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?

R1 -
• The Government of Canada has put in place financing and advisory assistance through financial Crown corporations for businesses, along with support for affected workers.
• 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 September 5, 2025, the Government of Canada announced that the Advance Payments Program (APP) interest-free limit for canola would be $500,000instead of $100,000 for the 2025 and the 2026 program years. Additionally, it was announced on April 1, 2026, that the Government of Canada was temporarily increasing the interest-free portion for all non-canola advances to $250,000 for the 2026 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.
R2 -
• We have excellent and well-established relationships between government and industry and industry-to-industry which benefits our connected supply chains.
• We remain prepared to engage with the United States and Mexico to advance our shared economic prosperity and security in North America and we continue to prepare for a range of potential scenarios for the review.
• Our priority in discussions with the United States and Mexico will be to ensure that market access and the other benefits of the Agreement and preserved, bringing back stability and certainty to trade within North America, and to keep the review as narrow and targeted as possible.
• The Government prioritizes broad consultations with Canadians and meaningful engagement with key partners to inform its trade policy. While the formal consultation period has ended, our preparations for the joint review of the Canada-United States-Mexico Agreement continue and regular engagement with partners and stakeholders is central to informing our approach.
• 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.
• During the February 20th bilateral meeting with the U.S. Secretary of Agriculture, Brooke Rollins, we discussed the importance of agriculture, the integrated nature of our agriculture sectors, and ongoing trade issues. We look forward to having follow-up discussions on specific issues.
R3 -
· In Fall 2025, the Prime Minister launched Canada’s Trade Diversification Strategy, settling an ambitious goal to double non-U.S. exports over the next decade.
· AAFC has a number of programs and services to help unlock new opportunities for Canadian exporters, including engaging in multiple concurrent trade negotiations, resolving market access issues, showcasing Canadian products on the global stage, and offering export-readiness services, among others.
· This includes our AAFC experts that are embedded in key missions around the world, including the 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.
· As part of the Sustainable Canadian Agricultural Partnership, AAFC has set aside $1.75 million in dedicated funding through the In-Market Partnership Fund to support agriculture, agri-food and seafood market development and branding activities in priority international markets. Supported activities include B2B programming, market readiness activities and promotional campaigns to help Canadian exporters achieve success in key markets.
· Diversification means helping our farmers and processors reach new markets and build resilience. Through AAFC’s Comprehensive Strategic Partnership with Mexico, we have advanced agricultural trade, regulatory cooperation, and market access. I have personally engaged Mexican counterparts and importers to help Canadian agriculture diversify exports and strengthen commercial ties.
· We are working hard to promote the Canada Brand around the world and to strengthen Canada’s reputation as a reliable supplier of a diverse range of quality, sustainable, and innovative products. In the United States, this includes our recent support towards a strong Canadian presence at key food and beverage trade shows such as Natural Products Expo West and the Seafood Expo of North America, that both took place in March 2026. In 2026-27, AAFC will be supporting U.S. events such as the Americas Food and Beverage Show in Miami and the Private Label Manufacturer’s Association Trade Show in Chicago.
· The Government recently launched the five-year, $75 million, AgriMarketing: Market Diversification program to help both national industry associations and small- and medium-sized enterprises address emerging market disruptions and diversify outside of traditional markets.
· The Government of Canada also recently concluded free trade agreement negotiations with Indonesia and Ecuador and is actively negotiating a free trade agreement with the Association of Southeast Asian Nations, as well as Costa Rica’s accession to the Comprehensive Progressive Trans-Pacific Partnership, and has started exploratory talks towards a potential free trade agreement with the Philippines.
R4 -
· 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.
R5 -
· 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.
· While the formal consultation period has ended, our preparations for the CUSMA joint review continue, and regular engagement with partners and stakeholders is central to informing our approach.
R6 -
• Canada’s supply management system provides stable, fair and predictable prices for farmers and ensures a stable supply of high-quality products for Canadians.
• Canada will defend, protect, and maintain its supply management system.
• The U.S. already benefits from significant market access into Canada under CUSMA.
• Canada’s approach on supply management in international trade has not impacted our ability to negotiate ambitious agreements.
R7 -
• The Department is closely tracking U.S. concerns in the agriculture space, many of which are outlined in the recently released 2026 National Trade Estimate Report.
• 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.
R8 -
• The vast majority of Canadian agriculture exports comply with CUSMA Rules of Origin requirements and are not affected by the new global tariff of 10%.
• 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.

