouver to be highlighted on the Prime Minister’s major projects list. It wasn’t on the first list. We hope it’s on the second list, which is supposed to come out before the Grey Cup.
In the budget, specifically, there was $5 billion allocated over seven years for trade-enabling infrastructure. Different ports around the country were mentioned, but, as you know around the table, $5 billion over seven years is a drop in the bucket when we think of infrastructure. It takes a considerable amount of money to build one road or one bridge nowadays.
It’s a start, in our opinion. There needs to be a lot more money there, and there needs to be a specific focus on the Port of Vancouver, which isn’t just Canada’s largest port, but it’s also Canada’s largest port for grain and grain products. Over 50% of the grain that we export internationally goes through the Port of Vancouver. There are serious infrastructure bottlenecks that need to be addressed there.
The final piece where we had a little concern was around the 15% cuts to Agriculture and Agri-Food Canada. They do very important work on research and development and public plant breeding that allows farmers to have the next best wheat or the next best barley, the next best plant variety. Without that work, they are not able to increase their yields or deal with different drought or pest conditions. The devil will be in the details of where those 15% cuts go, but we have said publicly that we hope they are not on research and development, because it’s incredibly important for us to increase yields in Canada so that we can meet rising food demand, both domestically and internationally.
Senator Ravalia: My question is for you, Mr. Harvey. Perhaps you could put on your previous diplomat hat for this answer.
Recognizing the excellent relationship that exists between your respective industries and partners in the U.S., the fly in the ointment, so to speak, remains the administration’s firm belief in tariffs and, I guess, the potential risk of an unsuccessful joint review of CUSMA. To what extent do you feel that your American partners are able to persuade key figures within the administration to maintain our current trade agreements?
Mr. Harvey: In the United States, the agri-food sector has a lot of weight, is one thing. The agri-food sector, from everything I’ve seen, overwhelmingly represents states that voted Republican. They’re an important part of the President’s coalition.
I’ve been told by many of them that when the President thinks about the USMCA, he’s overwhelmingly thinking about cars, steel and aluminum, and he’s not thinking about agriculture. We haven’t seen him mention Canadian agriculture much. He’s got a mercurial personality. Sometimes it is affected by the last person who has spoken to him, as we see sometimes in his negotiation style.
The agri-food sector is one that has supported him that does have weight in the coalition and that sometimes thinks they get taken for granted because they have supported him in a rock‑solid way, and they’re not swing votes — a couple of the states are. We think they’re an important part of the coalition that can play into the decision-making process, a decision-making process that isn’t always super transparent.
Mr. Fulton: I have some thoughts, thank you.
Our counterpart, the National Cattlemen’s Beef Association in the U.S., has had by many accounts exceptional access to the administration and were able to secure some provisions they had long sought with respect to tax planning and so on within the One Big Beautiful Bill Act in July.
It’s important to note the chaos that seems somewhat constant there has also resulted in a bit of a shift. The administration got more interested in importing Argentinian beef, and that has led to a shift in the ag influence, it would be fair to say.
The reality is the base remains largely a rural and agricultural one. Longer term, it’s our desire to stay aligned with our counterparts and work closely with them in order to assure the benefits of CUSMA are maintained and ensure we address any concerns our U.S. counterparts, or for that matter Mexican counterparts, may have.
Senator Woo: I want to pick up on the rock-and-hard-place question. It strikes me as not just a question of how we preserve our market access in the United States and China. Isn’t it also that the Americans may have an incentive for us to continue to face barriers in China, because they can displace some of our competing exports in China?
I note for example that Trump and Xi Jinping agreed to a resumption of soybean exports, 11 million metric tonnes this year and up to 25 million-26 million tonnes next year. Presumably, that displaces some of our exports. Is that true? Does it apply to other sectors as well?
Mr. Larkin: On your specific question about soybeans versus canola, I would wait for the folks at the Canola Council to respond to that. They would be the professionals in —
Senator Woo: It’s not soybeans versus canola. It’s that U.S. soybean exports displace our soybean exports.
Mr. Larkin: When it comes to oil seed exports, the United States’ main oil seed export is soybean.
Senator Woo: Yes.
Mr. Larkin: Our main oil seed export is canola. There is actual competition at the international level when you are looking for different types of oil seeds that can then be crushed and processed into different products.
