The Importance of Canada–U.S. Cross-Border Mobility for Québec’s Manufacturing Sector

Québec’s manufacturing sector plays a vital role in the province’s economy, as it generates a large number of jobs and accounts for a significant share of exports.

In the second quarter of 2024, Québec’s international merchandise trade (imports and exports) reached $64.1 billion, up 5.3% from the same period in 2023. More than half of this trade, or $33.5 billion, was with the United States. Despite an overall trade deficit of $3.1 billion, Québec posted a trade surplus of $10.8 billion with the U.S.

In addition to being a major export market, the U.S. is also a popular destination for some manufacturers that choose to expand production activities. Many Québec companies have set up subsidiaries or partnerships to access this key market. A study by Sous-traitance industrielle Québec (STIQ) identified some 500 Québec manufacturing SMEs with a U.S. presence in a variety of sectors, including aeronautics, automotive, ground transportation, industrial equipment, and chemical and metal products.

Cross-border mobility is crucial to the success of Québec manufacturers in the United States. In particular, it allows them to:

• Participate in trade fairs;
• Train customers to use complex equipment;
• Offer after-sales service and honour warranties;
• Train customers to use complex equipment;
• Transfer executives and managers to ensure the development of new activities on American soil.

In the second quarter of 2023, Canadian residents made 6.1 million trips to the U.S., up 2.2 million from the same period in 2022 (4.0 million). While leisure or pleasure may account for some 50% of travel motives, business and work-related travel nevertheless represent a significant proportion of cross-border trips.

Current Context

The free trade agreement between Canada and the U.S., known as the Canada–United States–Mexico Agreement (CUSMA), plays a key role in the mobility of professionals and business travellers between the two countries. 

It includes specific provisions facilitating the temporary entry of Canadian businesspeople for activities related to the trade of goods or services. 

It also contains provisions allowing the temporary entry of certain executives, managers, highly specialized employees, and professionals for work purposes. These provisions are essential for Québec’s manufacturing sector, as they enable companies to rapidly deploy experts where they’re needed. Among other things, these measures simplify procedures, prevent delays, and avoid the legal and administrative hurdles of the U.S. immigration system. 

Concerns of Québec Companies

The future of the CUSMA remains uncertain, especially given the protectionist measures planned by the Trump administration. President Trump has announced his intention to renegotiate or withdraw from certain trade agreements altogether to protect American industries. 
These changes could result in: 

• Tariffs on Canadian imports, having a direct impact on Québec manufacturers that export to the U.S.;
 
• Restrictions on cross-border mobility.

The scheduled review of the CUSMA due in 2026 could be moved up, adding to the uncertainty for Québec companies. 

Key Points for the Next Round of Negotiations

Cross-border mobility between Canada and the United States is of vital importance to the Québec manufacturing sector. During the last round of negotiations, the provisions relating to the movement of people remained unchanged. It’s in the interests of all companies to work together to seize this opportunity to change certain outdated provisions: 

• Update the category of professionals eligible for work permits (TN). The needs of companies and the skills of professionals have evolved considerably, and new professions have emerged since the list was drawn up in 1994. The list must be revised to reflect these changes and meet current business needs. 
• Add technical positions to ensure the fluidity of services and facilitate knowledge and technology transfer. 
• Maintain the possibility for Canadians to apply for work permits directly at land and air ports of entry.
 

Conclusion

Cross-border mobility is essential to promoting bilateral trade and stimulating economic growth and innovation. Facilitating the movement of skilled businesspeople and professionals also strengthens commercial and cultural ties, fosters the sharing of skills and technology, and helps companies achieve cross-border growth by supporting their expansion into new markets. This mobility is a key driver of economic prosperity in both countries.