I’ve been watching the trade horizon with growing interest, especially as 2026 approaches – a pivotal year when the Canada-United States-Mexico Agreement (CUSMA) comes up for its first formal review. The stakes couldn’t be higher for Canadian businesses and workers.
The agreement, which replaced NAFTA in 2020, will undergo what trade officials call a “joint review” – a process that sounds bureaucratic but could reshape North America’s economic landscape for decades to come. According to Mary Ng, Canada’s International Trade Minister, preparations are already underway despite the deadline being nearly two years away.
“This isn’t just another trade negotiation,” explained Carlo Dade, director of the Trade and Investment Centre at the Canada West Foundation, when I spoke with him last week. “It’s our economic lifeline. More than 75% of our exports go to the United States, supporting roughly one in five Canadian jobs.”
What makes the 2026 review particularly concerning is the current political climate in the United States. Protectionism has become increasingly popular across the political spectrum, with both major parties embracing “America First” rhetoric to varying degrees. The Department of Finance estimates that Canadian exports worth approximately $1 trillion could be affected by potential changes to the agreement.
I remember covering the original CUSMA negotiations – the midnight calls, the tension-filled press conferences, and the palpable relief when a deal was finally reached. But this time feels different. The global economy has shifted dramatically since 2020, with pandemic disruptions, supply chain realignments, and the accelerating climate transition creating new priorities for all three countries.
“The original agreement was negotiated under extreme pressure,” noted Flavio Volpe, president of the Automotive Parts Manufacturers’ Association. “This review provides an opportunity to address issues that have emerged since implementation, particularly around electric vehicle manufacturing and critical minerals.”
For Canada, the review presents both risks and opportunities. On the positive side, it’s a chance to address persistent irritants like softwood lumber disputes and to strengthen protections for emerging industries. The critical minerals strategy, which aims to position Canada as a preferred supplier for the clean energy transition, could find stronger footing within an updated agreement.
However, the risks cannot be overlooked. American negotiators may push for increased access to Canada’s protected dairy markets or seek to erode protections for cultural industries. More concerning is the potential for new non-tariff barriers that could effectively restrict Canadian exports despite the agreement’s free trade principles.
Finance Canada has been conducting stress tests of various scenarios, according to documents obtained through Access to Information requests. These assessments suggest that certain sectors, including automotive, agriculture, and digital services, could face significant disruption depending on the review’s outcome.
The uncertainty surrounding the review is already affecting investment decisions. At a recent Toronto economic forum, several business leaders expressed concern about committing to major cross-border expansions until the trade landscape becomes clearer.
“We’re telling our members to prepare for all possibilities,” said Goldy Hyder, president of the Business Council of Canada. “That means diversifying markets where possible, but also engaging proactively with counterparts in the U.S. to demonstrate the mutual benefits of our integrated supply chains.”
The timing of the review coincides with several other significant economic shifts. The global minimum tax is scheduled to be fully implemented by then, potentially affecting cross-border investment flows. Climate policies, including border carbon adjustments, will likely be more developed, creating new considerations for energy-intensive industries.
According to StatCan data, approximately 2.4 million Canadian jobs are directly tied to exports to the United States, with millions more indirectly connected through supply chains. Any disruption to the trading relationship could have profound implications for communities across the country.
Provincial governments are also positioning themselves ahead of the review. Quebec has been particularly active, establishing a dedicated CUSMA task force and increasing its representation in key U.S. markets. Ontario, with its deep integration into U.S. automotive and manufacturing supply chains, has been focusing on state-level relationships to build support for continued economic integration.
The last time Canada faced such significant trade uncertainty was during the original CUSMA negotiations in 2017-2018. During that period, business investment noticeably slowed as companies delayed major decisions until the trade picture clarified.
“We can’t afford another prolonged period of uncertainty,” warned Dennis Darby, president of Canadian Manufacturers & Exporters. “The federal government needs to start building its coalition of supporters within the U.S. now, not wait until formal negotiations begin.”
What makes this particularly challenging is that unlike a new trade agreement, which requires congressional approval in the U.S., many changes could be implemented through regulatory mechanisms that bypass legislative oversight. This creates a more unpredictable negotiating environment.
Bank of Canada analyses suggest that trade uncertainty typically results in reduced business investment and higher risk premiums, effects that could be amplified in the current high interest rate environment.
For ordinary Canadians, the stakes of these seemingly abstract trade discussions are very real. Everything from food prices to job security could be affected by the outcome of the 2026 review. While consumers benefited from expanded product choices and competitive pricing under NAFTA and now CUSMA, any disruption to these arrangements could reverse those gains.
As I prepare to cover what will likely be one of the most consequential economic stories of the decade, I’m reminded that behind the technical language of trade agreements are millions of livelihoods and communities that depend on predictable access to our largest trading partner. The clock is ticking toward 2026, and Canada’s economic future hangs in the balance.