To your question, there is always competition internationally. One point I would make is the North American marketplace is already so integrated that further integration allows us to be more competitive at the international level.
I understand we have these challenges with our American counterparts now, but there’s a great opportunity in Mexico for further growth on the agriculture and agri-food export side of things.
We can hopefully get past the situation we have with our American counterparts. At the end of the day, further integration between our industries in Canada, the U.S. and Mexico serves us better on the international stage because we have growing competitors. There are growing competitors in Brazil, Australia and Europe that we need to compete with more on the global stage. The competition isn’t decreasing, unfortunately; it’s increasing. However, if we can further integrate our North American supply chains, it allows us to compete better at that international level.
Senator Woo: Returning to canola and the barriers getting into China, I’m not sure where we are in the harvest season — probably near the end of it — have we missed a window to provide some of that current-year harvest into China if the tariff problem can’t be resolved quickly?
Mr. Larkin: I will give you a grain farmer’s perspective.
Senator Woo: Yes, I know it is oil seeds rather than —
Mr. Larkin: I will give you a grain farmer’s perspective, because it’s a great question. We had a delegation of 25 grain farmers in Ottawa two weeks ago. I can tell you the majority of them are keeping the majority of their grain, not just canola. Tariffs on canola and peas have an impact on all commodities: wheat, barley, pulses.
We have more recent tariffs on peas from India, our largest customer for yellow peas. All of these tariffs impact all commodities.
Of the 25 farmers I had here two weeks ago, almost all of them are keeping the majority of their grain within their bins. They are waiting for the price to increase. It’s a challenge for them because it’s a cash flow issue. Right now, they’re looking at purchasing fertilizer, pesticides and other inputs for the upcoming growing season coming into 2026. They can only hold on to their grain for so long until money and cash flow become an issue.
Time is short; I can say that. Right now, most of them are holding on to their grain hoping for a better day in the foreseeable future.
Senator Adler: Every morning, in the little mud hut I live in, in Manitoba, there’s a grain train less than half a football field away from my sleepy ears. I wake up to that pleasant sound every day. When I shop in Manitoba, like everyone else, it’s hard not to notice whatever is in the supermarket — the bags, the boxes, the bottles — most of it has a grain component and almost all of it is made in the U.S.A.
The question is this: Could we get the Canadian government, which likes to talk about productivity — all Canadian governments do — to do something to enhance value-added production and processing in this country so that what is on those grain trains, more of it might go to Canadian processors as opposed to the U.S.? I think you might agree that would help with our productivity situation. We talk about diversifying markets. One of the markets we keep talking about diversifying, too, is Canada.
I’ll start with you, Kyle Larkin, but I would invite everyone on the panel to join us. Is there anything the government is doing right now to impede value-added production?
Mr. Larkin: I’ll give you two answers to your question if I may, senator.
First, I will look at oats grown in Manitoba. There is a good story about oats grown in Manitoba. The U.S. imports oats. Ninety-nine percent of the oats they import come from Canada. The majority of that comes from Manitoba. Those oats go to about four or five states in the U.S., where they then get processed into value-added products, such as Cheerios. Then those Cheerios get re-exported up to Canada for families to enjoy across Canada. That’s a story I always tell to show the integrated supply chain between our two countries.
It is a question of economy, of demand and supply. That’s why you have some of those industries in the U.S. That’s my first answer to your question.
My second answer is there is an opportunity for internal domestic market diversification. You see it the most on the canola side. Over the past ten years, we’ve had significant growth in the amount of canola-crushing capacity coming online in Canada, which then has allowed for growth in the biofuel sector in Canada, which then allows us to create a circular economy where you have grain farmers growing canola; that canola gets crushed here in Canada; it gets processed into biofuels here in Canada. Then those biofuels are used in the combines or tractors that are then used in the planting and harvest processes.
There is a great story to tell there. There certainly is more work to do. Again, I would refer to my colleagues at the Canola Council of Canada who do a lot of work on biofuels. They certainly would be the experts in that area. There is a big opportunity there. Can the government do more? Absolutely.
Senator Adler: That is the question. What is it the government could do? I am looking to get behind the curtain of the “more.”
Mr. Fulton: I have something to add. In the recent budget that was tabled earlier this week, there were references to investment tax credits and super deductions.
