Bills from private MPs, particularly those from members of the Bloc Québécois, rarely make it through the parliamentary process. But after passing the House of Commons with strong support from members of all parties, a bill by Yves Perron, speaking for the Bloc on agriculture, easily passed a second vote in the unelected Senate on Tuesday.
And, perhaps even more surprisingly, it is a controversial issue: that of Canada supply management systemwhich controls production and sets minimum prices for dairy products, poultry and eggs.
Many free-market economists and politicians view supply management as a legalized price cartel that drives up Canadians’ food bills. And in negotiations for each of Canada’s major trade agreements over the past few 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]
Self Mr. Perron’s account clears the few remaining legislative hurdles and becomes law, it will prevent Canadian trade negotiators from offering any changes to supply management during future trade negotiations.
Under the system, to avoid a price-killing oversupply, farmers are given a production quota – effectively a license to produce milk, chicken, turkey or eggs – that they cannot exceed. Until recently, imports were effectively banned through incredibly high import duties.
The dairy sector is the largest and most controversial segment. Recent trade agreements have allowed limited quantities of dairy products to enter Canada duty-free or at low tariffs. But any imports above these levels are hit with tariffs that can be well above 200%.
Despite progress in Parliament, the legislation has divided the Conservative Party and Canadian farmers.
Supply management hasn’t received as much attention as, say, grocery store profits in the recent uproar over rising food prices. Perhaps that’s because it’s difficult to understand exactly how much more supply management pushes Canadians to pay for milk compared to food shoppers in other countries.
No one disputes that Canadians generally pay more. a document published by agricultural economists at the University of Guelph and Dalhousie University In 2021 it was reported that in eastern Canada, where dairy farming is largely based, the average price of milk from 1997 to 2011 was C$63.05 per 100 litres. In New York and New Jersey the price over the same time period for a comparable quantity was $44.31 Canadian.
But the study’s author also noted that opening the market to American imports would offer no guarantee of lower prices for milk buyers in Canada.
“Given the cost of distribution to cover the Canadian market, depending on where the products come from, Canadians may well pay more for dairy products once supply management is finished,” they wrote.
Economists, however, were unequivocal about the effects of an open market on Canadian dairy producers.
“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 comes at the same time that Canadians, like most people outside of Asia, continue to drink less milk each year.
In the context of supply management, farmers trade the inability to export their products for the stability and high prices brought by the system. But most types of agriculture in Canada are not covered by supply management and rely heavily on exports.
The Canadian Agri-Food Trade Alliance, a group of farmers, food processors and related businesses, the bill said in Parliament “severely limits Canada’s ability to negotiate the best free trade agreements for all sectors of the Canadian economy, both agricultural and non-agricultural.”
When the House of Commons passed the bill last June, the Conservatives were split roughly down the middle, with 56 votes in favour. Most, if not all, of these members come from constituencies that include supply-managed farms. In contrast, only one Liberal, from central Toronto, broke with his party and voted against the bill.
The proposed limits for trade negotiators are not a theoretical maybe. The United States-Mexico-Canada Agreement, the revised version of NAFTA, will be reviewed in 2026. Given that the United States has already twice challenged Canadian restrictions on dairy products through the USMCA dispute process, it is certain that it will seek again changes in supply management 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 robbery.
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Anne Innis Dagg, a biologist who was often called “the Jane Goodall of giraffes” and who spent decades fighting sexism in Canadian universities, has died at 91.
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There was a further surprise for viewers of the solar eclipse in Montreal.
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From The Athletic: The NBA has kicked Toronto Raptors forward Jontay Porter out of the league for life after finding that he had bet on championship matches and shared inside information.
Born in Windsor, Ontario, Ian Austen studied in Toronto, lives in Ottawa and has written about Canada for the New York Times for twenty years. Follow him on Bluesky a @ianausten.bsky.social.
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