Vermont Legislature SmartTranscripts:

[Michael Marcotte (Chair)]: Good morning, everyone. This is the Vermont House Committee on Commerce and Economic Development. Thank you. It is Thursday, 02/12/2026 at 09:01 in the morning. So today, we are starting our day with a special guest from Quebec. He is a delegate for New England, Rainy Sylvester. I think you all remember Rainy from last year. He came in and spoke with us, and he attended our air of hearing that we had. He's here today visiting, and we thought it would be good for to ask him to come in and and speak with us again a year later to see what he's seeing on the Quebec side of the issues that we we had. Well, I think they're shared issues. So, Rainey, welcome. Thank you again for coming in. Thank you

[Rainey Sylvester (Québec Delegate to New England)]: for having me. I'm delighted to be here. It's really an honor for me to be, in front of this company this morning. So I can start. I have a few comments, and obviously, I'll be delighted to answer your questions. The message today is even though with all the noise in in in Washington, we see positive things. We have done the last couple of months trade missions with companies. So companies are still looking to The United States and especially New England. So for me, in a nutshell, it's really is still very positive, even though we hear a lot of things on the ground. We work closely with our partners in New England. So it's refreshing for me to see that. And yesterday, I was here with meetings with different stakeholders, and we're still working on projects for the next couple of months. So again, thank you. Delighted to be here. Thank you again, chair Marcotte, vice chair, Graning, and ranking member White, and all the members of this company. It's really a pleasure to be here again this year. As a Quebec delegate to New England, I lead a small team of 10 people at the Quebec government office in in Boston. For more than fifty years now, our office has represented Quebec throughout New England as part of Quebec's international network. Our mandate our mandate is simple and ambitious to build bridges between Quebec and the six New England states and to support partnerships in trade, innovation, research, investment, and public policy cooperation. We work across sectors that are central to Vermont economic future, energy, semiconductors, construction, aerospace, and sustainable development, to name a few sectors. We also support cultural initiatives, so francophone partnerships and political dialogue, because economic relationships are stronger when they rest on human relationships. And with Vermont, those relationships are run deep. Quebec connection to Vermont is historic and precious. We share more than a border. We share ancestry, language, family ties, business networks, and a rural character that shapes our economies and identities. This connection is visible every year in agro tourism collaborations, Francophany month in March celebrations, the Vermont International Film Festival, and countless community exchanges. But while culture strengthens our bond, it's our economic integration that makes this relationship strategic. In 2024, I don't have the latest numbers for 2025. We should have these numbers in a few weeks. In 2024, trade between Quebec and Vermont reached approximately 2,300,000,000.0 US dollars, so it's quite significant. In New England, you are our third largest partner, which is, for the size of Vermont, pretty significant. That figure reflects a deeply integrated regional economy. Agricultural product, forest products, maple syrup, chocolate, advanced components, many goods across the border multiple times before reaching consumers. Our businesses do not operate in isolations. They operate in a shared North American production system. In the last couple months, Quebec and in Vermont have signed many agreements, but one is worth mentioning the agreement to advance a Northeast semiconductor manufacturing corridor. A forward looking initiative designed to to position our region as a hub for advanced manufacturing and technological innovation. This is not just symbolic cooperation, it's economic strategy. It demonstrates that when we act together, we complete we compete globally more efficiently. However, our integrated economies are facing increasing friction. Tariffs on on Canadian products are driving are driving up construction costs across United States. And since The United States is not self sufficient in wood products, these proposed tariffs are expected to increase the cost of important construction materials by at least three to four billion US dollars nationally. According to analysis from Yale University Business Data Lab, tariffs have already increased the cost of building a home in The United States for approximately US6000 dollars which is significant. For Vermont, where housing affordability is already a pressing issue, these increases matter. The affects builders, the affect workforce recruitment, the affects young families trying to purchase homes. When supply chains are integrated, trade barriers function like a tax on regional growth. And let's be clear, tariffs are taxes on imported goods. They directly impact Vermont consumers and employers. Tourism is is also provides another clear indication of the strain. Canadians are the single largest source of foreign visitors to The United States. In 2024 alone, Canadian visitors generated 20,000,000 more than 20,000,000 visits and 20,000,000,000 US dollars in spending, supporting roughly one hundred one hundred forty thousand jobs in in United States. Here in Vermont, it's also tourism is an important sector. It represents more than the Canadian visits annually contributing to an estimated to 150,000,000 US dollar to the state economy. Yet in 2025, Canadians travel to The United States declined by nearly 30%. We can see similar indicators with European countries where the number of visits are declining. The numbers reflect the real economic pressures. Border economies, retails, restaurants, short terms, accommodation, recreations, small businesses feel feel this immediately. Across the country, tourism operators are responding creatively. Some jurisdictions, and I've seen some elements here in Vermont, are offering Canadian only discounts or different initiatives. These measures signal one thing, demand is softening. Policy stances from Washington's on tariffs, immigration, currency volatility and border controls have contributed to this uncertainty. Regardless of a political perspective, the economic effects are measurable and immediate and partly for border states like Vermont. This is precisely when some national leadership matters most. States and provinces cannot control federal trade policy, but we can maintain stable, constructive, and predictable relationships. And in my job, in the job of my colleagues, it's exactly where we're tending to do, so continuing on different initiatives with different stakeholders. We can reaffirm partnerships, we can continue investing in cross border initiatives. We can send clear signals to businesses that regional cooperation remain remain strong. Last April, when I testified before the this committee and the Senate Committee on Economic Development, I encouraged us to double down on cross border collaborations. That recommendation stands. In challenging periods, our regional bonds become strategic assets. Recent national comments towards Canada, sorry, have been difficult for many Quebecers. But in response, several US legislators, including Georgia and Texas, to name a few, have passed bipartisan resolution affirming their friendship and cooperation with Quebec. We are currently in New England working with Massachusetts and Maine on similar resolutions. These resolutions matter. They are not symbolic gestures alone. They reassure investors. They reassure tourist operators. They reassures families who cross the border regularly. They reinforce the idea that our regional relationship transcends federal political cycles. This committee may wish to consider similar action reaffirming Vermont's long standing partnership with Quebec and its commitment to continued collaboration in trade, innovation, and tourism. Such a resolution would signal stability in a time of uncertainty. Finally, the data shows strength, but the data does not capture the human dimension of this relationship. It does not measure the families divided only by a line on a map. It does not measure the shared winter economy, the shared forest, the shared values of community and resilience. We are neighbors by geography. We are partners by economy, and we are connected by history. Vermonters will always find a warm welcome in Quebec, and Quebec stands ready, and we have for a generation to build, innovate, and prosper alongside with Vermont. Thank you for the opportunity to speak today, and I look forward for your questions and to continue to work together. Thank you.