I want to just draw the cattle perspective. We’re kind of unique in the ag industry right now in that we are exceptionally profitable. The cattle cycle is long, and it takes a long time for supply to respond to changes in demand. But as it happens, this is the time, really, where there’s potential for investments to be made that haven’t been made for 20 years — or more than 20 years — in the cattle industry. Incentives that encourage productivity improvements on the farm by allowing a 100% writeoff in the year of purchase, I think, are the right type of approach.
The Chair: Thank you, Mr. Fulton.
Just to note, colleagues, some of you may have met with the Canola Council of Canada representatives this week, so we learned a lot about biofuel and other aspects.
Senator Wilson: Thank you very much, Mr. Larkin, for your commercial about the Port of Vancouver and the need to invest in the Port of Vancouver. Given my history with the organization, it’s something that is near and dear to my heart. I know for a fact that there are many projects that were not moving forward because of lack of funding that could be advanced with a new envelope. Hopefully, all that we’re seeing right now with the budget is a pregnant pause before an announcement.
Speaking of ports, I want to go back and pull on the thread of diversification. I’m very hopeful that we will get an agreement with the United States and things will return to some level of normal, but I’m also very concerned that what we’ve seen in the United States with their political culture and what is happening — and it’s happening elsewhere in the world, but I’m particularly concerned about the United States, given our relationship — that even if we do get to a new state of normal, I feel a little bit like we’re Charlie Brown, and they’re Lucy with the football, and that we could find ourselves right back in the same place again.
Do you have any confidence that your industry is going to continue to focus on diversification, even if we do get a deal?
Mr. Larkin: Both are essential, and both are equally essential. We need a deal with the United States. Because of our north-south geography, they’re always going to be our largest market for grain and grain products. I don’t see a day anywhere in the near future where that’s not the case.
They’re a massive market, and our exports to the U.S. actually allow them to be more successful. We export around $17 billion of grain and grain products to the U.S., which allows them to export $17 billion worth of grain and grain products internationally to find the best price possible. Our exports there actually allow their grain farmers and the American grain sector to be more successful than it otherwise would be.
At the same time that we can focus there, market diversification will always be on the docket. We’re always going to have issues with the Americans, and we’re always going to have issues with the Chinese, and we may always have issues with our Indian counterparts as well. We have to look at fast‑growing regions, and that’s why the Indo-Pacific is top of mind, not just for Canada but for almost every country in the world. Some have geographical competitive advantages — think of Australia; that’s pretty much their backyard — but there is a lot more work that we need to do there in terms of seeking out market diversification.
As I said, the USDA has had offices in many of these countries for years. We’re just finally starting to get there, helping businesses sell more to places like Indonesia, Philippines, Vietnam, et cetera, but we need to do a lot more work there, and there’s a big opportunity. Again, those markets, despite some of their sizes, will never replace China or the U.S.
Senator Wilson: Mr. Fulton, I’m particularly interested in cattle. It seems to me that there are some very high-end markets internationally that we could be growing more, and I’m curious what is happening in that space.
Mr. Fulton: That’s the feedback. I’ve done a couple of trade missions, and, in particular, Singapore and Indonesia represent a huge opportunity in addition to our well-established Asian markets of Japan and South Korea.
Quite simply, the constraint is really how much we can produce. We’ve had factors that have contributed to a tighter supply, but quite simply, there are huge incentives for us to grow in the cattle sector, and if we assume that the market continues as it has, with our relationship with the U.S. and all other markets, if we’re able to grow our cattle herd, then we will be accessing those Asian markets in a bigger way.
But what is critical to know about the cattle sector is that there are hundreds of products that come from a beef animal, and they go to the market that pays the most for those products. It’s just absolutely critical to have access to as many different markets to optimize the value of the carcass.
The Chair: Thank you very much.
Senator Pupatello: That is a perfect segue, actually, to my question around the margin of the products in different markets. Understanding that we go to where the best price is and where our logistics are the easiest, how does government set a policy to ease the logistics to diversify markets that help maintain at least a decent margin on the sale? Just like our farmers are waiting for better prices and hoping that price will go up on these grains before they have to sell or that the beef is just as high a margin in these new markets as it is in America, how can the government participate in easing those costs, at least on the logistics front?
Mr. Harvey: It’s about infrastructure.
Mr. Larkin: Yes, I would say there are a lot of factors in the question that you just asked. There are market factors, obviously, but there are also growing factors and what final customers want to create, what kind of products they want to create.
