Letter to US, Mexico seeks trade certainty as organizations navigate recession, tariffs, and a shrinking workforce
Canada has formally called for a 16-year renewal of the Canada-United States-Mexico Agreement (CUSMA) as trade uncertainty continues to drive workforce instability across the country.
Canada-U.S. Trade Minister Dominic LeBlanc sent a letter on June 2, 2026, to United States Trade Representative Jamieson Greer and Mexico's Secretary of Economy Marcelo Ebrard, formally recommending that the three nations renew the continental trade pact, the Canadian Press reported. The move is a required step under CUSMA's mandatory review process, scheduled for July 2026 — a milestone that will determine whether the agreement is locked in until 2042, enters annual reviews, or is renegotiated outright.
For HR executives managing Canadian workforces, the outcome matters. According to the Bank of Canada, an unfavourable review outcome would cause exporters to reduce production, investment, and hiring — with spillover effects across the broader services economy.
What the CUSMA review means for Canadian businesses
CUSMA has been a critical buffer for Canadian businesses since coming into force on July 1, 2020. The current 10-per-cent US global tariff doesn’t apply to goods that are compliant with CUSMA, providing a meaningful cost advantage for cross-border trade in sectors including manufacturing, agriculture, and resource extraction.
If the parties don’t agree to extend CUSMA during the July joint review, the agreement would generally continue but annual reviews would begin — a dynamic that could create a “rolling negotiation” environment where businesses face ongoing uncertainty for years, the Bank of Canada has said. That scenario has direct implications for HR leaders: workforce planning in manufacturing, auto parts, and export-dependent industries depends on the stability CUSMA currently provides.
Canada's employers are already navigating a labour market under significant pressure. Canada's private sector shed approximately 112,000 jobs in the first four months of 2026, while around 8,700 public sector positions were also eliminated, according to Statistics Canada.
Tariffs, labour market challenges
The hardest-hit sectors align closely with those most exposed to trade policy outcomes. HR leaders in mining and primary metals must weigh gradual downsizing and re-skilling, while jobs in forestry and logging fell four per cent year-to-date through 2025, extending multi-year losses, according to RBC Economics.
Structural pressures compound the trade risk. The Bank of Canada has characterized today's Canadian labour market as “low hire, low fire” — where persistently weak hiring has pushed the share of new jobs started within the last year to a near record low as of April 2026. HR executives face a dual challenge: near-term cost restraint alongside a longer-term risk of talent scarcity as the workforce contracts.
For people leaders, the CUSMA review translates into concrete workforce strategy actions. Scenario planning for possible outcomes — renewal, renegotiation, or annual review — should be embedded in any HR strategy tied to export-linked industries. Sectors including auto manufacturing, agriculture, steel, and forestry face the sharpest near-term exposure.
Tariffs discussion a priority
LeBlanc's letter stated that Canada is willing to consider any proposal beneficial to all three nations' long-term prosperity, while noting that parallel discussions on sectoral tariffs covering steel, aluminum, automobiles, and forestry will be essential, according to The Canadian Press.
The US and Mexico have already held two days of formal talks and have more scheduled.
Prime Minister Mark Carney told reporters on June 2 that the US has approximately 30 “technical issues” with Canada — about half as many as the US has with Mexico — and that Ottawa is exploring a new partnership arrangement to reduce the impact of existing US tariffs, reported CTV News. On June 1, US president Donald Trump signed a proclamation reducing tariffs on some steel and aluminum products from 25 to 15 per cent, with the possibility of a 10-per-cent tariff for equipment made with 85 per cent US steel or aluminum.
