Canadian dairy producers concerned over American CUSMA demands

The U.S. says Canada has to allow more American dairy products to secure a new trade deal.

In order to ensure long term certainty of the Canada-U.S.-Mexico trade agreement, the United States is calling for sweeping changes within the dairy market.

U.S. Trade Representative Jamieson Greer told members of U.S. Congress Thursday that, while the trade deal has delivered benefits for American exporters, Washington is not prepared to automatically extend it for another 16 years without addressing “specific and structural issues.”

The United States is calling on Canada to expand access to its dairy market and address concerns about exports of certain industry products. While Canada allows a limited amount of U.S. dairy to enter tariff-free under CUSMA, Greer told U.S. lawmakers Canadian policies “unfairly restrict market access” for American products.

Canada’s dairy market operates under a supply management model, which helps regulate production and costs for farmers and dairy producers.

Jean-Michel Laurin, spokesperson for the Dairy Processors Association of Canada, says the demands out of the States don’t come as a surprised with the CUSMA agreement to be revised in 2026.

He notes the United States has long sought greater access of the Canadian market.

“This was a contentious area of negotiation when CUSMA was negotiated under the first Trump administration years ago,” says Laurin. “Canada made a number of significant concessions back then.”

Under the last negotiated agreement, Canada has allowed the U.S. access to nearly four per cent of its market tariff free, which results in roughly $140 million in losses annually for Canadian dairy processors, according to the organization.

He says the trade deficit is “massive” for Canadians on the dairy front.

“They also want to limit our ability to export some dairy products, not just to the United States, but actually to the global markets around the world,” Laurin claims. “Each of those changes would have a direct impact on producers and processors in Atlantic Canada.”

Prime Minister Mark Carney told reporters Thursday it is unlikely to see a deal negotiated for the sector outside of the CUSMA talks. He added if the United States want to talk about deals for any sector, he will always be ready.

“We will always pursue an agreement that is in the interests of Canadian workers and Canadian families,” says Carney.

While farmers look to Ottawa for more help, Dalhousie University Agri-Food Lab Director Sylvain Charlebois questions why the industry needs additional assistance.He points out that since the CUSMA deal was negotiated, Canadian diary producers have increased their production by four to five per cent in the last five years.

He questions why compensation should be made when more milk is being produced while quotas continue to meet the market demand.

“The reality is that trade deals don’t necessarily impact supply management and the quota system because they recalibrate quotas,” he says. “Some farmers leave the industry, while others actually take more quotas for free and so many farmers have actually become richer than when the first trade deal with the U.S. was ratified under Trump.”

The Dairy Farmers of New Brunswick declined an interview on the topic, while CTV Atlantic is awaiting a response from both the Nova Scotia and Prince Edward Island dairy farming boards.

-With files from CTV News’ Tammy Ibrahimpoor