The U.S.-Mexico-Canada Agreement (USMCA) is up for review on July 1, 2026. Former Bank of Canada Governor Stephen Poloz notes that uncertainty over the trade talks is negatively affecting investment in Canada.
This review clause requires the U.S., Mexico and Canada to confirm in writing whether they wish to continue the agreement. If any of the parties decide not to renew the agreement, it will initiate a process that could lead to the termination of USMCA by July 1, 2036, unless the objecting party or parties change their stance.
Poloz says Canada to be “super proactive” and not wait defensively but actively engage in the upcoming trade negotiations with clear demands. The ongoing uncertainty, especially with President Donald Trump’s potential return to the White House, has caused Canadian companies to shift investment focus to the U.S., draining domestic investment.
Canadian Prime Minister Justin Trudeau’s government is strategizing for the 2026 review, heavily influenced by the upcoming Nov. 5 U.S. election results. Poloz, now an adviser at Osler Hoskin & Harcourt, is also examining ways for Canadian pension funds to invest more domestically by identifying and removing barriers to investment.
In summary, the potential consequences of not renewing the USMCA include significant economic and trade disruptions, increased policy and regulatory uncertainty, weakened enforcement of labor and environmental standards, and a potential decline in regional competitiveness and foreign direct investment. These impacts underscore the importance of the upcoming review process and the need for careful consideration by all parties involved.
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