Question Period Note: CANADA-UNITED STATES (U.S.) AGRICULTURE RELATIONS AND CUSMA REVIEW

Q1 – What is the Government of Canada doing to support the agriculture sector? Q2 – How is AAFC engaging with the agriculture sector and decision-makers in the United States? Q3 – What is AAFC doing to support diversification efforts for agriculture and agri-food products? Q4 – What is the Government doing to promote Canadian agriculture and food products in Canada? Q5 – What is the status of the 2026 Canada-United States-Mexico Agreement (CUSMA) review? Q6 – What will be Canada’s approach on dairy with the U.S.? Q7 – What are the key trade irritants with the U.S.? Q8 – Has the agriculture sector been able to comply with CUSMA?

R.1 - • The Government of Canada has put in place financing and advisory assistance through financial Crown corporations for businesses, along with support for affected workers.
• The agriculture sector can continue to benefit from the temporary 6-month relief for goods imported from the U.S. that are used in Canadian manufacturing until October 16, as well as the broader remission framework.
• These measures build on existing supports for Canadian agriculture businesses, including the Advance Payments Program, AgriStability and AgriInvest, that offer short-term support to address market related impacts on producers.
• On March 7, 2025, the Government of Canada announced that the Advance Payments Program (APP) interest-free limit will be set at $250,000 instead of $100,000 for the 2025 program year.
• Proposed additional support through AgriStability was also announced on March 22 to increase the compensation rate from 80% to 90% and doubling the current payment cap to $6 million for the 2025 program year.
• In July 2025, federal-provincial-territorial agriculture ministers agreed to implement these temporary enhancements. Further measures were announced in September 2025, including an additional $75 million for AgriMarketing.
• We are working to help the agricultural sector weather this storm and be even more resilient on the other side. R.2 - • There is no more important economic relationship than that of Canada's with the United States.
• We have excellent and well-established relationships between government and industry and industry-to-industry which benefits our connected supply chains.
• The Department is also tracking written submissions as part of the U.S. public consultations ahead of the 2026 CUSMA review.
• We are committed to working with the U.S. Administration to demonstrate the mutual benefits of our current agricultural trade relationship, including highly integrated supply chains.
• The Minister spoke with the U.S. Secretary of Agriculture, Brooke Rollins, on September 5 where they discussed the importance of agriculture, the integrated nature of our agriculture sectors, and ongoing trade issues.
• We We look forward to having follow-up discussions in the near term to discuss specific issues. R.3 - · We have a number of programs and services to help Canadian companies showcase their products on the global stage and facilitate exports to priority markets.
· This includes our Indo-Pacific Agriculture and Agri-Food Office, which is focused on positioning Canada as a trading partner of choice in the fastest-growing economic region in the world.
· I recently led a trade mission to Indonesia, Singapore and the Philippines to advance market access priorities, promote Canadian agricultural products and explore new market opportunities.
· We are working hard to promote the Canada Brand around the world - strengthening Canada’s reputation as a reliable supplier of a diverse range of quality, sustainable, and innovative products.
· The Government is injecting an additional $75 million over five years, beginning in 2026-27, into Agriculture and Agri-Food Canada’s AgriMarketing Program, to diversify exports and support sectors most affected by trade barriers.
· Canada recently concluded free trade agreement negotiations with Indonesia and Ecuador, is actively negotiating a free trade agreement with the Association of Southeast Asian Nations (ASEAN), as well as Costa Rica’s accession to the Comprehensive Progressive Trans- Pacific Partnership (CPTPP), and has started exploratory talks towards a potential free trade agreement with the Philippines. R.4 - · The Government of Canada is working with provinces, territories, and industry associations to promote clear and transparent product labelling to help consumers be more confident in identifying Canadian products.
· The Government of Canada is reminding the food industry and importers of their responsibility to ensure that their labels are accurate and not misleading consumers in Canada. Accurate labelling creates a fair marketplace that benefits both consumers and businesses.
· The Canadian Food Inspection Agency (CFIA) created a web page on how to identify Canadian food with a quick reference guide about the different words or symbols they may find while grocery shopping – some mean the food has Canadian content, while others mean it meets a Canadian standard for quality, or organic content. R.5 - · We remain prepared to engage with U.S. officials to advance our shared economic prosperity and security in North America. We will always defend Canada’s interests and what is best for Canadians.
· CUSMA is a successful trilateral agreement that strengthens the whole North American region. It is in our common interest to ensure it continues to support our shared prosperity.
· On September 17, 2025, both the U.S. and Mexico launched public consultations ahead of the 2026 CUSMA review. On September 20, 2025, the Government of Canada also launched a new round of public consultations on the CUSMA review via the Canada Gazette.
· Industry is encouraged to submit comments as part of the consultation processes. R.6 - • Canada will defend, protect, and maintain its supply management system.
• The U.S. already benefits from significant market access into Canada under CUSMA.
• Our government has been very clear that supply management is off the table.
• Canada’s approach on supply management in international trade has not impacted our ability to negotiate ambitious agreements. R.7 - • The Department is closely tracking U.S. concerns in the agriculture space, many of which are outlined in the 2025 National Trade Estimate Report.
• Like any trade relationship, there are issues where both sides may not see eye-to-eye .
• These are longstanding issues that are consistently raised by U.S. agriculture stakeholders (e.g., supply management, sale of wine, beer and spirits by provincial liquor boards, certain SPS measures).
• The Department will continue to consult with provinces and territories, as well as Canadian agriculture stakeholders, to prepare for in any engagement with the U.S.
• In parallel, we are closely monitoring recent U.S. trade deals with other partners to understand current U.S. priorities related to agriculture, and any potential implications for Canadian interests. R.8 - • The vast majority of Canadian agriculture exports comply with CUSMA Rules of Origin requirements and are not affected by the increase of the IEEPA tariffs to 35%.
• AAFC has been and will continue to engage with stakeholders to hear about their experiences and challenges to comply with CUSMA. To date, AAFC has heard minimal concerns from agriculture stakeholders with regard to meeting CUSMA compliance requirements.
• For example, a limited amount of further processed exports, such as roasted coffee and herbal teas, are unable to meet the rules of origin requirements as their inputs are not sourced in North America.

