Industry groups urged Canadian and U.S. officials to get back to the negotiating table on trade, warning a House of Commons committee that prolonged uncertainty may have irreversible consequences for economic growth. “The Canada-U.S. economic relationship is not simply trade across a border. In many sectors, it’s a production system built across that border,” said Flavio Volpe , president of the Automotive Parts Manufacturers’ Association, told the foreign affairs committee meeting late Wednesday afternoon. “The assumptions that governed this relationship for decades are being tested.” Wednesday’s meeting was the first discussion on Canada-U.S. bilateral trade relations at the committee level after talks fell apart at the eleventh hour in late August, which led to the implementation of Section 338 tariffs by the United States. At the time, Prime Minister Mark Carney said U.S. demands “revealed the limits of their commitment to a true economic partnership.” U.S. President Donald Trump announced earlier this year that he would not be renewing the Canada-U.S. Mexico Agreement (CUSMA), triggering at least 10 years of ongoing annual reviews. Goldy Hyder, president and CEO of the Business Council of Canada , said business leaders have hesitated to deploy capital and move forward with large projects because of the lack of certainty around the trade negotiations. He said Canada needs to strengthen its relationships with the U.S. and Mexico and work constructively towards a renewed CUSMA, while also making it easier to invest, hire and grow businesses domestically. “What is much harder to manage is the uncertainty about the rules under which (businesses) will be making billions of dollars of investment decisions for five, 10 and 20 years from now or more,” Hyder said. “From the perspective of Canadian business, the objective should be clear: preserve and strengthen the predictable rules-based economic relationship that has served all three countries well. A renewed agreement would provide something investors desperately need: confidence.” Volpe told MPs that automotive manufacturers have found the tariffs tough to navigate and highlighted that tariffs will raise costs for both countries. He urged the Canadian government to preserve productive capacity, investment and skilled employment, while also prioritizing domestic production that align with market demands. “Diversification should not mean disengagement from the United States. We should build more with the rest of the world without pretending that we can or should build less with our largest customer and closest industrial partner,” he said. “We should approach the U.S. neither anxiously nor angrily, but confidently. What we make is for sale. Who we are is not.” Beth Burke, chief executive office of the Canadian American Business Council, said the lack of a trade deal raises the risks that business investment will be curtailed in ways that would be difficult to reverse. It could also damage the Canadian economy and workforce, she said. According to an Oxford Economics study commissioned by the CABC, a successful trade deal could add $253 billion to Canada’s gross domestic product over the next decade, while a breakdown could cost around $271 billion. For the Canadian workforce, a successful deal could add around 98,000 jobs while a breakdown would result in around 100,000 jobs lost. “One thing that can get lost in these numbers is that when you impose costs at the border, they rarely stop there,” Burke said. “I hope both sides can get back to the table. Both governments need to return to negotiations with the goal of a deal that restores predictability for both economies,” Burke said. All three representatives said they are hopeful that a trade deal will be negotiated eventually. Canada-U.S. Trade Minister Dominic Leblanc and U.S. Trade Representative Jamieson Greer have indicated that informal talks have been ongoing, but formal negotiations are still stalled. Ford CEO on CUSMA trade deal stakes: ‘This has to work’Can Trump dump CUSMA? Yes he can, says trade lawyer Canadian companies have also started to adapt to the tariffs, but that cannot be sustained forever, they said. “Business relationships aren’t built on a political moment. Companies have deep, long-standing ties with suppliers and customers across the border, and those relationships are holding. We are relying on them, but they cannot carry the load forever,” Burke noted.
Business groups warn of irreversible economic consequences if trade deal remains in limbo
