Question Period Note: CANADA-U.S. AGRICULTURE RELATIONS

Q1 – What is the Government of Canada doing to protect the agriculture sector? Q2 – How is the Government of Canada preparing for potential tariff increases on agriculture exports to our largest trading partner? Q3 – How is the Government of Canada ensuring that Canadian agriculture stakeholders will be protected during the 2026 CUSMA review?

R.1 - There is no more important economic relationship than Canada's with the United States.

As announced by the Prime Minister in January, the Government has deployed a Team Canada approach in the U.S. to highlight the importance of our deep connections and of our integrated supply chains.

To reinforce that Canada is a reliable and indispensable agricultural trading partner to the U.S., I led missions to Washington, D.C., Boston, Iowa and Minnesota to meet with my counterparts in the regions and other government officials.

The U.S. agriculture community is dispersed across the entire country and is politically influential. We have excellent and well-established relationships between government and industry and industry-to-industry which will be valuable going forward. R.2- An across-the-board tariff on Canadian products would be harmful to American consumers, workers, and the American economy.

We are deeply integrated economies with tens of thousands of jobs on both sides of the border that depend on the fair and balanced Canada-U.S. trade relationship.

The Government is engaging with the incoming U.S. administration to communicate these points and signal our readiness to work together to advance our shared economic prosperity and security.

We will always defend Canada’s interests and do what is best for Canadians and the Canadian economy. R.3 - The Government is closely monitoring the political landscape, keeping track of emerging agricultural trade issues, and gathering views and experiences from stakeholders on key areas in CUSMA that are working well and potential areas for improvement.

Part of that work is advocating in the U.S. about Canada’s significant contributions to local economies in all parts of the U.S.

The Government of Canada stood with Canadian stakeholders and farmers during the CUSMA negotiations, and we will always stand shoulder-to-shoulder with them.

Agriculture Trading Relationship

The United States (U.S.) is Canada’s largest agriculture and seafood export market. Canada exported CA$59.5 billion to the U.S., while importing CA$37.5 billion from the U.S. in 2023. Canada’s largest exports included bakery products, canola oil and beef. The U.S. is also Canada’s largest fish and seafood export market, valued at CA$4.9 billion in 2023. Canada’s largest sector imports from the U.S. were undenatured ethyl alcohol with alcohol content higher than 80% (e.g., ethyl alcohol for fuel), various food preparations and bakery products. Canada is an important and mutually beneficial partner for agriculture and food trade for the U.S., as Canada is the 2nd largest export market for the U.S. as well as 2nd largest import origin, accounting for one-fifth of the U.S.’s import needs.

Canada is the top agricultural export market for 27 U.S. states, including all border states (except Washington) as well as high population states such as California and New York. Examples of states on this list that supported President Trump in the 2024 election include Montana, Idaho, Wyoming, Ohio, Kentucky and many of the "swing states” including Arizona, Wisconsin, Michigan, Pennsylvania, and North Carolina.

The agricultural trade balance in favour of Canada has increased significantly since 2019, when it was around CAD $3.5 billion at the time as opposed to CAD $22 billion today. While the rise observed in the Canada-U.S. agricultural trade balance can be attributed to a multitude of factors, the growth was largely driven by the increased value of U.S. imports from Canada rather than by increased volumes. Between 2019 and 2023, U.S. imports from Canada increased by 21% in volume (kg) but by 65% in value (USD).

Canada-United States-Mexico Agreement (CUSMA) review

CUSMA includes a commitment to undertake a joint review of the Agreement after six years (2026).  CUSMA also mandates a review of certain Canada-U.S. dairy-related provisions, set out in Chapter 3, in July 2025, and every two years thereafter. In preparation for the upcoming CUSMA and dairy reviews, the Department has begun analysis and engagement with other government departments, Canadian industry, and other stakeholders to prepare for a range of scenarios.

Canada’s priority will be to ensure that market access and the other benefits of the Agreement are preserved in any discussions with the U.S. and Mexico. A Gazette public consultation process was completed by Global Affairs Canada in the fall to gather views from stakeholder priorities and concerns as Canada prepares for these discussions.

Potential tariffs on all U.S. imports

According to the Republican electoral platform, the new Trump Administration plans to impose significant tariffs, including a 10-20% tariff on all U.S. imports and a 60% tariff on imports from China. These tariffs would be in addition to those implemented during the previous Trump Administration, which have continued under the current Biden Administration. The proposed tariffs are unprecedented in scope and scale, with broad implications for global trade and Canada’s trade relationship with the U.S.

Canada and the United States have a long-standing and strong trading relationship in agriculture – one that benefits both of our countries.

Last year, Canada exported almost $60 billion in agriculture and seafood products to the U.S.

Canada imported almost $38B from the U.S. (2023) and is the number one agriculture export market for 27 states.

Our supply chains are deeply integrated, allowing us to supply safe and affordable food year-round.

Canada is committed to working with the incoming Administration to further deepen the strong ties between our two countries.

The Government of Canada will continue to defend Canadian farmers against trade distorting measures that could be introduced in the U.S.