Agriculture Trading Relationship
The U.S. is Canada’s most important market for agri-food and seafood products, with Canadian exports valued at nearly CAD C$56.6 billion in 2024, representing 61.4% of Canada’s global exports for these products. During the same period, Canada imported CAD $38.2 billion in U.S. agri-food and seafood products. Canada’s largest exports to the U.S. included bread, pastries, and bakery products, canola oil, and chocolate preparations. The U.S. is also Canada’s largest fish and seafood export market, valued at CA$5.5 billion in 2024. Canada’s largest agri-food and seafood sector imports from the U.S. were food preparations, bread, pastries, and bakery products, and animal feed preparations. Canada is an important and mutually beneficial partner for agri-food and seafood 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 nearly one-fifth of the U.S.’s import needs.

Canada is the top agri-food and seafood export market for 27 U.S. states, including all border states (except Washington and Minnesota) as well as high population states such as California and New York.

Dairy issues have long-been prominent in the Canada-U.S. trade relationship, with Canada facing significant scrutiny from its trading partner. For example, the U.S. remains concerned with Canadian implementation of its market access obligations under the CUSMA (i.e., TRQ administration as evidenced by two CUSMA disputes – see separate QP card). CUSMA provides significant gains for American dairy, with U.S. dairy exports now worth over US$ 1.18 million in 2024.

