The Trudeau government has vowed to protect Canada's dairy supply management system in trade talks with the Trump administration. But is that a hill worth dying nn?
Now Is the Ideal Time for Canada to End Its Costly and Outdated Dairy Supply Management System | Epoch Times | Cory Morgan:
February 8, 2025 - "Canadians collectively breathed a sigh of relief when President Trump offered a reprieve [from] the proposed 25 percent tariff on Canadian trade goods. The trade war is not over, however. It has been put on pause for 30 days. As the deadline approaches ... the Trump administration will make new demands, and Canada’s dairy supply management system will be targeted. Canadian ministers recognize this threat, as International Trade Minister Mary Ng made it clear in a recent interview that there will be no concessions made on supply management.
"Is this a reasonable stance to take? There are several reasons why it may be time for Canada to shed its supply management system.
"Canada imposes tariffs as high as 325 percent on American dairy products such as butter. Credibility in trade negotiations is essential, and it’s difficult to call Trump’s threat of 25 percent tariffs unfair when insisting on maintaining Canadian tariffs that are 10-fold higher in this specific sector.... A major trade deal with the UK was scuttled in 2024 when Canada slapped a 245 percent tariff on UK cheese. Both Australia and New Zealand have accused Canada of dumping dairy products on the international market, threatening the Comprehensive and Progressive Agreement for Trans-Pacific Partnership....
"Canada already literally dumps hundreds of millions of litres of milk down the drain every year due to supply management. Dairy farmers have quotas assigned to them, and if they produce milk beyond that quota, it is illegal to sell the products. They are forced to dump it either down the drain or in offshore sales. They can’t sell it to Canadians as it would lead to a reduction in domestic dairy prices..... In any other industry, such price-fixing would be illegal.
"The trade war has led to calls for Canada to reduce interprovincial trade barriers on products and services. Improving domestic trade within Canada would reduce reliance on foreign products. But Canada’s supply management greatly hinders interprovincial trade, as provincial dairy boards set local quotas and control the movement of products between provinces to ensure prices remain high.... Canadian households pay an extra $300 to $444 annually due to the system, and the costs continue to rise.
"Canada’s dairy supply management has decimated small family-run dairy operations as larger corporate operations have bought up and jealously held onto government-issued dairy quotas. In 1991, Canada had 60,495 dairy producers. Today, there are fewer than 10,000.... The bulk of Canada’s large dairy operators have concentrated in Quebec. While Quebec accounts for 23 percent of Canada’s population, it accounts for 37 percent of the country’s dairy production. Canadian politicians are always averse to taking policy stances that may upset Quebec. This problem is more acute now as an election looms.
"Supply management systems were implemented in other nations in the 1960s and 1970s. Since then, most countries phased out the systems as they recognized it harmed the citizens and industries it was supposed to protect. New Zealand got rid of supply management in 1984, and Australia in 2000. The dairy industries in both countries have flourished in response. The model to extricate a nation from supply management already exists. Canada can follow it....
"Canada’s dairy supply management system is costly and outdated. It isn’t a hill worth dying on in a trade war. Now is the perfect time to move on from it."
Supply management: The argument for and against, and why Trump hates it | CBC News: The National | July 12, 2018:
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