No counterpoints yet. But seeing as it appears that Canadians are broadly supportive of supply management for dairy, perhaps they could let us know how much of our economy(or how many good jobs they are willing to sacrifice for it(and if that would include their own career).
https://www.msn.com/en-ca/money/topstor ... r-AA1Jnagl
Keeping supply management is economic suicide
We are approaching the end game of the current round of negotiations between Canada and the U.S. on a new comprehensive trade deal.
The outcome of the talks is still very much uncertain. While it appeared early on as if progress was being made, President Donald Trump has made no secret of the fact that several major obstacles remain. Favourite targets of his have been our banking rules and regulations and our protectionist digital and cultural sectors (in addition to non-trade irritants like our border policies).
But at the very top of the list is Canada’s policy of supply management. This was a serious irritant in the re-negotiated NAFTA treaty in 2017-18 during Trump’s first term (which resulted in Canada making relatively small concessions), and it has re-emerged as perhaps the greatest stumbling bloc to a new deal. President Trump has railed against it numerous times, and he has repeatedly stated that he views it as fundamentally unfair to American farmers.
There is no need in this article to review Canada’s commitment to this program. Suffice to say all of the major political parties remain strongly supportive of it, and thus regardless of which party is in power allegiance to supply management seems to unite them (not to mention that a parliamentary bill passed last month aims to ensure that no concessions are even possible in trade talks).
But the question that is now emerging is just how far is Canada willing to go to protect the program? Or, to put it another way, would the Canadian government be willing to scupper the talks and a potential deal because it remains fully committed to it?
On the surface, the question is absurd. Supply management primarily benefits approximately 10,000 dairy farmers (down from 150,000 when the program began) most of which are in Quebec and Ontario. These farmers earn relatively high incomes and enjoy price guarantees that no other Canadian farmers receive. But the program results in higher food costs for 40 million Canadians.
As for the question of how much Canadians pay as a result of supply management, studies have shown that the average Canadian family spends up to $600 more per year because of it, and they have less choice at the grocery store. These extra costs are borne most heavily by lower income citizens, who pay a higher proportion of their income on groceries.
Given this, you might think that supply management is unpopular with Canadians. You would be mistaken. Polling has consistently showed that the program is broadly popular. One 2023 poll showed that over 90 per cent of respondents believed that it was important that dairy products come from domestic producers.
Thus a question worth considering is what accounts for this support. No doubt part of the explanation is the power of several key domestic interest groups. Both the Dairy Famers of Canada and the Egg Farmers of Canada spend heavily on ads promoting it, and they have succeeded in persuading many Canadians that supply management results in safer products and more consistent supply.
In addition, supply management has strong support from most of Canada’s media. The Toronto Star and the CBC go apoplectic at the mere mention of changes to it, and the generally centrist Globe and Mail is also quite supportive, in spite of its (supposed) commitment to free markets. Only National Post offers consistent criticism.
And lastly, supporters have succeeded in persuading Canadians that the program’s demise would decimate our dairy sector, as they argue that domestic producers could not possibly compete with larger international players.
That last argument is particularly questionable, as there is little reason to doubt that in the absence of state-controlled quotas and prices, Canadian dairy farmers would become more efficient and innovative.
Indeed, a similar argument was made decades ago with regards to wine. For years Canada’s wine market was carefully regulated and foreign wines were heavily tariffed. Canadian producers argued that without such taxes the industry would be destroyed, as it could not possibly compete with French, Italian, and Spanish wines.
In fact, the opposite occurred. With the opening of the market, Canadian producers were suddenly forced to offer a better product, and the result has been an explosion in both the number of domestic producers (now approaching 1,000) and the quality of our wines. Indeed, Canadian wines now routinely win international competitions, something that would have been unthinkable 40 or 50 years ago (when something called Baby Duck seemed to be the best we could do!).
In sum, the Canada-U.S. trade talks have entered their final phase. But a familiar obstacle remains. The Canadian government seems totally committed to supply management, even if this support comes at the cost of killing a potential agreement. Such an outcome would be catastrophic, as Ottawa would literally be committing economic suicide. And yet this result is very much in play, and might be unavoidable if the U.S. decides that there will be no agreement unless Canada agrees to make dramatic changes to the program.
