ADL gets federal funds for upgrades on same day U.S. president slams dairy supply management
P.E.I. dairy processor's $24-million upgrade will make it more competitive, says CEO
The federal government is backing upgrades at P.E.I.'s largest dairy processor at a time when the Canadian industry's supply management system is under pressure from the Trump administration in the U.S.
Ottawa is kicking in money for half of a $24-million project to add more automation and efficiency equipment at Summerside-based Amalgamated Dairies Limited.
President Donald Trump's commerce secretary, Howard Lutnick, has said he wants to see more U.S. dairy exported to Canada, saying this country treats American dairy farmers "horribly" by restricting such cross-border sales. Trump himself doubled down on that rhetoric Friday afternoon, threatening reciprocal tariffs and saying: "We may do it as early as today."
Chad Mann, ADL's CEO, said the company's upgrade has been in the works for over two years, and has nothing to do with what's being said south of the border. Even so, he said ADL is ready for an uncertain future.
"No matter what happens in this very uncertain environment… we have to expect change is coming," Mann said.
"We have to be more competitive, we have to be more productive, and this project is allowing us to do that."
For decades, the Canadian dairy industry has been regulated by a supply management system, a national framework that controls the supply of dairy, poultry and eggs through production, import and pricing measures meant to create stability.
The system ensures there isn't an oversupply of products, which keeps prices to consumers stable.
Over the years, the U.S. has taken issue with the supply management system, so the latest musings from the Trump administration are nothing new.
But with a president who's launched a trade war in the last two months and has expressed a desire to annex Canada, it's difficult to see the threats against the dairy industry as idle ones.
Mann sees it differently, saying he doesn't "put a lot of stock in that rhetoric...
"If someone tells me at some point in time that our dairy producers here in P.E.I. or in Canada all of a sudden don't have access to our own domestic marketplace… that would be problematic," he said.
"Let's face it, the rhetoric coming out of the U.S. has got nothing to do with dairy. It's a distraction, it's a talking point, it's a sound bite."
'Supply management is sacred'
Bobby Morrissey, the Liberal MP for P.E.I.'s Egmont riding, agreed that the timing of the federal funding announcement for ADL was coincidental with the talk coming from the Trump administration.
He said, however, that it does show the need to support Canada's dairy industry.
"The world is changing, so that makes it even more important to work with a company like ADL to ensure it has a competitive footprint," Morrissey said.
"Supply management in Canada has served this country and it has served the primary producers very well. Our government is very committed to protecting supply management."
Michael MacDonald, a dairy farmer in Souris and the president of ADL's board, said the industry has been dealing with pressure from U.S. governments for 30 years because Canada's supply management system is the "envy" of the world.
He said the system ensures a consistent product on store shelves and keeps milk and cheese prices from wild fluctuations — and a disruption to that would hurt producers and customers alike.
"You'd see a huge reduction in the success of our operations, and the viability. Do we really want to see milk coming from 10,000-cow dairies in California or from Michigan? We want to know that our product is safe and healthy and produced locally," MacDonald said.
"[It's] good to know that supply management is sacred to our government that we have at the current time, and that they're willing to invest in the success of the Canadian dairy industry."
ABOUT THE AUTHOR
With files from Steve Bruce