Let me give you a few examples. In Morocco, they’re a big customer for durum wheat. They purchase a significant amount of durum wheat from Canada, and they mix it, blend it with other wheat from other places in the world that is not as high-quality as Canadian wheat. Canadian grain, in general, is known as being of some of the highest quality in the world, which also means it’s some of the most expensive.
But a country like Morocco, which doesn’t have a massive buying power, purchases a significant amount of durum wheat because they blend it with wheats from other countries, lower‑quality wheats, to create couscous. By just blending a small amount — 5%, 10% or 15% — they can elevate the final couscous that is delivered to grocery stores. It’s very much factors like that which drive a lot of the trade on the grain side.
What can the government do to grow that trade? Some of the work that the Canadian Food Inspection Agency does on market access but also dealing with non-tariff barriers is huge, making sure that our regulatory systems are aligned.
I’ll give you an example. We have a non-tariff barrier issue with Mexico, currently, where they fumigate grain products, such as wheat, that are being exported down to Mexico, despite fumigation not being required and despite our regulatory system having already signed off on everything. That creates inefficiencies, which then doesn’t allow us to grow that market further as it could be.
We’ve had issues like that in Vietnam, and we’ve had issues like that in other places in the world. The work the CFIA does is extremely important on growing that.
When things can become more efficient, not only on the trade‑enabling infrastructure side and delivering products but on non‑tariff barriers, it makes growing markets a lot easier.
Mr. Harvey: The government can do different things around political risk of other markets, but when we’re talking about diversification, I’m always nervous about the word, because, yes, we need to build up other markets, but we can’t diversify away from the United States. A Canada that doesn’t have the access to the United States that we have would be a lot smaller an economy and a much smaller sector.
We’re not there. We have a higher level of political risk with the United States right now, but the risk hasn’t been realized. We’re still selling into that market, which is the greatest market in the world, and we need to keep pushing to manage that relationship, which, obviously, is more complex than it has been at other times. But we’re not diversifying away from the United States. We’re trying to sell to other places at the same time as we sell to the United States.
The Chair: Thank you very much, senator. Sorry, we have gone over time there.
Senator Lewis: You just talked about non-tariff trade barriers, and as we look to diversify our trade in all commodities other than agriculture and so on, we see jurisdictions like Europe that are terribly concerned about Canadian energy and having access to our markets.
Perhaps everyone on the panel can talk about some of the non‑tariff barriers that we see in agriculture and continue to see in the European marketplace.
Mr. Fulton: This is a current issue that we take quite seriously. With the accession of the U.K. into the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, or CPTPP, we want to re-up our concerns with the current continuity agreement that the Government of Canada has with the U.K. Quite simply, we have two major non-tariff barriers relating to our beef in accessing that market. Those are a lack of recognition for our meat-hygiene system here in Canada, which is world-class, and the barrier of not permitting a growth-promotant product in the production of our beef which makes it, quite simply, far more productive and sustainable from an environmental standpoint.
Those are two perfect examples of barriers that do not have science supporting their establishment and that have eliminated any opportunity for Canadian beef to access that market. Our 2024 volumes to the U.K. were zero dollars.
Mr. Harvey: One thing that has been interesting in this field recently is the Canada-Indonesia agreement. It is the first time I’ve seen a connection between our development assistance and non-tariff barriers in agri-food. The idea in the agreement is for some of our development assistance to help build up the Indonesian inspection processes in a way that allows them to understand our systems well and, therefore, allow Canadian product in. For a committee like yours that studies treaties like this, I think it’s interesting and innovative, and it’s something we’ve been supportive of.
Senator Robinson: I’m hoping you could speak to the dispute-resolution mechanisms in CUSMA. Specifically, can they be improved, and do they need to be improved? If so, how would you suggest they be improved? What do you want our trade negotiators to keep in mind?
Mr. Harvey: I think the procedures in CUSMA are excellent. The problem is that they’re not implemented. Where we are right now is, basically, the agreements not being respected in a series of sectors. That isn’t the case with agri-food. There’s no real point in going to dispute settlement when you know the other party won’t implement if you win.
That said, when there are disputes under the dispute-settlement mechanism and when parties are willing to implement, then things can move forward better. There was the case of the Mexican ban on GMO corn where the dispute-settlement mechanism came to the decision that the Mexican decision wasn’t science-based, and Mexico has indicated a willingness to implement that. At other times, the dispute-settlement mechanism — well, the decision is made and no one wants to implement it.
