Private member bills, especially those from Bloc Québécois members, rarely pass the parliamentary process. But after passing the House of Commons with strong support from members of all parties, a bill by Yves Perron, who speaks on behalf of the bloc on agriculture, conveniently passed for a second vote in the unelected Senate on Tuesday.
And perhaps more surprisingly, it addresses a controversial issue: Canada’s supply management system, which monitors production and sets minimum prices for dairy and poultry products, as well as eggs.
Many free market economists and politicians view supply management as a legalized price cartel that is increasing Canadians’ grocery bills. And in the negotiations of each of Canada’s major trade agreements in recent decades, the supply management system has emerged as one of the final sticking points.
[Read from 2016: Safe for Now, Canadian Dairy Farmers Fret Over E.U. Trade Deal]
If Mr. Perron’s bill passes the few remaining legislative hurdles and becomes law, it will prevent Canadian trade negotiators from offering supply management changes in future trade negotiations.
To avoid a price-wrecking oversupply, under the system, farmers are assigned a production quota – essentially a license to produce milk, chicken, turkey or eggs – that they cannot exceed. Until recently, imports were effectively banned through eye-watering import duties.
Dairy is the largest and most controversial segment. Recent trade deals have allowed limited quantities of dairy products to enter Canada duty-free or at low rates. But any imports above these levels will be hit with tariffs that could well exceed 200 percent.
Despite progress in Parliament, the legislation has divided both the Conservative Party and Canadian farmers.
Supply management has not received as much attention as, for example, supermarket profits in the recent furor over food price increases. Perhaps that’s because it’s difficult to figure out exactly how much more supply management makes Canadians pay for milk than grocery store shoppers in other countries.
No one disputes that Canadians generally pay more. A paper published in 2021 by agricultural economists from the University of Guelph and Dalhousie University reported that in eastern Canada, where dairy farming is largely located, the average milk price from 1997 to 2011 was 63.05 Canadian dollars for 100 liters. In New York and New Jersey, the price for a similar quantity over the same period was 44.31 Canadian dollars.
But the article’s author also noted that opening the market to U.S. imports would not guarantee lower prices for milk buyers in Canada.
“Given the costs of distribution for the Canadian market depending on where the products come from, Canadians could very well pay more for dairy products once supply management ends,” they wrote.
However, economists were unequivocal about the effect of an open market on Canadian dairy farmers.
“If trade were liberalized tomorrow, American milk would likely flood the Canadian market,” they wrote. “Canadian farmers would not be able to compete with the price of American milk and ultimately the entire Canadian dairy industry would be dependent on imported milk.”
All of this is happening at the same time that Canadians, like most people outside Asia, continue to drink less milk every year.
In supply management, farmers trade the fact that they cannot export their products for the stability and high prices that the system brings. But most agriculture in Canada is not supply-managed and relies heavily on exports.
The Canadian Agri-Food Trade Alliance, a group of farmers, food processors and related businesses, said the bill in Parliament “severely limits Canada’s ability to negotiate the best free trade agreements for all sectors of the Canadian economy, both in agriculture and beyond . .”
When the House of Commons passed the bill last June, the Conservatives split roughly in two, with 56 voting in favor. Most, if not all, members come from constituencies that include supply-driven farms. In contrast, only a single Liberal, from downtown Toronto, broke with his party and voted against the bill.
The proposed restrictions on trade negotiators are not theoretical perhaps. The United States-Mexico-Canada Agreement, the revised version of NAFTA, will be revised in 2026. Given that the United States has already challenged Canada’s restrictions on dairy twice through the USMCA litigation process, it is certain that it will again seek supply management changes in two years, regardless of what Parliament decides.
Trans-Canada
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A year later, police made arrests in connection with what they described as Canada’s largest gold heist.
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Anne Innis Dagg, a biologist often called “the Jane Goodall of giraffes” who spent decades fighting sexism at Canadian universities, has died at the age of 91.
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There was something extra for viewers of the Montreal solar eclipse.
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From The Athletic: The NBA has banned Toronto Raptors forward Jontay Porter from the league for life after discovering that he had been betting on the league’s games and sharing inside information.
Ian Austen, born in Windsor, Ontario, educated in Toronto, lives in Ottawa and has been writing about Canada for The New York Times for 20 years. Follow him on Bluesky @ianausten.bsky.social.
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