Jay Goldberg is an Ontario-based columnist. He is also the Canadian Affairs Manager at the Consumer Choice CenterCanada likes to portray itself as a nation of free trade. But there’s at least one major relic of the past holding Canada back: our system of supply management.It’s also a major irritant in Canada’s now-rocky trading relationship with the United States.Here’s the present situation Canada faces: President Donald Trump’s tariff agenda is threatening to spiral our economy into a deep recession.In response, Canada should be doing two things: diversifying our economy and removing the major irritants to our trading relationship with our neighbours to the south.One of the major irritants Trump has repeatedly cited in targeting Canada is our system of supply management.Through a complicated web of regulations, Canada restricts the supply of agricultural products, both in terms of what is produced domestically and also in terms of what is imported from abroad. This system is what’s known as supply management.Supply management artificially increases the price of milk, eggs, and poultry. And it stops the vast majority of U.S. farmers from being able to export those farm products into Canada.The end result is higher prices for consumers and an angry trading partner south of the border.Prior to the pandemic, supply management and the inflated prices it produces was costing the average Canadian household between $300 and $444 a year.Since then, food inflation has hit consumers hard, suggesting the cost of supply management for the average Canadian household could be much higher.Canadian consumers can ill afford those price hikes at a time when 50 per cent of families say they’re $200 away from not being able to pay their bills.Looking at how supply management impacts U.S. farmers, Canada’s system of supply management imposes tariffs between 150 per cent and 300 per cent on chicken, turkey, eggs, and dairy products.For context, that’s between five and 10 times as much as the tariffs the Trump administration imposed on Canada last week.The federal government has repeatedly refused to put supply management on the table when it comes to addressing trade concerns coming from the Trump administration.But for the sake of our trading relationship and to lower costs for Canadian consumers, that’s precisely what Ottawa should be doing.Canada’s system of supply management has been in place since the early 1970s and has been artificially raising prices for consumers ever since. It tells farmers how much they can produce through quotas and imposes tariffs on imported goods over a specific threshold.The end result is limited production and very minimal imports.This leads to higher prices for Canadian consumers: for example, milk in Canada is 20 per cent more expensive than milk in the United States.Getting rid of supply management would mean lower prices and more choice for consumers. And it would remove one of the biggest irritants in our trading relationship with the United States.Ending supply management could also have an upside for the Canadian farmers protected by that very system today.Because of Canada’s system of restrictions and quotas, few eggs, and very little dairy or poultry, are sold abroad.If Canadian farmers were forced to compete with farmers from countries like the United States within the Canadian market, their products would also become attractive to consumers in countries around the world.New Zealand’s experience is illustrative. New Zealand ended its own system of supply management about 35 years ago. Since then, its farming exports have gone through the roof.For example, the total value of New Zealand milk exports increased from $2 billion at the end of the supply management era to nearly $20 billion today, a tenfold increase.In the long run, ending supply management could be a boon for Canadian farmers. And experts estimate it would save Canadian consumers $6.7 billion a year at the grocery store.Canadians couldn’t afford our antiquated system of supply management before. And, with the Trump administration’s tariff agenda in full swing, we certainly can’t afford it now.It’s high time for the feds to finally end Canada’s system of supply management.Jay Goldberg is an Ontario-based columnist. He is also the Canadian Affairs Manager at the Consumer Choice Center.
