Madam Chair, on behalf of the U.S. Chamber of Commerce, I thank you for the invitation and the opportunity to be here to provide testimony to the standing committee as it evaluates actions ahead of the CUSMA review.

The chamber has a long-standing commitment to the North American economic relationship. No organization in the United States has been a more vocal advocate for a strong and mutually beneficial partnership with Canada and Mexico. We are guided by principle, not politics. We defend and promote free enterprise, free markets, rules-based trade and investment, and the rule of law.

The trilateral relationship goes beyond the impact of our $1.7-trillion annual three-way trade to include significant direct investment ties and highly integrated value chains that support millions of jobs across all three countries. Our three countries have the potential to expand this important relationship and work together to meet shared challenges, such as the diversification of semiconductor production, energy security, energy transition, food security and critical minerals.

CUSMA is intended to facilitate closer economic co-operation and provide legal certainty for cross-border trade and investment. The chamber calls on each of the three governments to address implementation and compliance issues and uphold the spirit and letter of the agreement. In short, we each must keep our word.

For example, the chamber has called for the U.S. government to uphold the dispute settlement panel ruling on automotive rules of origin published back in January 2023. As we aim to make North America the most competitive global platform for vehicle production, the future of the continent's automotive industry depends on the certainty provided by this agreement. In addition, maintaining our competitive edge also means avoiding the expansion of U.S.-driven buy American policies. In short, we need to recognize that in North America, we make things together.

At the same time, we appreciate the opportunity to highlight areas that require Canada to fulfill its CUSMA commitments. Canada is advancing an ambitious digital agenda. We are concerned that Canada is looking to bolster its competitiveness at times by targeting U.S. businesses. Such policies not only erode Canada's culture of innovation and competitiveness, but also undermine Canada's commitment to maintaining open and fair business climates.

First, I'd like to flag our concern with the Canadian Radio-television and Telecommunications Commission's decision to impose an initial based contribution of 5% on U.S. streaming services. This decision fails to recognize the investments made by American streaming services in Canada's creative sector. Indeed, Americans can hardly turn their televisions on without seeing programs created here in Canada.

Consequently, Americans find it ironic that Bill C-11 specifically targets U.S. companies in a manner that may violate Canada's international trading obligations, including those under CUSMA. This action appears to contravene commitments that guarantee a minimal standard of treatment, require equal treatment of foreigners and local enterprises, and obligate Canada to refrain from imposing certain performance requirements on foreign direct investment.

Second, we have a deep concern over the potential for Canada to reintroduce its unilateral digital services tax by implementing Bill C-59. The DST is set to introduce discriminatory measures against U.S. companies, violating Canada's obligations under CUSMA and the WTO and contradicting Canada's commitment to the G20 OECD process. Adding to our concern is the fact that Canada's proposed DST is two and potentially three years retroactive. We would note that the Office of the United States Trade Representative has investigated several measures substantially similar to those proposed by Canada—including a French DST, on which the Canada version is modelled—and found them to be unreasonable or discriminatory and burdensome or restrictive to U.S. commerce and thus actionable under U.S. trade law.

Last, we have serious concerns with the artificial intelligence and data act, which is part of Bill C-27, currently being studied by your colleagues in the House of Commons industry committee. In its current draft, the bill is overly broad and restrictive, capturing a potentially endless number of low-risk use cases that risk putting Canada out of step with the U.S. and other important trading partners on AI regulation. If it moves forward, we are concerned that it will have an adverse effect on Canada's competitiveness, hinder AI development, limit business exploration and ultimately affect productivity and economic growth. During our visit to Ottawa this week, we'll be hosting an AI policy dialogue precisely to discuss some of the challenges and opportunities related to AI.

At the chamber, we are focused on keeping the 2026 CUSMA review in perspective. While the three trading partners are sovereign states, no one has identified a compelling reason to undertake a wide-ranging renegotiation of this agreement. Primarily, this upcoming review is an opportunity to ensure implementation and compliance with the existing commitments. Having said that, Canadian policies such as Bill C-11, the proposed DST, and Canada's approach to AI all have the potential to complicate this review. Perceptions that Canada is violating CUSMA commitments will serve to increase pressure to criticize the agreement during the review process.

In closing, the chamber stands ready to work with our partners in Canada to continue to build a strong North American partnership. We thank you for this opportunity to share our views at this hearing and look forward to your questions.