With the eventuality of Canada formally entering the Trans Pacific Partnership (TPP) talks becoming more likely, there will most certainly be more commentary and debate on Canada’s supply management system for milk, poultry and eggs. That’s because the United States, Australia and New Zealand didn’t favour Canada joining the TPP negotiations because of our system of supply management – and there will be heavy pressure for Canada to abandon this system. Accordingly, the corporate-right is arguing that supply management must go.
But the broader public for the most part may be unfamiliar with what supply management even means.
To begin with, supply management is different than the compulsory pooling of grain and the ‘single-desk’ selling (to achieve the best price on international markets) of grain that we had under the Canadian Wheat Board (and which effectively ends on August 1 due to the C-18 legislation passed by the Harper government).
In short, in the 1970s a system of supply management came into effect in Canada to regulate the supply of milk, poultry and eggs. The national system, managed by the Canadian Dairy Commission, means that imports of these goods are limited in areas where domestic products can meet demand. The system means consistent prices for both producers and consumers. The price the farmer receives is set by provincial bodies, such as the Dairy Farmers of Ontario, taking into account the Canadian Dairy Commission’s study of production costs.
A Government of Ontario fact sheet further explains, “In Canada, the broiler hatching egg, chicken, dairy, egg, and turkey industries operate under national supply management systems. These systems are controlled by national bodies and by provincial commodity marketing boards that have been delegated powers by federal and provincial governments. The national systems are similar in many ways. The amount of each commodity that is marketed by producers is controlled through a quota system. The volume of the commodities imported into Canada is limited by tariff rate quotas, under which very high tariffs are applied on imports above a specific level. By matching the total supply of the product available in Canada with the market demand, supply management systems aim to provide efficient producers with fair returns and to provide Canadian consumers with an adequate supply of the product at reasonable prices.”
The Canadian Council of Chief Executives opposes supply management. John Manley, their president, sees it as an antiquated system that protects fewer than 20,000 dairy and poultry farmers through costly tariffs that inflates the costs paid by consumers for milk, cheese, chicken and eggs. Globe and Mail columnist Jeffrey Simpson describes supply management in his column today as a “protectionist racket”. To read Council of Canadians trade campaigner Stuart Trew’s rebuttal to these types of arguments, please see his most recent blog – Angry mob goes after the supply management boogeyman – here.
In a letter to the editor in the Globe and Mail today, Paul Rowe comments on the Gary Mason column about the threats posed by the TPP. Rowe writes, “Canada does not need to be party to another corporate rights charter. Let’s hope that the media, groups like the Council of Canadians and others shine lots of light on this potentially far-ranging deal before anything is signed.” We’ll certainly do our best. And we’ll keep in mind another comment made by Simpson. In his column today, he highlights, “If you think the theatre of 100,000 people in the streets every night in Quebec, coupled with pot-banging and endless (largely sympathetic) media coverage, was over the top, wait until any federal government threatens supply management. Political hell hath no fury like dairy farmers aroused.”
