A victory for the U.S. in its trade challenge against the Canadian dairy industry could actually help expand choices for Canadian consumers..Experts say supply management and handouts are propping up an industry concentrated in Central Canada to the detriment of consumers nationwide..The U.S. alleges Canada hindered its southern neighbour from capitalizing on the small portion of the Canadian dairy market that was conceded in the 2018 USMCA. Instead, Canada allocated most of its import permits to Canadian processors, who tended to import lower-value milk products and used them to make their own high-valued retail products for retail sales. That allegedly kept high-value U.S. retail products off of the shelves..Sylvain Charlebois, Senior Director of the Agri-Food Analytics Lab at Dalhousie University in Halifax, said Canadian consumers lose under the status quo, propping up an inefficient industry through supply management and tax dollars, only to be left with fewer, but more expensive products available..“The system really doesn’t necessarily doesn’t work for consumers, it works for the dairy industry. And so that needs to be fixed, but the knight in shining armor are the Americans, not our own dairy sector. (former President Donald) Trump was the first elected politician outside of Canada to acknowledge that their supply management is a problem for the world.”.Canada has almost 11,000 commercial farms, with 4,732 in Quebec and at least 4,000 in Ontario. The average Canadian dairy herd has 97 cows, but in Quebec farms average 76. In the western United States, where market forces rule, the average farm has 1,057 cows. .In 2019, dairy farmers were pledged $1.75B by Ottaw to compensate for its loss of market share due to trade deals with the Pacific Rim and Europe. The annual marketing budget of Canadian dairy farmers is $130 million and its powerful lobby keeps its interests entrenched..“This is really a tough industry. And they’ll go after any dissonant voices,” Charlebois said..“Just this year, they’ve actually sent out several letters asking Dalhousie to fire me. They’ve actually threatened the university to pull some of their research funding from the agricultural campus.”.Charlebois said he’s not the only agri-food academic to feel the heat..“A lot of people have actually paid a dear price over the years. Some have lost their jobs. They’ve lost their careers. People have been threatened. I’ve been threatened many times. This spring, I had the Halifax Police over my house to report some incidents…[of] emails and phone calls and stuff like that,” he said..At Econ Americas, a financial consultancy, Fergus Hodgson told the Western Standard that supply management is no small matter..“I do think this is an important issue…with a very clear distinction between what Canadian people want and need… and what Ottawa is doing,” Hodgson said. .“Some organizations or lobbies can control the regulations related to their industry to the detriment of the rest of the country…The dairy and know this whole supply management system is just an eyesore that continues on.”.Hodgson wishes Canada embraced free trade for the good of all and did not attempt backhanded protectionism..“Picking a fight with the United States at such a time is just absurd. I don’t know why Canada would even do this. This is such a vulnerable time economically for the country. And we all know that the US is head and shoulders above any other trading partner. So really, getting into a fight over some dairy products is just begging for a retaliation, which would be far more painful to Canada than to the United States,” he said..The U.S. first lodged its trade complaint in December while Trump was still president. In May, the Biden administration used provisions of the USMCA to request a three-member panel to rule on the dispute. The panel’s final report is expected in November..Harding is a Western Standard reporter based in Saskatchewan
