Dear Minister Hajdu:
Thank you for the opportunity to provide local input on the Canada-U.S. trade relationship and the upcoming CUSMA review.
We strongly support the strategic priorities identified by the Canadian Chamber of Commerce:
- Prioritize the continuity of the Agreement and its existing key provisions
- Implement targeted measures to strengthen the Agreement and enhance North American economic security
- Strengthen North American economic integration by reducing or eliminating recently imposed tariffs within North America.
In discussions with local businesses, we offer the following details of areas for improvement:
CFIA / FDA / Health Canada Administrative Alignment
As highlighted by the Canadian Chamber of Commerce, prioritizing North American regulatory alignment would strengthen the current Agreement. One area requiring further attention relates to food safety standards. While the underlying food safety standards between Canada and the US are generally well aligned, the administrative and compliance systems are not. For SMEs, this creates duplicated paperwork, registrations, compliance processes, and uncertainty.
Example: When sending food or beverage products to the U.S., a local business must hold a CFIA licence in Canada (annual fees plus administrative requirements including HACCP plans, traceability documentation, preventive control plans, etc.) while also complying with the U.S.F.D.A. registration and prior notice regime. Although the underlying food safety expectations are similar, the U.S. system does not recognize or accept the Canadian licensing/compliance regime as a substitute, meaning SMEs effectively must navigate two separate systems.
For larger commercial shipments to the US (over approximately $500 USD declared value), SMEs are often effectively required to use U.S. customs brokers to manage the import process. In practice, this significantly increases costs and complexity for smaller commercial contracts and reduces the viability of small-scale cross-border trade. There are also prior notification requirements for regulated food products entering the US. Failure to properly complete these requirements can result in shipment refusal, delays, or penalties. Again, this is manageable for large firms with compliance departments but creates a substantial administrative burden for SMEs.
Border Fees / Operational Friction
To pick up orders from Ryden’s in Minnesota, a local business is required to pay a U.S. commercial vehicle fee (~$20 USD), even when using a non-commercial passenger vehicle. While not a major cost individually, these types of administrative and operational charges add friction and expense to routine cross-border SME activity. Anecdotally, many Canadian companies selling regulated products into the U.S. (beauty products, soaps, food products, etc.) face similar duplication of administrative requirements and compliance systems despite already complying with Health Canada or CFIA regulations in Canada.
The recent elimination/restriction of U.S. de minimis exemptions has also made small cross-border e-commerce shipments substantially more difficult and less economically viable for SMEs selling directly to U.S. consumers.
Tariff Certainty / Supply Chain Stability
We agree with the Canadian Chamber’s recommendation for a USMCA rapid response mechanism for tariff escalation. As we have witnessed in recent months, the sudden introduction of new tariffs or quotas on supply chains have had a highly disruptive effect, eroding business confidence and leading to increased costs. For Canadian SMEs, tariff instability in the United States can create major downstream impacts even when the tariffs are not directly aimed at Canadian businesses.
As noted by a local roaster, coffee is a strong example of this problem. Canada has never really developed a large-scale direct-import coffee supply chain from producing countries because historically we have not needed one. Much of the coffee entering Canada flows through US-based importers, warehousing, logistics systems, financing structures, or transportation networks. As a result, when the US imposes tariffs, trade restrictions, or other measures on coffee-producing countries, the increased costs are often passed directly to Canadian SMEs and consumers. Canadian businesses effectively absorb these costs despite not being the intended target of the policy.
Enhancing workforce development and mobility
We support the Canadian Chamber’s recommendations to strengthen workforce development and labour mobility. Many forestry and mining operations rely on specialized technicians to repair and maintain specific equipment. As these industries expand in our region, access to this expertise will be essential to operational success.
S 232 Lumber Tariffs and Softwood Lumber Dispute
The recent imposition of S. 232 tariffs on lumber on top of the ever-increasing duties relating to the long-standing softwood lumber dispute, are having a dramatically negative impact on our forest sector businesses. Resolving both the softwood lumber dispute and S.232 tariffs on lumber are an urgent priority for our community.
Sincerely,
Charla Robinson, President, Thunder Bay Chamber of Commerce
Jamie Taylor, CEO, Thunder Bay Community Economic Development Commission
Enclosure: Canadian Chamber of Commerce recommendations for CUSMA Review