Should Canada abandon decades-old regulations that govern the highly controlled dairy industry? Or would abolishing the supply management system introduce new taxes and kill jobs?
It’s a polarizing topic among two of the leading Conservative leadership candidates, Maxime Bernier and Steven Blaney, who vehemently disagree over whether Canada’s supply management system is fair.
The issue came into sharp focus this week after U.S. President Donald Trump called out Canada’s system, saying it hurts Wisconsin farmers and flies in the face of his new “Buy American, Hire American” policy.
In the current system, the Canadian dairy sector negotiates the price of milk and tweaks production to meet demand. Canada also imposes import tariffs on ultra-filtered milk, a protein liquid concentrate used to make cheese.
The system has remained relatively unchanged for decades. Critics say it’s time to revisit the rules and consider scrapping supply management altogether, as Australia and New Zealand have done.
Bernier has dubbed Canada’s dairy management system a “cartel” and has vowed to abolish it if elected. Blaney says it’s important to preserve the system to protect consumers from the possibility of a new dairy tax.
“President Trump is right,” Bernier told CTV’s Power Play in a heated debate on Wednesday. “It is an unfair system for the dairy producers in Wisconsin and all the other dairy producers in the U.S., and it is also unfair for the dairy producers in Canada because, as you know, they cannot export their products in other countries.”
So far, Bernier is the only Conservative candidate to commit to dismantling the supply management system.
“I want Canadians to be able to choose, to be able to buy their milk, their poultry and their eggs from every country if they want, and they don’t have the freedom of choice right now.”
On the flip side, Blaney called Trump wrong and said Bernier would “cave” to the U.S. and “abandon one of the strongest agricultural sectors of Canada.”
“What’s next? The automobile? What about softwood lumber?” Blaney said.
Blaney suggested that a new dairy system would require a new tax. In Australia, a new tax was introduced after it abolished its own supply management system.
“Australia is a disaster. Their imports of milk have increased, the number of farms has decreased, and the consumer has seen no benefits,” Blaney said.
“This is a disaster for consumers. This is a disaster for farmers, because their price would go down.”
Bernier lashed back at Blaney, accusing him of having other priorities.
“I’m a conservative who believes in free markets and freedom and we must have a real free market. We don’t have that. And Steven Blaney is working with special interest (groups),” Bernier said.
Bernier said that by starting a conversation with Trump on dairy, he could barter a better deal on softwood lumber.
Canada’s ambassador to the U.S. has also chimed in on the debate, suggesting that Trump is wrong to blame Canada for Wisconsin’s dairy woes.
"The facts do not bear this out," David MacNaughton said in a letter, released Tuesday, to the governors of Wisconsin and New York.
"Canada does not accept the contention that Canada's dairy policies are the cause of financial loss for dairy farmers in the United States."
Current system ‘hurts poor, rewards wealthy’
As it stands, the current supply management system gives immense control to a small group of wealthy farmers, according to Martha Hall Findlay, president of the Canada West Foundation, who has studied the system.
“This is a system that hurts the poor and rewards the wealthy,” Hall Findlay said. “We now only have 11,000 dairy farmers. We used to have 145,000. The average dairy farmer is a millionaire.”
Despite what Blaney suggests, Hall Findlay said supply management does not protect consumers. On the contrary, it gives them little choice.
“You have … a young mother with three little kids on welfare, and she is forced by our system to pay two and three times more for basic, essential nutrition for her kids. And that money is going to what is now a small number of millionaires. It makes no sense.”
Hall Findlay says that Bernier is the only candidate being “intellectually honest” on the topic, and that Canadians should take Trump’s recent words to heart.
“Donald Trump has given us a huge opportunity to do something that is win-win. We can actually make a change to a system which started 50 years ago, it is become completely distorted now,” she said.