Agriculture Trading Relationship
The U.S. is Canada’s most important market for agri-food and seafood products. In 2025:
• Canadian exports were valued at CAD 61.4 billion (60.6% of Canada’s global exports for these products).
• The U.S. is also Canada’s largest fish and seafood export market, valued at CAD 6.0 billion in 2025.
• Canada’s largest exports to the U.S. included bread, pastries, and bakery products, chocolate preparations, and canola oil.
• Canada imported CAD 38.8 billion in U.S. agri-food and seafood products.
• Canada’s largest agri-food and seafood sector imports from the U.S. were food preparations, denatured ethyl alcohol, bread, pastries, and bakery products, and pet food.

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 source, accounting for nearly one-fifth of the U.S.’s agri-food and seafood import needs.

Canada is the top agri-food and seafood export market for 28 U.S. states, including all border states (except Washington and Minnesota) as well as high population states such as California, Florida, New York, and Pennsylvania.

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). United States Trade Representative (USTR) concerns regarding Canadian dairy also centre around milk pricing and dairy exports, as outlined in the USTR’s 2026 National Trade Estimates (NTE) Report. CUSMA provides significant gains for American dairy, with U.S. dairy exports now worth over US$ 1.18 million in 2025.

Canada-United States-Mexico Agreement (CUSMA) review
The CUSMA is subject to review in July 2026. During any of the reviews, the Parties can decide by consensus on any appropriate actions based on recommendations from a Party (that may or may not include amendments to the Agreement), and on whether to extend CUSMA’s term for another 16 years. Should there be no consensus to extend CUSMA’s term in 2026, joint reviews would be held annually until the Parties agree to an extension, or the Agreement expires in 2036. Beyond the above timelines, there is no further guidance in CUSMA’s review article regarding either the modalities or scope of the exercise, and these are to be trilaterally determined by the Parties.
On September 17, 2025, both the U.S. and Mexico launched public consultations ahead of the 2026 CUSMA review. The U.S. comment period was open until November 3, 2025, while Mexico’s was open until November 16, 2025. The U.S held a public hearing over three days, December 3-5, 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. A verbal update was provided to this effect to the United States House Ways and Means and Senate Finance Committee on December 16 and 17, 2025. In this update, a number of issues with Canada were listed, including market access for U.S. dairy products into Canada and Canada’s exports of certain dairy products.
Global Affairs Canada undertook a second round of public consultations through the Canada Gazette (September 20 to November 3, 2025), with a view to fine tuning its preparations for the review.
The Canada Gazette consultations generated approximately 5,000 submissions. [600 unique submissions and 4,500 more through a letter writing campaign].
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
• On Friday, February 20, 2026, President Trump rescinded all Executive Orders imposing tariffs under the International Emergency Economic Powers Act (IEEPA) and replaced them with a global 10% tariff under Section 122 of the Trade Act of 1974.

• The Section 122, tariffs came into effect on February 24, 2026. Those tariffs will be in place for 150 days, until July 24, 2026, unless expressly suspended, modified, or terminated on an earlier date, or extended by an Act of Congress.

• The Proclamation maintains the carve-out for CUSMA-compliant goods. CUSMA non-compliant goods will now be subject to the 10% Section 122 tariff rather than the 35% IEEPA tariff.

• Additionally, some CUSMA non-compliant goods like coffee, cocoa butter, and cocoa paste are explicitly exempted from the 10% tariff.

• The President noted that he would be increasing the global tariff to 15%; however, a further Proclamation would be necessary for this increase, and it could put at risk some trade deals the United States has made with other countries at agreed-upon tariff lower than 15%, such as the United Kingdom and the European Union. It is therefore unclear at this time if he will follow-through with this increase.

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

• Our supply chains and food processing sectors 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.

• Two-way agri-food and seafood trade between Canada and the US in 2025 was valued at CAD 100.2 billion, with Canada exporting approximately $61.4 billion and importing $38.8 billion. That figure represents 60.6% of Canada’s agrifood and seafood exports to the world, and Canada is the number one agri-food and seafood export market for 28 states.

• Canada remains committed to constructive engagement with the United States.

• The Government of Canada will continue consultations and engagement with provincial and territorial governments, stakeholders, Indigenous rightsholders, and Canadians on Canada's interests and priorities.