OP-ED: Why Ottawa can’t keep dairy “off the table”
Dr. Sylvain Charlebois writes, "For decades, Canada’s supply management system has acted as both shield and stabilizer for the country’s dairy sector."
Author: Dr. Sylvain Charlebois
For decades, Canada’s supply management system has acted as both shield and stabilizer for the country’s dairy sector. By regulating production, fixing quotas, and limiting imports through tariff rate quotas (TRQs), the model has provided farmers with stable incomes, preserved rural communities, and sustained a form of food sovereignty. But as the Globe and Mail recently reported, Ottawa is now considering regulatory changes that could allow more U.S. dairy products onto Canadian shelves — a signal that the system is under growing strain.
The timing is strategic. With the 2026 review of the United States–Mexico–Canada Agreement (USMCA) looming, the federal government is looking for ways to ease one of Washington’s most persistent irritants: access to Canada’s dairy market. Yet the conversation cannot simply be reduced to placating the United States. It raises a deeper, more uncomfortable truth: Canada’s dairy sector, and the supply management model that underpins it, cannot remain frozen in time.
Officially, the federal government insists that supply management is sacrosanct. In 2023, Parliament even passed legislation meant to prevent future governments from negotiating away additional access to supply-managed goods. In practice, however, this law is largely symbolic. Ottawa can change how existing TRQs are allocated without ever reopening USMCA. Shifting licences from processors to retailers such as Loblaws, Costco, and Metro would effectively open the border wider to U.S. dairy products — a change that Washington has been demanding for years.
This is not a technical footnote. It is a rebalancing of who controls what comes into the Canadian market. Giving retailers direct access would allow American milk and cheese to bypass Canada’s processors, disrupting the delicate structure of a sector built around limited, highly managed supply.
The political narrative has been one of steadfast defence. Back in 2009, Dominic LeBlanc promised Parliament that “the security and future of supply management will be protected.” In 2016, he reiterated that “unlike others who would like to abolish it, we support our Canadian supply management.” Yet only four years later, USMCA carved out greater access for U.S. exporters, proving that supply management had been compromised despite assurances to the contrary.
Today, Ottawa repeats the mantra that the system “will never be on the table.” But the reality is that it already has been — not only under the Liberals, but under the Conservatives before them. The inconsistency is less about party politics than it is about the system itself: a rigid structure struggling to withstand global trade pressures.
Advocates of change highlight the consumer benefits: lower prices and greater product variety at a time when food inflation continues to erode household budgets. That narrative resonates with the public and provides cover for policymakers.
But the economic costs are long-term. Supply management has insulated farmers and processors for decades, but it has also limited innovation, discouraged efficiency gains, and placed Canada at odds with trading partners. Billions in compensation packages may soften the blow of concessions, but subsidies are no replacement for competitiveness. They do not modernize value chains or help Canada adapt to a globalized food economy.
What Ottawa faces is not simply another round of concessions to Washington. It is a reckoning with whether the supply management model remains viable in its current form. The U.S. president — whether Donald Trump or anyone else — will continue pressing for access, because the system itself runs counter to the spirit of liberalized trade. Pretending otherwise only delays the inevitable.
The question, then, is not whether consumers will enjoy slightly lower prices in the short term, but whether Canada is prepared to chart a path that balances farmer stability with long-term competitiveness. This is no longer just about protecting a legacy system. It is about deciding whether Canada wants to adapt its agricultural model to the realities of global trade — or risk seeing it eroded piece by piece, deal after deal.
Sylvain Charlebois is director of the Agri-Food Analytics Lab at Dalhousie University, co-host of The Food Professor Podcast and visiting scholar at McGill University.
Everyone always talks about "the farmers" and how they benefit from Supply Management. This brings to mind Farmer Clarence and his wife and kids running an idyllic little red barn operation in the Laurentians. In reality SM benefits a few hundred wealthy multimillion dollar corporations who, no doubt, contribute generously to political campaigns. They are about as "Mom and Pop" and Carnochio's Blind Trust Manager.
Too many Canadian politicians, Liberals and Conservative both, have sacrificed Canada’s economy to subsidize corporate farms both through higher prices and missed trade opportunities. To them, dairy farms are more important than the auto and steel industries. It’s time to put an end to the national self harm of supply management.