Kemi Badenoch is embroiled in another political row after Canada refuted her claim she was engaging with them on trade talks.
The country’s high commissioner to the UK, Ralph Goodale, has told MPs that no discussions of any kind are happening.
The intervention risks inflaming tensions after Ms Badenoch paused negotiations with Canada on a new free trade agreement last month, amid a standoff over beef and cheese.
It comes as she is embroiled in a separate spat with the ousted chairman of the Post Office, over his claims that he was told to stall compensation payments for victims of the Horizon scandal, which she denies.
Despite pausing the trade negotiations with Canada, Ms Badenoch went on to tell MPs a few days later that talks were ongoing ahead of a looming March deadline that will trigger a hike in tariffs for UK car makers.
Asked in the Commons on 29 January how she plans to “avoid a UK tariff war”, Ms Badenoch said she wanted to “state explicitly that talks have not broken down”.
The business secretary said the two sides “have an ongoing rules-of-origin discussion” in relation to the car tariffs and “we are also having multiple discussions with Canada on cheese”.
But this has been disputed by Canada in a letter to the Commons Business Committee dated 16 February.
Mr Goodale wrote that he is “disappointed with the unilateral pause in these negotiations”.
‘Questions to answer’
He added: “As far as I’m aware, since the UK announced its pause on January 25, there have been neither negotiations nor technical discussions with respect to any of the outstanding issues – including British access to Canada’s Tariff Rate Quotas for cheese and the approaching expiry of cumulation provisions respecting Rules of Origin.”
Liam Byrne, chair of the Business Committee, is now demanding Ms Badenoch correct the record.
“It is essential the secretary of state now explains why the Canadians’ account of the talks is so utterly at variance with what she told the House of Commons,” the Labour MP told the Financial Times.
Sharing the letter in a post on X, he added that “without doubt there are now some questions to answer”.
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The UK and Canada have been holding talks on a post-Brexit trade deal for the past two years, while widely continuing to trade on EU terms in the interim.
This has allowed the UK to continue selling its cheese products without facing an import tax, which has caused anger among Canadian farmers.
The agriculture sector also wants the UK to relax its ban on hormone-treated beef, but ministers are yet to move.
A time-limited agreement had also allowed the UK to continue to sell cars without high import taxes, but given the negotiations have paused this is now in doubt, with the terms due to expire at the end of March.