However this most recent drama plays out, supply management should be eliminated by the next federal government. Photo Credit: Shutterstock.
Once again, the ridiculous policy of supply management is garnering headlines because the Bloc Quebecois leader in the House of Commons, Yves-Francois Blanchet, is demanding that the Liberals enshrine this destructive policy by supporting a Bloc MP’s private member’s bill, C-282. This bill would exempt supply-managed agricultural sectors – namely dairy, poultry and eggs – from any future international trade negotiations.
Supply management was established in the 1970s following a period of price volatility in the dairy, poultry and egg industries. The system was justified by claiming to be a means of ensuring a fair return to farmers and security of supply, safety of supply and price stability to consumers. The policy consists of imposing quotas on farmers so that supply remains at a certain level and restricting imports from outside of Canada so that domestic producers are protected from foreign competition.
The overarching result of supply management has been to enrich farmers who produce these commodities while imposing higher prices on consumers than would prevail if market competition was permitted. As in all industries that force quotas of one sort or another, the system has also created a market for “quota” of the various affected products so that a new entrant into the industry is forced to ante up a considerable amount of money to purchase “quota” so that they can legally operate. One would maybe expect to find such a rigid, restrictive and problematic system in a communist country, not Canada.
Not surprisingly, supply management has had some perverse results as any policy that messes with basic market economics always does. Recently, a research study was published that showed between 6.8 billion and 10 billion litres of milk was discarded on dairy farms in Canada over the period from 2012 to 2024, with an approximate value of almost $15 billion. This study found that the amount of milk dumped accounted for about 7 per cent of all milk produced during that time. This not only represents a considerable waste of the land and water resources needed to produce all that milk, but also means that Canadians could be enjoying improved nutrition by consuming the wasted milk at a time when far too many Canadians rely on foodbanks, and it is estimated that about 20 per cent of Canadian households and two million children suffer from food insecurity.
As is often the case, the main impediment to getting rid of supply management is political. The lion’s share of Canada’s dairy industry is located in Quebec, so all the usual political implications of abolishing a policy that mostly benefits that province apply. The dairy lobby has also become very powerful – after all, those wealthy dairy and poultry farmers have lots of dough to throw around – and was famously credited with enabling Andrew Scheer to win the 2017 Conservative party leadership race. Maxime Bernier had been expected to prevail but had said he would get rid of supply management, causing the dairy lobby and its considerable resources to line up behind Scheer.
Now it’s the Bloc Quebecois trying to further tie the hands of future governments by making supply-managed sectors exempt from future trade agreements. As supply management is usually one of the key issues at play during trade negotiations, this is not a trivial demand. Bill C-282 was passed in the House of Commons last year with all parties foolishly voting in favour and has been sitting in the Senate ever since.
Thankfully, some senators are holding it up on the basis that it would restrict future negotiators of trade agreements, which is absolutely true. Blanchet has stated that the Senate has until Oct. 29 to approve the Bill, or he will vote to bring the Trudeau government down on a non-confidence motion. If so, it will likely be the first time the Bloc has done anything to benefit Canada, as it’s clear the vast majority of Canadians would dearly love to have a federal election.
However this most recent drama plays out, supply management should be eliminated by the next federal government. Other countries that had similar systems have done so in a fair way to the farmers affected by phasing it out over a number of years and providing other means of compensating them. The ostensible reasons for the policy being put in place initially were never true. Such a regime doesn’t apply to most food products, and we still have safe, sufficient, high-quality products at mostly competitive prices for food in Canada. At a time when food insecurity is rampant and food inflation is a problem, there couldn’t be a better opportunity to get rid of a policy that hurts most Canadians and rewards but a few. It would also free us up to take advantage of more wins for Canada in international trade negotiations. If nothing else, there would be no more reason to cry over spilt milk.
She has published numerous articles in journals, magazines & other media on issues such as free trade, finance, entrepreneurship & women business owners. Ms. Swift is a past President of the Empire Club of Canada, a former Director of the CD Howe Institute, the Canadian Youth Business Foundation, SOS Children’s Villages, past President of the International Small Business Congress and current Director of the Fraser Institute. She was cited in 2003 & 2012 as one of the most powerful women in Canada by the Women’s Executive Network & is a recipient of the Queen’s Silver & Gold Jubilee medals.