[Michael Marcotte (Chair)]: Thank you. Questions?

[Unidentified Committee Member]: I'd like to sort of reemphasize what you said at the end about the human dimension Yep. Of our relationship. And I think it's probably the same in a lot of towns, but I live in I come from a a smaller rural town. If you look down through any of the lists, you know, property tax lists, photo lists, and you get you you understand how intertwined our two societies are by family means. You can see that. Just integrated into Quebec. It's integrated in our town, our and so I think that's reciprocated. So I think that's really important and that's why you've seen such strong support. One of the reasons why you've seen such strong support and the current difference.

[Rainey Sylvester (Québec Delegate to New England)]: Yeah, absolutely. And I meet on a regular basis different stakeholders on both sides of the borders, and there's this willingness to continue to work on different initiatives. So again, for me, I see that very positively, and we try to encourage and support these initiatives.

[Unidentified Committee Member]: So glad you're here. Thank you for coming today.

[Rainey Sylvester (Québec Delegate to New England)]: Pleasure.

[Unidentified Committee Member]: I know that we don't have the numbers from 2025 yet, but we are expecting a significant decline in visitors from Canada to Vermont. We've seen it in our numbers. Are there creative solutions that we can do to reestablish those close ties that were lost with all of the national rhetoric?

[Rainey Sylvester (Québec Delegate to New England)]: Yeah, I would suggest, and I've seen some initiatives with tourist born of Eastern Township and also the Monterey Tourist Born. They are talking with their counterparts in Vermont on different initiatives, in, for example, work on food events or different initiatives. And what I would say is, we're going through a perfect storm. Yes, people are upset from some comments, but there's also at the border more questions, people are wondering if it's still safe to travel in The United States. So all these are adding up, and that's why people are, so I I would definitely recommend that you you you first, you continue to talk with your counterparts in in in Canada and Quebec to make sure that and we're doing the same, because American tourists for Canada and for Quebec are also very important. So I've been involved with some initiative to make sure that Americans are aware that they're still welcome in Quebec and it's still a safe place and so forth. So that's number one. And again, make sure that we are aware of your events in the region, your major festivals, initiatives. These are we believe that, you know, time will will help the this the whole situation to especially on tourism, because it's a this is where we have seen the the real impact of this situation. In other sectors, what we've seen is some decline, but since we still have the free trade agreement between our, well, the three countries, Mexico, United States and Canada, if I look at what we have done in terms of missions in the last twelve months, is pretty similar as what we've done before the current administration in Washington, in terms of attending trade shows, companies visiting from Quebec. It's we haven't seen a really steep decline. But when we look at the numbers for tourism, we really see, I mentioned 30%, it's 30% at airports, but it's 20%, 25% with similar at the border. So, and there's a lot of reasons for that. Again, more questions, we hear things in Canada on, hey, they can check your social media pages and all that. So even if it's true or not, people are thinking, yeah, cautious.

