Canadian governments of all stripes have traditionally supported the communist-style regime used to regulate prices and production of Canada’s dairy, egg and poultry industries and to protect them from foreign competition.
Since mid-2012, however, U.S. trade officials have made it clear that the system has to go if Canada wants to be part of the Trans-Pacific Partnership (TPP), a new free trade zone of twelve countries representing 40 per cent of the world’s economy.
The TPP, which would also include the United States, Japan, Australia, Brunei, Chile, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam, has the potential to be one of Canada’s most lucrative trade deals. Here’s an excerpt from the federal government’s website:
The rapidly-growing Asia-Pacific market is critical to Canada’s growth and economic prosperity.
“The Trans-Pacific Partnership is one of the most ambitious trade and investment initiatives being negotiated in the Asia-Pacific region. TPP members want an ambitious, 21st-century agreement that will enhance trade and investment among the partner countries, promote innovation, economic growth and development, and create jobs.”
It is no secret that Canada’s dairy and poultry farms are artificially supported by an archaic, costly, anti-consumer supply management system. Moreover, these farms—only about six per cent of Canadian farmers—have been singled out from among all of Canada’s food producing farms and other operations to be a regulated cartel that is supported by price fixing practices and by imposing extremely high tariffs to support high prices.
I’ll not go into detail about this egregious system, but I strongly suggest you read former Liberal MP, Martha Hall Findlay’s excellent three-part series on the subject at Maclean’s website if you haven’t already done so. And here’s a link to her research paper published by the School of Public Policy, University of Calgary.
Hall Findlay’s research shows there are little more than 12,000 dairy producers in Canada, fewer than 3,000 poultry farmers and fewer than 1,000 egg farmers. Furthermore, they represent less than one-half of one per cent of Canada’s economy.
Because of supply management, there is a massive transfer of wealth from low and middle income Canadian families to these few farmers whose average net worth ranges from $2.5-million for dairy farms to almost $4-million for poultry/egg farms.
Moreover, Hall Findlay tells us that:
There are only 13 ridings in Canada with more than 300 dairy farms. And to put things into relative electoral perspective, these are ridings which have an average of 80,000 registered voters each. Eight of these are in Quebec, three of which (based on both the 2008 and 2011 elections) are held comfortably by Conservatives. Three are held by the NDP, two by the Bloc Quebecois, but in four of these, the Conservatives did not even come second, so the situation is
not likely to change one way or the other. The other five of this group of 13 are in Ontario, strongly held by Conservatives, each by over 10,000 votes in 2011.”
So there would be limited political fallout should the Tories decide to scrap this artificial system, or so one would think. But the Tories continue to argue in favour of retaining it—against all logic, even if it impedes trade negotiations that might be of benefit to other industries and even though it must stick in the craw of many free-market conservatives in the House.
The Tory stand confounds me and offends my sense of fairness. There must, I tell myself, be some clever strategy behind such a stubborn refusal to give low- and middle-income families a break by phasing out supply management. And perhaps there is.
Consider that in trade negotiations one must give something up to get something in return. By refusing so resolutely to keep our dairy and poultry business more or less closed to foreign competition, we have created an area for countries like the U.S., Australia and New Zealand to target. So are the Tories really holding out on supply management only to have it as a prize they will “reluctantly” give up when forced to do so in return for trade concessions not otherwise available to Canada?
I hope so. Other explanations aren’t very flattering to our Conservative champions of free-enterprise.