Canada’s supply management system is blocking trade deal with U.S.: expert
A consumer policy expert says Canada’s decades-old supply management regime is a core obstacle to resolving the trade dispute with the U.S.
As U.S. President Donald Trump threatens a 35 per cent tariff on Canadian exports, a consumer policy expert says Canada’s decades-old supply management regime is a core obstacle to resolving the trade dispute with the U.S.
In an interview, David Clement, North American Affairs Manager at the Consumer Choice Center, said Canada’s system of quotas and tariffs on dairy, poultry, and eggs has long been a trade irritant for American administrations, both Republican and Democrat.
“It covers dairy products, so milk, cheese, chicken, eggs, and turkey,” Clement said. “There’s a system of quota licenses to produce, which limits domestic supply, alongside high tariffs on international production.”
Those tariffs can reach up to 280 per cent on chicken, 203 per cent on dairy, and as high as 165 per cent on turkey.
Clement said that while the U.S. has repeatedly raised concerns, including under NAFTA and CUSMA, Trump’s renewed focus on the issue reflects political pressure from key swing states for Republicans, such as Wisconsin, which has a large dairy industry.
The Consumer Choice Center argues that the system inflates consumer prices by 20 to 40 per cent and creates an artificial monopoly that limits Canadians' access to lower-priced products, including international brands.
A pre-pandemic study estimated that inflated dairy prices pushed approximately 189,000 Canadians below the poverty line, a number likely higher today.
Canada’s supply management structure is designed to serve only domestic demand, Clement said, meaning any excess production is discarded.
As a result, Canadian dairy farmers are largely shut out from the global export market, a missed opportunity, especially in growing markets across Asia.
“If we got rid of supply management, our farmers could compete globally, just like New Zealand’s dairy sector, which exports throughout Asia,” he said.
Beyond trade concerns, Clement pointed to supply management as a structural contributor to food inflation, reducing affordability and choice.
“Consumers would benefit from more competition, better variety, and lower prices,” he added.
The system also persists due to what Clement described as “the most powerful political lobby in the country.”
Dairy Farmers of Canada, a national group, is among the top advertisers in Canada and holds key influence in Quebec, where a majority of Canada’s supply-managed farms are located.
“The concentration of dairy farms in Quebec gives the issue outsized political weight. Quebec is always a battleground in federal elections,” he said.
Clement said Prime Minister Mark Carney now faces a major test.
“He campaigned as a leader willing to make tough decisions. Whether he’ll apply that to supply management is an open question.”
Calls to phase out or reform the policy are growing louder as Canada faces increasing pressure to finalize a new trade agreement with the U.S. by August 1 or face sweeping tariffs.
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According to Chat GPT the combined supply-managed sectors of the Canadian economy account for around 1.5% of GDP. So the entire country -- and every other Canadian industry that does business with the US -- must pay for the protectionism of this small sector of the economy. Perhaps Mr. "Elbows Up" should start right here at home and perhaps the leaders of every other Canadian industry affected by the tariffs should take on Mark Carnage for the sake of their businesses and the rest of Canada. As Kenny Rogers said, "You got to know when to hold 'em, know when to fold 'em" and Trump is calling our bluff. It's time to say au revoir to supply management.
The removal of Canada's antiquated and corrupted "Supply Management System(s)" would benefit the vast majority of Canadians and their families.
This is a concept (benefiting Canadians) that is something that the Liberals have shown over and over again they have no grasp of.
While the reality is likely there are far more votes in it for them from regular Canadians the problem is, as is typical in Canada, most remain complacent and silent.
The Supply Cartels on the other hand and in a political sense are highly organized, powerful, loud, annoying and can make or break a Political career and they know it.
They have not acted in the interests of the Canadian consumer for longer now than can be remembered despite their warm, fuzzy (propaganda) rhetoric which sadly and up until recently a lot of Canadians have bought into.
It appears though that the above might be coming to an end.
There was a reason the complicit Bloc with the cooperation of all parties (as explained above) were able to push through the abomination of a bill that protected the (primarily) Quebec and OntArWeOwe cartels.
Once again that reason had nothing to do with respect to protecting Canadian Consumers.
Absolutely nothing.
It was all about protecting selfish, corrupted and regional interests mostly Political in nature.
While I would say that is certainly the Liberal way these days in this case all parties have been complicit in this continued farce.