[Unidentified Committee Member]: Yeah. First, I'd like to end the record of saying I'm Quebec's number one fan terms of tourism, in terms of going there. Yeah, I think I'm doing my part to encourage tourism to Quebec. But I'm curious what you've seen as far as trends of of Vermonters going to Quebec on vacation. Or, I mean, do you have you seen a change or US citizens I

[Rainey Sylvester (Québec Delegate to New England)]: don't have specific numbers only for volunteers but US citizens we've seen a small decline. Not 20%. Depending on the different numbers between maybe 510%. So, it can mean a lot of things, but but still for us, it's a number that we are following. Maybe you saw some initiatives from the Eastern Township and other regional tourists born on doing on the social media's advertisement and to make sure that Americans are welcome in Quebec. And quite frankly, we follow any any anything that would happen. We try to understand, okay, is it is it just another anecdote or it's really a part of a trend? But yeah. But in terms of commerce, I mean, we we we continue to I said, there are we organize trade missions. We attended some of my colleagues, there's a manufacturing event in Vermont, we try to bring companies there, There are events coming in Quebec that might be of interest to some of your companies, and make sure that we publicize these events. Yeah, so so we continue on that trend to make sure that companies and and different associations work together.

[Michael Marcotte (Chair)]: Proceeding to know my agency of commerce and Kim Tierney has been last summer, we had a had a number of politicians and businesses come down to Newport. It's right on Mount For Magog and had some good discussions there. I was speaking with someone from the University of Sherbrooke about they have a process they had the canned process for chips that GlobalFoundries has in UBM, and I kind of talked to UBM also to reach out to the University of Sherbrooke to see if there could be a partnership there. Absolutely.

[Rainey Sylvester (Québec Delegate to New England)]: It's almost public knowledge, but yesterday I had a meeting with Tim, and we discussed different initiatives in the next couple of months to see if we can repeat this initiative of last year and see how we can work, you know, the Freeport Sherbrooke corridor, and also in this part as well, Burlington and Quebec as well. On semiconductor, but also in other sectors, aerospace. There's an event in Montreal in aerospace, and Vermont will have representative companies there and will work with Tim and his team to make sure that we have B2B meetings with companies from Quebec.

[Michael Marcotte (Chair)]: Yeah. I know we're seeing, especially on the border of Newport and Derby Line, even all the way down to St. Johnsbury, we're seeing a big decline in Canadian visitors. Now our restaurants have really taken a hit, same with JP, because the and then also Kingdom Trails, the bike trails in Burke, have seen a decline in Canadian.

[Rainey Sylvester (Québec Delegate to New England)]: Do you have numbers or do you have a

[Michael Marcotte (Chair)]: I don't have specific numbers, but I'm hearing 30 to 35%. Okay. So it's significant for us. And I know there's still there's some Americans that are apprehensive about crossing the border, whether I don't think so much Canadian the Canadian border that's coming back. It's how much problems can we have coming back. I haven't I when I go up, I I generally have no problems. Meetings are so far, it's been like as usual, but I heard stories and you try to see if it's part of a trend or it's only one person, but yeah. I think, you know, we keep communicating with each other, make sure that every our lines of communication are open. We're still friends. We're still family. So

[Rainey Sylvester (Québec Delegate to New England)]: And and, you know, one of the initiatives we've done in the last couple of months as you may know, the border is a federal jurisdiction, but we, Certificate back, so our provincial police, met with officials here in Vermont to compare notes and see, okay, what's going on? Is there anything we can do to work together to make sure that the border is safe? And because what we want is, yeah, a safe border for trade and people that there's no real friction, so that is as smooth as possible, because it's part of the success of what we've done in the last couple of decades, trade is integrated between the two regions.

[Michael Marcotte (Chair)]: Very important.

[Rainey Sylvester (Québec Delegate to New England)]: Anyway, we're here to support you, so feel free to reach out if you see anything, hear anything, and you think that we can be going to have a support, I'll be delighted to come back and also work with you for the initiatives. For us, the next activities are in March for the Francophonie month. We have events in Burlington and also in other locations and in Vermont. And also this summer, we're working on initiatives as well.

[Michael Marcotte (Chair)]: I think we'd like to work with you on a resolution, as you suggested. Think that was a great idea that I think we as a committee can work on with you

[Rainey Sylvester (Québec Delegate to New England)]: and put something together. I can send you an example that would have been done across The United States, and the whole idea is we will have the National Assembly in Quebec do a similar resolution in the next couple of weeks, months. As you may be aware, we will have an election in Quebec October, so we try to do that before. Also, major event, as you may know, there's the New England Governors and Canadian Premiers. The next meeting will take place in Vermont. I don't have the date yet, but it's I was in St John, Newfoundland a couple weeks ago, it was November. Yeah. And and Governor Scott was there. And and, yeah, these these events and gatherings are also important. And if I can say this one in St. John was very positive. I mean, were ready to work together on different initiatives. Again, it was refreshing to see people from both countries working together, different initiatives.

[Michael Marcotte (Chair)]: Else for Rainey? Rainey, thank you for your time this morning. It's good to see you again. Look forward to working with you again on that resolution. I'm sure that's something that we can put together and get through pretty easily.

[Rainey Sylvester (Québec Delegate to New England)]: Thank you. Thank you again. It's been a real honor to be here, and thank you for allowing me to talk in front of you this morning. Thank you. Thank you.

[Unidentified Committee Member]: Thank you very much. Cheers.

[Michael Marcotte (Chair)]: See you soon. So our next we're looking at the DFI budget at 10:00. So