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 includes a review of certain Canada-U.S. dairy-related provisions, set out in Chapter 3, in 2025, and every two years thereafter. The Department continues to undertake its analysis and engagement with other government departments, Canadian industry, and other stakeholders to prepare for a range of scenarios.
Following the President’s inauguration on January 20, 2025, a Presidential Memorandum (“America First Trade Policy”) was issued to address unfair and unbalanced trade. Of relevance to CUSMA, it ordered U.S. officials to: 1) start the public consultation process for the July 2026 CUSMA review; 2) assess the impact of the agreement on U.S. stakeholders; 3) make recommendations on U.S. participation in the Agreement, and 4) report to appropriate congressional committees.
On September 17, 2025, both the U.S. and Mexico launched public consultations ahead of the 2026 CUSMA review. The U.S. comment period is open until November 3, 2025, while Mexico’s is open until November 16, 2025. The U.S. will also hold a public hearing on November 17, 2025, and is required to report to relevant congressional committees on the recommendations for actions and whether to extend the term of the Agreement no later than January 2, 2026.
On September 20, 2025, the Government of Canada also launched a new round of public consultations on the CUSMA review via the Canada Gazette. The comment period is open until November 3, 2025. This is the second round of public consultation via the Canada Gazette, following the first round which took place in the Fall of 2024.
The Department continues to undertake its analysis and engagement with other government departments, the provinces and territories, and agriculture stakeholders to prepare for a range of scenarios.
Tariffs on U.S. imports
Since March 4, 2025, the U.S. has announced three types of tariffs against its trading partners: tariffs linked to border and fentanyl issues applied specifically to Canada and Mexico; sectoral tariffs; and reciprocal tariffs against a large list of countries to address perceived trade imbalances.
The Canadian agriculture and agri-food sector is directly and indirectly impacted by the border/fentanyl tariffs and sectoral tariffs, specifically:
• 35% tariffs (an increase from 25% as of August 1, 2025) applied to all goods that are not CUSMA compliant, and a 10% tariff applied to all energy and non-originating potash using the President’s authorities under the International Emergency Economic Powers Act (IEEPA). In addition, Canadian goods transshipped through other countries to evade the tariff will be subject to a transshipment tariff of 40%.
• 50% tariffs applied to all steel and aluminum (raised from 25% on June 4, 2025), as well as 50% on all imports of semi-finished copper products and intensive copper derivative products under the authorities of Section 232 of the U.S. Trade Expansion Act of 1962.
• Other recent non-agricultural products announced under Section 232 tariffs on imports include some industrial goods such as imports of timber, lumber, and their derivative products, with tariffs on pharmaceuticals and trucks to potentially follow.
As of March 7, 2025, U.S. IEEPA (i.e., border and fentanyl) tariffs have been paused for goods imported from Canada that qualify for duty-free preferential treatment under the Canada-United States-Mexico Agreement (CUSMA). For the vast majority of goods (over 98% of tariff lines (96% for agriculture) and over 99.9% of bilateral trade between Canada and the U.S.), traders can claim preference under the CUSMA if they meet the Agreement’s rules of origin.
On May 28, 2025, the U.S Court of International Trade (CIT) ruled that the tariffs applied by the United States under the IEEPA are invalid. Following an appeal from the Justice Department, the U.S. Court of Appeals granted a temporary stay of the ruling on May 29, which keeps IEEPA tariffs in place as it considers the merits of the appeal. The hearing for the U.S. Government’s appeal of the CIT’s May 28 decision invalidating the IEEPA reciprocal and fentanyl tariffs took place on July 31, 2025. The U.S. Supreme Court granted the Department of Justice’s motion to expedite the case, with oral arguments scheduled for the first week of November, of which the results would have an impact on the current IEEPA tariffs applied against Canada.
Canada’s Response to U.S. Tariffs
Canada imposed reciprocal tariffs of 25% against C$30 billion in imports of goods from the U.S., targeting products such as orange juice, peanut butter, wine spirits, beer, and coffee, effective since March 4, 2025, On March 13, 2025, in response to the U.S. steel and aluminum tariffs, Canada imposed a 25% reciprocal tariff on a list of products totaling $29.8 billion including steel products, aluminum products, and additional imported goods.

On August 22, 2025, Prime Minister Carney announced changes to Canada’s retaliatory tariffs, effectively repealing the initial CAD $30 billion IEEPA response, which included a 25% tariff on canola seed imported from the United States, as well as the non-steel and aluminum products included the CAD $29.8 billion response to U.S. tariffs on steel and aluminum (to be confirmed once details are published). This change is in effect since September 1, 2025.

• 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 $62.0 billion in agri-food and seafood products to the U.S. – accounting for 61.8% of Canada’s agriculture exports to the world.

• Canada imported almost $39.6 billion of agri-food and seafood products from the U.S. in 2024, and is the number one agri-food and seafood export market for 27 states.

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

• Canada will continue to defend the interests of Canadian farmers and businesses and do what is best for Canadians and the Canadian economy.

• Canada is engaged in ongoing negotiations with the United States to address the unjustified tariffs and will take the time to negotiate a good deal for Canada.

• On September 20, 2025, our government launched a second round of public consultations on the CUSMA joint review. We want to make sure that this agreement continues to deliver real benefits for Canadians, including our farmers.