Canadian Business Leaders Warn of Irreversible Economic Damage as U.S. Trade Talks Stall
Industry representatives told a House of Commons committee that prolonged uncertainty in Canada-U.S. trade relations risks irreversible economic consequences, citing potential GDP losses of $271 billion and 100,000 job cuts if a deal is not reached.
Canadian business leaders warned a House of Commons foreign affairs committee late Wednesday afternoon that prolonged uncertainty surrounding Canada-U.S. trade relations could inflict irreversible damage on the country’s economic growth. The warning follows the collapse of bilateral trade talks in late August, which led to the implementation of Section 338 tariffs by the United States.
Prime Minister Mark Carney stated after the talks collapsed that U.S. demands revealed the limits of their commitment to a true economic partnership. Compounding the uncertainty, U.S. President Donald Trump announced he would not renew the Canada-U.S. Mexico Agreement (CUSMA), triggering at least 10 years of ongoing annual reviews.
Industry representatives urged officials to return to negotiations to restore predictability for investment. Goldy Hyder, president and CEO of the Business Council of Canada, said business leaders are hesitating to deploy capital due to the lack of certainty around trade negotiations. Beth Burke, chief executive officer of the Canadian American Business Council, stated that the absence of a trade deal raises risks that business investment will be curtailed in ways difficult to reverse.
Flavio Volpe, president of the Automotive Parts Manufacturers’ Association, noted that automotive manufacturers find the tariffs tough to navigate and that they raise costs for both countries.
An Oxford Economics study commissioned by the CABC quantified the stakes over the next decade. It found that a successful trade deal could add $253 billion to Canada’s GDP and create around 98,000 jobs. Conversely, a breakdown could cost approximately $271 billion in GDP and result in around 100,000 jobs lost.
While formal negotiations remain stalled, Canada-U.S. Trade Minister Dominic Leblanc and U.S. Trade Representative Jamieson Greer have indicated that informal talks are continuing.