N.L. dairy rep says Canada will protect industry in face of U.S. target
U.S president’s commerce pick has painted a target on Canadian dairy
For decades, the Canadian dairy industry has been regulated by a supply management system, and Newfoundland and Labrador representatives say that won't change — even in the face of U.S. pressure.
The supply management system is a national framework which controls the supply of dairy, as well as poultry and eggs, through production, imports and pricing meant to create stability.
"It does protect our industry. It protects food security for Canadians. It protects our dairy farmers. It is a good system and it is working for Canada," Dairy Farmers of Newfoundland and Labrador general manager Tom Osborne told CBC News.
The system ensures there isn't an oversupply of products, which ensures a stable price and it is vitally important it continues, he said.
"It's a system that works for all parties in Canada, whether you're a consumer, a farmer or the processing industries," said Osborne.
If it is dropped, he said Canada will be more economically vulnerable through imports.
Over the years, the U.S. has taken issue with, and disputed, how Canada manages its dairy industry.
Amid the threat of punishing 25 per cent tariffs on Canadian goods bound for south of the border, president Donald Trump's nominee for commerce secretary, Howard Lutnick, recently said he had set his sights on Canada's dairy industry.
At his confirmation hearing in late January, Lutnick said he wants more U.S. dairy exported to Canada: "Canada ... treats our dairy farmers horribly. That's got to end."
Osborne rejected Lutnick's comment, calling it "not based on facts."
"The trade imbalance is in favour of the United States in terms of dairy product. More than 50 per cent of Canada's dairy imports come from the United States. So they do well by Canada," said Osborne.
He said government needs to protect the supply management system, and said he's optimistic it will carry on.
"We've seen the Canadian government and negotiators in other trade agreements hold that is sacred in this country. And I'm confident that they'll do the same going forward. So I feel good in that respect."
3 pillars
Jodey Nurse, a faculty lecturer at McGill University's Institute of Canada, said government introduced the supply management system in the late 1960s and 1970s due to market instability, when prices were going down as costs were going up, farmers weren't earning enough to cover production costs and farms were collapsing.
She said there are three pillars in the system are production discipline that maintains stability through production quotas, import control and fair farm pricing.
"By ensuring farmers receive pricing that includes the cost of production and a reasonable return, farmers are allowed a fair income so that they can reinvest in their farms and their communities," said Nurse.
As a result, she said Canadian farms tend to be smaller than their U.S. counterparts, who produce a lot of waste when they overproduce milk that then has to be dumped because there is no market and the product can't be stored.
Nurse added that other countries also have measures in place to protect their dairy industry, like the U.S. does through farm subsidies.
"We don't have to have those sorts of direct subsidies in Canada because we have, at least in the supply managed systems, because we can pay farmers fairly," said Nurse.
She pointed out the U.S. is seeing a surge in avian flu that's led to a corresponding surge in egg prices, which is hitting them hard because they have such large farm operations. Canada, with its smaller operations, is better able to weather those problems.
"I think it's important that we have really robust local food systems. And that can take a diversity of form, but the supply management system has worked really well in the industries it serves," said Nurse.
30 day reprieve
Osborne, speaking from Ottawa where he was attending the Dairy Farmers of Canada's annual policy conference Tuesday, said a lot of talk amongst industry representatives was about tariffs.
"The 30-day reprieve has certainly lightened the mood here at the policy conference, but it is still one of the hottest topics," he said. "We are looking at how we can strengthen the Canadian dairy industry from coast to coast to coast."
U.S tariffs were initially expected to come into effect Feb. 4 but Trump granted a 30-day reprieve, and negotiations between the countries are ongoing.
Osborne said the dairy industry has been in discussions with political leaders and he believes they will protect Canadian interests.
"I have confidence that our political leaders will look out for the best interest not only of the dairy industry, but of other industries across Canada," he said.
International Trade Minister Mary Ng recently told CTV's Power Play that Canada would not budge in its support of the supply management system for dairy.
CBC News has asked Ng for comment.
Spokesperson Huzaif Qaisar said the Canada-United States-Mexico Agreement isn't scheduled to be reviewed until 2026, but both Canada and the U.S. have launched consultation processes.
Support local
Osborne said all Canadian consumers should be worried about the threat tariffs pose, but there is a silver lining, he said, pointing to the increased support for Canadian-made products, which he said is good for dairy.
"Our dairy industry in Canada is held to some of the highest standards in the world," he said.
Tom Osborne says U.S. concerns about the dairy market are 'not based on fact':
He said Canadian milk doesn't have artificial growth hormones, for example.
"It is a good product. So start buying more Canadian dairy and less imported dairy would be beneficial to everybody," he said.
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