But it’s not a question of improving the mechanism; it’s a question of political will to actually implement when a decision is made.
Senator Robinson: When our trade negotiators go to the table with that awareness, do you have any suggestions for them?
Mr. Harvey: I think it’s way above their pay grade, to be honest. At the end of the day, it is a decision for the leaders of the countries to take those decisions seriously and implement them. We’re obviously not there right now with the United States.
Mr. Fulton: I will direct the question to my colleague Dennis Laycraft if that’s possible.
Dennis Laycraft, Executive Vice President, Canadian Cattle Association: Thank you.
I agree with Mr. Harvey: The basic procedures are fine. It does come down to the willingness to actually abide by the rulings. There is evidence where they have been abided by, so it isn’t universal.
Many of the disputes that we find ourselves in actually still fall to the World Trade Organization, or WTO, and the mechanisms there. If you go to CPTPP, it tends to defer more to the principles of the WTO.
Where we do have issues right now, to be honest, we have not had those concerns with the United States. We have worked very effectively with our counterparts. We’ll give you a good example. We went through the mandatory country-of-origin-labelling dispute through the WTO. We eventually won that, and we worked closely with our U.S. counterparts. They actually repealed the legislation. There’s always a constant threat of it coming back, but that’s one clear example where they fully abided by it.
Again, when you build the right relationship between the two countries — and, in this case, an agreement between the three countries — there’s always a greater willingness to follow those decisions.
Senator Robinson: Thank you.
The Chair: We’re going to a modified second round, as I’d call it, with two senators wanting to ask questions. I am asking you to ask very precise questions back to back, and we’ll let our witnesses answer.
[Translation]
Senator Hébert: Mr. Harvey, I’d like to turn to you on the issue of diversification, since you mentioned it. Is it realistic? Where are the opportunities for Canada? For example, would they be more in processed or unprocessed foods?
[English]
Senator Al Zaibak: In line with earlier questions by my honourable colleagues, the Arab world represents an economic bloc of 450 million people. That is a great market for us. The Arab Gulf States’ economies are rapidly expanding and investing in logistics, infrastructure, agriculture and food-security partnerships.
Have we given any thought to developing a two-way partnership whereby they invest in our economy and our agribusiness and open up new markets for us?
The Chair: Those two questions are very related. Mr. Harvey, go ahead.
[Translation]
Mr. Harvey: First, we are not diversifying away from the United States; we are trying to continue selling to the United States and increasing our markets there while diversifying them. There are several very interesting regions. We have spent a lot of time in recent years talking about the Indo-Pacific, the growing middle class and people who have more and more money to buy cheaper, higher-quality products. This is often the case with our products, which are of better quality than other similar products on the market.
[English]
It would be a similar answer for the Middle East. I saw you at the event the other night for the Minister of Investment from Saudi Arabia. I wasn’t able to stay. We’re often looking at the United Arab Emirates as a place to sell into, and then that covers the region. There’s obviously a lot going on there. It’s competitive; a lot of people are trying to sell there, but it is a region where there’s an awful lot of opportunities.
They’re not here today, but I was speaking to a colleague from Cereals Canada before going to the Saudi reception so that I would have a few more things to say, to be honest. He explained to me that they see opportunities in Saudi Arabia in that there has been an opening of their distribution systems that have traditionally been state-controlled. Now they’ve got newer, more open distribution systems that are interested in that higher‑quality Canadian wheat, so there might be opportunities there. It’s around $6 million a year right now, he told me, but it’s definitely an area for growth. The Middle East, in general, is an area with an increasing population.
There are opportunities there, yes, but that is to diversify in the sense of creating new markets, not in the sense of diversifying away from the U.S. The United States is a whole different level.
The Chair: Thank you very much. We’ve come to the end of our time for this panel, so on behalf of the committee, I’d like to thank our witnesses — Michael Harvey, Tyler Fulton, Dennis Laycraft and Kyle Larkin — for their contributions today in emphasizing the importance of the agri-food sector in Canada in the context of our North American trading relationship. Big issues, a lot more to come, and we look forward to hearing from you again at a future date. On behalf of the committee, thank you very much.
Colleagues, we are adjourned, but I would ask the members of the steering committee to stay behind, please.
(The committee adjourned.)